Commentary
Economics, at its core, is the study of cause-and-effect relationships—analyzing how scarce resources, which have alternative uses, are allocated. Individuals respond to incentives, costs, and opportunity costs based on the subjective value that each individual places on the choices that person makes. It is these choices that shape the outcomes that we observe in society. Thomas Sowell reminds us: “Incentives are not just monetary—they include prestige, risk, fear, power, and pleasure. People respond to all of them.”
