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Rory Sutherland presented the idea of Charitable Yield Management to attendees of TEDxOxford on 26th September 2011 and the video appeared on the TEDxTalks YouTube channel in January of this year.
For the first part of the video Rory covers some interesting observations by behavioural economists, in particular the way in which our perception of pretty much everything is determined by the overall context. If this kind of thing interests you, I highly recommend viewing Rory Sutherland’s presentation at the European Zeitgeist 2011: Rediscovering a Lost Science.
Chariable Yield Management is a twist on a concept the airline industry has been using for decades. Anyone familiar with the airline industry knows that customers sat in adjacent seats may have paid massively different prices for the privilege. The same process has been introduced, amongst others, to rail travel and hotel accommodation, in recent years. Economists consider this as a form of price discrimination, but that doesn’t mean people are being exploited: the fact is that people with a greater need are prepared to pay a higher price.
Rory goes on to suggest that the same concept can be applied to many other areas, such as use of the hard shoulder when the motorway is busy, faster check-ins at airport security and “desperate” parking bays in addition to those for the disabled. In order to avoid any kind of hatred (i.e. look at that rich git paying to use the hard shoulder) he proposes the extra revenue is donated to charity. How can you hate someone who is helping the needy?
Personally, I think it is a great idea. Enjoy: