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EconLife.com connects economics to everyday life, current events and history.

blog: the economic life

Listening to a wonderful Radio Lab (WNYC 10/09/09) podcast on Numbers, I started to think about a comment about what you can learn from a gas pump. $1.40? Maybe a teenager with little to spend. $10.04? Probably a cash payment but the attendant did not turn off the equipment fast enough. $60.00? A person with a credit card and a large gas tank.
Indeed, prices tell a story, provide information, and serve as incentives and disincentives. When prices are set by government, they lose their ability to convey information and affect behavior.
Maybe we can call prices messengers?