Lifts are a public good
Heng-Cheong Leong of SingaporeSurf takes issue with the Lift Upgrading Programme. Under the programme, residents of buildings with limited lift service vote whether to upgrade to lifts that stop at every floor. If 75% of residents vote for upgrading, construction moves forward, with a portion of the upgrading costs to be split among the residents. So far 1,032 blocks out of 1,063 that have been polled have voted to upgrade.
A lift is an example of what economists call a public good. A public good is a good that is nonrival and nonexclusive. Nonrival means that consumption by one person does not affect consumption by another. Nonexclusive means that the good is accessible to everyone. Textbook examples of public goods are television broadcasts and national defense.
The best way to finance a public good is for each person to contribute his or her personal valuation of the good. This scheme is difficult to implement because, by human nature, there is an incentive to lie and to shirk fiscal responsibility. Since a lift is nonrival and nonexclusive, everyone can enjoy the lift once it is upgraded, even those that don’t contribute to the cost of upgrading. Under Heng-Cheong's scheme, it will likely be the case that people who will benefit most from an upgrade, such as the elderly and families with children, will vote yes while those that will benefit least, such as young childless couples, will vote no. Those that vote no will hope to be free riders, benefiting from knowing that others with a greater need for an upgrade will vote yes.
Instead of spreading the cost of an upgrade among all residents as under the current scheme or alternatively onto the rich as desired, the cost would be borne only by those that need it the most even though all residents would be benefactors. It is also possible that under the proposed scheme no upgrade is undertaken even though residents are willing to pay for one.
Lift Upgrading: Where We Steal Money From Everybody To Build Something I LikeI won’t address Heng-Cheong’s opinion that the rich folks are imposing costs onto the poor folks. Instead I will comment on what the outcome of the proposed scheme would be.
by Heng-Cheong Leong
There is one aspect of the Lift Upgrading (and the estate upgrading) plan that really bothers me, and that is you don't need 100% agreement in order to go ahead with the upgrading plans.
And even though these upgrading are subsidized (with people's money, of couse), the upgrading is still not cheap.
In order to counter pro-upgrading proposals like Fok Kah Hon writing in Straits Times, urging a change of policy by not counting votes by people who don't vote, I propose thus:
That the cost of upgrading, after deducing the subsidies, should be borne entirely by people who voted yes. Those who voted no should not need to pay, althought they will still be in terrible living quarters for quite a few months or even years.
We should not simply have the rich folks imposing additional burdens to the poorer folks, in the name of a better living environment. Just because one has some additional monies sitting around in the CPF accounts doing nothing shouldn't entitle anyone to force other people to pay money for "common good" that the poor can do without.
Sometimes, when you are poor, all these "essentials" are simply just luxuries.
A lift is an example of what economists call a public good. A public good is a good that is nonrival and nonexclusive. Nonrival means that consumption by one person does not affect consumption by another. Nonexclusive means that the good is accessible to everyone. Textbook examples of public goods are television broadcasts and national defense.
The best way to finance a public good is for each person to contribute his or her personal valuation of the good. This scheme is difficult to implement because, by human nature, there is an incentive to lie and to shirk fiscal responsibility. Since a lift is nonrival and nonexclusive, everyone can enjoy the lift once it is upgraded, even those that don’t contribute to the cost of upgrading. Under Heng-Cheong's scheme, it will likely be the case that people who will benefit most from an upgrade, such as the elderly and families with children, will vote yes while those that will benefit least, such as young childless couples, will vote no. Those that vote no will hope to be free riders, benefiting from knowing that others with a greater need for an upgrade will vote yes.
Instead of spreading the cost of an upgrade among all residents as under the current scheme or alternatively onto the rich as desired, the cost would be borne only by those that need it the most even though all residents would be benefactors. It is also possible that under the proposed scheme no upgrade is undertaken even though residents are willing to pay for one.
posted by a singapore economist at 11:34 AM
3 Comments:
I think it is great that people are able of upgrading lifts by voting for them. I think it is why it is called public goods.
Lift Upgrading Programme (LUP) (Chinese: 电梯翻新) is a Singapore Housing and Development Board (HDB) project which upgrades and improves the facilities of the lifts at HDB flats which became an issue in the 2006 general election. This project is for housing blocks built before the year 1990, which were built with lifts that only serve some floors to meet privacy demands and to cut costs. A poll with a 75% majority (calculated among citizen households) in favor is needed for the upgrading to begin. The non-citizen residents who stay in the same HDB block have no polling rights.
The upgrading of public housing, including the Lift Upgrading Programme (LUP), was a major issue in the recent general elections. The People's Action Party (PAP) had tied the scheduling of housing upgrades to the number of votes the party received in the election. The PAP argues that government is successful in raising the standard of living in the country, and those who support its various policies, including the upgrading, should be given priority. In the hotly contested Aljunied GRC, George Yeo (PAP) has placed lift upgrading the "top of [his] priority list" so that the lift would stop on every floor in as many blocks as possible. Sylvia Lim of the Workers' Party (WP) accused the PAP of being selective in its upgrading programmes, arguing that this is a divisive policy.
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