A recent post of mine prompts the thought: doesn't the rise of tattooing raise some important economic issues?

What I mean is that we can think of getting a tattoo as an irreversible investment (pdf); removing them is expensive and painful, so in this respect they differ from piercings. And the thing we know about irreversible investments is that the threshold for undertaking them is typically quite high.This is because such investments (sometimes) have an option value - we have the option of exercising them later rather than now - and it often pays to hold onto such options.

This raises the question: why, then, do people want to exercise the option of getting a tattoo, rather than hold onto it?

Two cognitive biases are relevant here. One is the projection bias (pdf) - our tendency to under-estimate the extent to which our tastes will change in future. Just as we will undervalue equity options if we under-estimate future volatility, so we'll undervalue the the option of waiting to get a tattoo if we under-estimate the volatility of our tastes, and thus be more likely to get one now. In this context, a tattoo of one's football team is more rational than one of one's partner - your team is for life but your lover isn't.

The second bias is the present bias - the tendency to underweight the future. The more we discount our future selves - and the possible regret they will feel - the more we're likely to get a tattoo. This has some testable implications:

- People prone to such bias are more likely to have tattoos. Ceteris paribus, we'd expect people with lots of credit card debt (pdf) to have tattoos, as both are products of present bias.

- We'd expect criminals to be especially likely to be tattooed, to the extent that committing crime betokens a lack of present bias, a failure to see that one's future self could end up inside.

- We're more likely to get tattoos if we feel sad, because sadness increases the extent of present bias. Getting inked after splitting up from one's partner should thus be common.

How does all this fit with the fact that the prevalence of tattoos has boomed in recent years? It could be that they are a product of a more egocentric culture - an artefact of neoliberalism? If folk become more egocentric, then we'd expect to see more tattoos to the extent that tattooing priveleges the present self over the future one. It could be, then, that the spread of tattooing is like household debt, "culture wars" over religion or the popularity of radio phone-ins. All are products of the age of ego.

Another thing: I suspect peer effects also matter here; folk get tattooed if their peers are. This might be why footballers - a group susceptible to peer pressure - are tattooed more than, say, individual sportsmen are.