February 23, 2017

430 words 3 mins read

How ObamaCare Benefits from the Scarcity Heuristic

The Concorde was a supersonic passenger plane. It shuttled people between New York and Paris very quickly.

When commercial Concorde flights began in 1976, the novelty and excitement of flying at twice the speed of sound led people to line up to take the flights. But after 27 years and several safety mishaps, the Concorde’s popularity waned. Flights were often less than half full, so British Airways, the operator, was losing money. Bigly.

In 2002, the company that operated the service announced the Concorde’s last flight would be in 2003.

Every flight sold out immediately. The impending death of the Concorde made the flight more popular than ever. Why?

There’s no rational explanation for this surge in popularity. If you didn’t need to get to Paris in an hour before the announcement, you didn’t need to after the announcement.

So why did the failing jet service become popular?

It’s called the scarcity heuristic. People value things that are rare, hard to get, or about to expire. My persuasion hero, Robert Cialdini, names scarcity as one of just six principles of persuasion. According to Behavioral Economics:

When an object or resource is less readily available (e.g, due to limited quantity or time), we tend to perceive it as more valuable (Cialdini, 2008). Scarcity appeals are often used in marketing to induce purchases. An experiment (Lee & Seidle, 2012) that used wristwatch advertisements as stimuli exposed participants to one of two different product descriptions “Exclusive limited edition. Hurry, limited stocks” or “New edition. Many items in stock”. They then had to indicate how much they would be willing to pay for the product. The average consumer was willing to pay an additional 50% if the watch was advertised as scarce.

We’re seeing the scarcity heuristic benefit Obamacare’s popularity right now. Fox News reports that support for Obamacare is surging just as Republicans prepare to kill it:

According to a Politico/Morning Consult poll, there is an even split betweenregistered voters who support the law and those who oppose it. Currently, 45 percent approve of the legislation compared to a poll back in January—before President Trump took office—that showed 41 percent of voters approved of the bill.

This surge in popularity frightens a lot of our weak Republican members of Congress. It shouldn’t.

The only reason for the surge is scarcity. Were President Trump and Paul Ryan to announce that they’re leaving Obamacare alone, support for the program would wane because people don’t value what’s abundant.

Urge your lawmakers to ignore the scarcity-driven polls and kill Obamacare because it’s the right thing to do.