From the Rt Hon Balneus comes an interesting proposition to reduce teenage pregnancies: simply offer a cash incentive for not getting pregnant.

This came about from a post about population reduction being the answer to reducing carbon emissions. As i noted in my previous post population growth, especially in developing countries, is putting severe pressure on all resources.

China has been on to this well in advance with its one child per couple policy.  For developed countries teenage pregnancies have been a bit of a problem and something that has not been adequately addressed. This idea fits in neatly with the premise of the “Logic of Life” by Tim Harford.

Tim notes that people make complicated  calculations about potential trade offs every day whether its to have unprotected sex or park illegally. He argues cogently that we do respond to incentives and change behaviour when the pay offs look in our favour.

For example he notes research which showed juvenile crime lower or falling in US states where the age for adult criminality was lower than in states where it was higher. The reason was simple: the payoffs were worse for juvenile criminals in states where they would be tried in the adult system. Juveniles were simply responding to the market.

So for teenage pregnancies it is a similar story. Where welfare benefits are good for both mother and baby, there is no disincentive to get pregnant. So the payoffs for riskier behaviour are ok. That’s because as a society we value the rights of the baby and choose to provide for it regardless of how it arrived.

Now imagine we said to all teenage girls that for every year until a certain age (whether 18 or 21) they would receive $200 in a savings account for not getting pregnant. That would be an interesting idea to model.

Now I am sure there are many pros and cons to this but I like the idea of policymaking taking into account how people behave rather than what officials deem to be a good or right thing to do.

I’ve mentioned Agflation previously and we’re starting to see more concern expressed at the official level. The UK Government’s Chief Scientific Adviser, Professor John Beddington, has weighed into the debate calling food shortages a problem that was as immediate as climate change. The driver of agflation is two fold: increased demand driven by population growth and increasing development and supply shortages caused by deforestation to grow biofuels.

These two drivers are causing major price rises in all food groups. This creates what might be called “real” inflation, a price rise in the cost of real goods as opposed to asset inflation which is more of a monetary phenomenon.

This is a real problem because it can’t be solved by the hammer of monetary policy though the myopists in their central bank ivory towers seem to think so.

I can imagine their conversation: “let’s raise interest rates so people eat less”.

In many countries people are exhorted to have more children especially in developed economies where birth rates among the middle classes have fallen. So how can we stop the population expanding and how are we going to feed all these people and do it in a manner than the ecosystem can cope with.

It’s a tricky question. One could argue that food shortages, famine, disease and natural disasters regulate populations. That may still be the case. But can we rely on that and should we given we are more enlightened, well supposedly.

Population growth was for a long time a favourite topic for policymakers but has only recently come back onto the mainstream agenda. There is no doubt that the growth in biofuels has played a major part in this and that governments who have set targets for biofuel supply may well need to go back and think more carefully about how the unintended consequences of this feel good policy will play out.