Revealing preferences

Economics (real economists can stop reading here) offers many useful insights and one of them comes from revealed preferences --put quite simply instead of theorising about how much you would be prepared to pay for something, it shows how much you are actually prepared to pay for something.  I have been thinking quite a lot about this recently as I have become a major consumer of the local service economy -- and it seems to me that is revealing quite an interesting hierarchy of charges.I was quite taken aback for instance (and this may seem off) with how little my consultant charged for his part in cutting me to bits.. a clear hierarchy -- he charged £ 1750 (and the anaesthetist charged £ 690) for a couple of hours work plus visits every morning to discuss my progress and how India were getting on vs Australia.  That may seem quite a lot, but it was a very small proportion of the overall package given the costs of the hotel/ hospital.  If he had lifted his fee by 50% I wouldn't have batted an eyelid (though whether Visa would have increased my credit limit enough to pay is another thing).

The second person who seems to me not to know her own value is Mary. I have only just discovered Mary but she is what you might call a treasure.  She will mend, shorten, remake anything.  Since I discovered her she has rescued a moth-eaten cashmere sweater, taken three sizes out of a jacket and shortened two pairs of trousers (though they may have to be taken back to be lengthened since my left leg has grown by an inch and a half) -- and all with change from £ 40.  And add to the list Sue the chiropodist - I had never visited one of these before but she seems to have done wonders for my feet in half an hour for half the price of getting my hair cut at a relatively cheap place (and a tenth of what I have been known to pay -guilty secrets).

This may all seem a rather odd and inconsequential ramble. But it puts the NAO report on GPs into an interesting light.  If, rather than have their contract determined by government, and provide services to punters free at the point of delivery, what would they or could they charge and what would people be prepared to pay.  I am not the right person to ask - I would pay very good money to keep out of their clutches (and indeed do which is why I always get travel injections from Trailfinders).  But not clear that if you had asked the patients they could have doubled their charges over the past few years while radically cutting back the offer to their customers.  Since GPs pride themselves on being private contractors -- and the government's mistake in negotiating the GP contract seems have been to underestimate just how much they would react to incentives - it would be quite interesting to expose them to a world of revealing preferences.