Why Is Macro So Hard? Don’t Measure What You Don’t Want Others to Find Out

Here is an example from Berkeley passing a sin tax on sugary sodas. The goal of these is allegedly to combat obesity. If so:

The problem with the way the soda tax is implemented, however, is that the city treats the policy as a settled issue rather than an experiment. It does not account for the possibility that the policy may fail. In fact the city’s decision-makers do not even bother to outline what they would consider a success for the soda tax in terms of reduced obesity. They have not announced any plans to track the tax’s impact on obesity rates. Thus, even if the policy fails to reduce obesity, the tax will likely continue.

Maybe the purpose of the tax isn’t really to combat obesity at all. Maybe it’s just to raise money. Cold Spring Shops (linking to this article, with more here and here) quotes that those two probably don’t go together

As with all sin taxes, there's a contradiction at the heart of California's proposed soda tax: the policy is supposed to both dissuade soda purchases and raise significant revenue from taxing them. To succeed on one metric is to fail on the other.

The reasoning is nothing if not obvious:

• If the tax is going to reduce obesity by discouraging people from buying sugary drinks, then their demand must be elastic. So little tax revenue will be collected.
• If the tax is going to raise revenue, it must do so because people will buy the sugary drinks in spite of the tax, because their demand is inelastic. So obesity won’t change much.

Ya’ can’t be elastic and inelastic at the same time.

Thing is, if they knew this, it would make sense to discourage collection of data.

It all makes sense now …