Sunday, 11 April 2010

Behavioural politics, day 5 of 30

The "marriage tax" is the dominant discussion of Saturday, and illustrates an important point. The influence of an issue does not depend on its financial value.

There's a relatively tiny amount of money at stake - £150 a year for about 3 million people - but the Tories intend it to send a clear signal that they are the party which supports marriage.

The price elasticity of marriage is very low (though not zero) - there has been some actual research on this, though I think the paper reveals more about people's aversion to blood tests than it does about money. In any case, it seems unlikely that many people will actually get married (or stay married) because of this. But the Conservatives would like to be associated with the moral position that people should be married.

This is a common tactic in the commercial world. Remember in the 1980s when you used to get free glasses for buying petrol? The value of the glasses was probably no more than 1% of the price of the petrol - but in the mind of the consumer, it takes on a significance out of line with its value. The mind is bad at making different goods commensurable, so it tends to assume that getting two goods is nearly twice as good as getting one.

Similarly, getting two benefits (a tax cut for being married and a lower national insurance rate) for only one cost (a reduction in public spending) seems like a net positive. It is very hard to work out the real net effect on your personal situation.

This implies that parties should salami-slice their announcements, presenting them as multiple separate benefits instead of one complete package.

The two main parties have grasped this, with the Conservatives setting each day's agenda fairly successfully with their announcements so far and Labour publicising a new policy today on regulating takeovers of public companies. The Lib Dems seem to be focusing their fire on the Tories - which has as much chance of helping Labour as the Lib Dems themselves.

Once again, Labour - and lots of other people from outside party politics - have fought the Tories' issue head on, asking why married people - and married people with one income, at that - should be subsidised at the expense of everyone else. It's not clear how this will play out. The Tories are favoured because the issue has much more salience for its beneficiaries than for everyone else. There is symbolism on both sides: the Tories exploiting the positive image of marriage, and Labour and the Lib Dems painting the Tories as old-fashioned and wedded (no pun intended) to a reactionary view of the world.

On balance, today probably favours the Tories a little - but it's close.

Ratings: Conservatives 8/10, Labour 7/10, Lib Dems 5/10.

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