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Thursday, September 30, 2010

Why AARP is Still Going Strong

I recently discovered that my father 0f all people, was a member of AARP. It never occured to me that my father had reached the age where joing such groups was a possibility. In my class, Power and Prosperity, we have been discussing the logic of collective action. The author, Mancur Olson, prescribes a theory dealing with collective action. He believes that people join groups for two reasons. First, people in some way or another gain something in the form of selective incentives. Selective incentives being some benefit that is only obtained through active membership within the group. Second, people join groups through force. I have always assumed that my father, a retired Naval Commander, had no such need for any kind of "senior" group, due to the fact that he has full retirement pay and medical coverage until he passes away. After I discovered that my father was a member of AARP, I had to ask as to why he joined. He told me that he joined for two main reasons: AARP offers great deals on hotels and travel accomodations, and AARP also supplies valuable information pertaining to political decisions regarding social security and health care. I then went to the actual website of AARP and discovered several interesting facts regarding obtaining a membership. First, AARP requires that you pay 16.00 a year to retain membership with the affiliation. AARP also excludes people based on age. In order to join the group one must have reached the age of 50. I found it particularily interesting that besides the benefits mentioned above, AARP also provides roadside assistance, food coupons, discounts on prescriptions, glasses and contacts, some dental care, and financial planning advice. AARP also lobbies in government for the preservation of social security and healthcare. It seems most apparent that AARP membership and the benefits it brings certainly qualify as club goods in the sense that they are exclusive, due to age restrictions and membership fees, as well the their ability to provide non-rival benefits. Although it seems there is no use of force, it appears there are several instances of selective incentives offered to those seeking membership within AARP. AARP was founded in 1958, and it will be interesting to see how much longer its ability to retain and expand membership continues through the next few years, especially as the new healthcare plan rolls out this next year.

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