A little behavioural economics this morning

From the economist.

Messrs O'Donoghue and Rabin, on the other hand, suggest sin licences. Rather than charge a duty of $2 a packet, governments could make the sale of cigarettes illegal to anyone who did not buy a smokers'ID, which might cost $5,000 and entitle the holder to 2,500 packets of cigarettes tax-free. People would no longer be able to slide into a smoking habit one packet at a time. It would be clear from the outset that they were entering a lifelong marriage to nicotine.

If such a high price is too crude a deterrent, the sin licences could instead carry customised restrictions, argue Mr Beshears and his colleagues. The licences would be sold for a nominal fee, but holders could specify in advance how many cigarettes they were allowed to buy, and at what times. Those restrictions could be loosened, but any tinkering would come into effect only after a lag, of say three days. The licences would be only a minor inconvenience to people who plan to smoke a lot. But they would be of great help to people who plan not to smoke, but find themselves with a cigarette at their lips in spite of their pledges to give up.