Google Ad

Eurosceptic Bloggers

Thursday, October 07, 2004

The Purpose of Prices

I'm sure you have all read about the directive concerning discrimination in the insurance market, and how risk analysis is no longer allowed where political correctness can be used otherwise.

The Council for Employment and Social Policy on Monday (4 october) delayed a decision on a directive, which would force insurance companies to treat men and women equally.The Netherlands had reached a compromise deal with the insurers,

according to which member states would be allowed to differentiate between genders in national laws if backed up by scientific data.

I have a brief point for the wise guy that thought of this compromise. The fact that the market price for men and women is different constitutes scientific data. The market price for insurance is a direct indicator of the risk associated with various groups of people. As Hayek said, the purpose of prices is to transfer information. This information is being transferred, what other data do you need.

No comments: