We could see it as the attitude that children or adolescents take because they know that their parents are behind it.
Another context in which this phenomenon is observed is that of social assistance, and it is present in two ways:
1) the beneficiaries do not allocate the resources of the social programs to what they are supposed to (after the passage of Hurricane Katrina in the US in 2005, the people who fled the Gulf Coast used the government aid money in tattoos , handbags, and even luxury items), and/or
2) the beneficiaries lose positive incentives (it has been documented that, in some cases, where some income is received, if it does not have some measurements or results, interest is lost because the income is guaranteed).
How to Calculate Your Personal Zakat http://t.co/xsi9lvxfKK
— We Love ISLAM Sat Jul 26 11:33:43 +0000 2014
Although economists do not agree on the formal definition of moral hazard, all these examples reveal that its existence is undeniable: there are people who do indeed assume attitudes of moral hazard. However, it should be clarified that this is not all the cases. This is a problem because the existence of the smallest proportion of people who assume an attitude of moral hazard makes us question which ones are really needed.
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OpinionWho is convenient for Mexico's economic underdevelopment?
One of the arguments of those who are against subsidies is that they generate perverse incentives, for example, subsidizing the mortgages of those who cannot pay it, will make those who can pretend that they cannot and thus receive the benefit. Or as we saw in the US, where the unemployment subsidy and the pandemic caused a delay in job growth.
Thus, moral hazard is often used to explain why social security should be less objective, and suggests that the responsibility lies with individuals. Although the truth is that much less has been said about the moral hazard that is generated in employers by offering workers compensation that is too low.
