27
Oct
Small increases reduces pain? Rubbish
Gee, I’m not sure why I didn’t catch on to this earlier - it could be the brain-washing liquid sloshing around in my mind, but Molly brought up an important point on small increases on hospital fees. That was when the eureka moment unburied itself from the heap of nonsense, and leapt into my mind with the magnitude of a mini-shock.
Remember how the PTC and the PAP government keeps expounding on the merits of small incremental hikes in bus fares to “minimise the impact of eventual fare hikes” and that “it is better than having one big price increase a few years down the road”? Well, the sad truth is, you pay more during these incremental increases than you do if the increase was done at one shot.
Take an example:
2007: Stage 1-4 bus fares: $0.60
2008: Stage 1-4 bus fares: $0.61
2009: Stage 1-4 bus fares: $0.62
2010: Stage 1-4 bus fares: $0.63
Ignoring leap years, assume that somebody makes two trips a day, the total amount forked out by one person for the bus fare would be: 0.60 * 365 * 2 + 0.61 * 365 * 2 + 0.62 * 365 * 2 + 0.63 * 365 * 2 = 438 + 445.30 + 452.60 + 459.90 = 1795.80
Now, if things were different, and the price was increased in chunks - as and when it is really required: (we’ll assume that the price was hiked by 3 cents in 2010 because fuel prices went into stratospheric )
0.60 * 365 * 2 + 0.60 * 365 * 2 + 0.60 * 365 * 2 + 0.63 * 365 * 2 = 438 + 438 + 438 + 459.90 = 1773.90
Total savings for consumers had price hikes been done as and when it is required in this scenario: 1795.80 - 1773.90 = 21.90
Now, the scenario I put out here is unrealistic. Firstly, the “small increases” referred to are in the ballpark of 5 to 10 cents, secondly, it assumes that the cost of maintaining the transportation system can only go up. Passengers stand to save a lot more than the cumulative $21.90 if the PTC only approved fare hikes only when it is needed.
I won’t go into the other areas in this issue, as the point I merely wish to highlight is how the public is being led to believe that small increases are beneficial to them. This is also an important lesson to me: the dangers of mis-information is very real. Having The Straits Times as the main staple diet of local news will lead to a biased grasp on the issue at hand. Thank goodness for the Internet.
on October 28th, 2007 at 10:41 pm
This kind of reminds me of the frog experiment. You know the one - you stick a frog in cold water and gradually heat it up. The tiny increases in temperature fool the frog into thinking that nothing much has changed, so it doesn’t notice anything is wrong until it’s too late, at which point it is dead.
I hope the incremental bus fare increases don’t have the same effect.
(Incidentally, I tried to post a comment a couple of weeks ago, but couldn’t. I hope this time it works!)
on October 29th, 2007 at 7:29 am
Yeah, it is a really sad situation when the very people you elect are less than honest with you. There is a reason why people have a right to protests anywhere other than in Singapore.
Here, they come up with all sorts of excuses to harass you if you even try to wear a t-shirt against some governmental policy.
on November 1st, 2007 at 12:59 am
I don’t like many small needles poking me. It makes me feel frustrated.