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Discusses the findings of Stanford economist Michael J. Boskin, who released a paper suggesting that the federal government had $12 trillion coming that no one had counted. Implications of the finding; Boskin's admission that his equations contained an error; Background on Boskin, who was chairman of the Council of Economic Advisers under U.S. President George Bush; How several economists found flaws in Boskin's forecast of a tax windfall; Boskin's defense of his main point.

In ideal economic models, consumers weigh every purchase against a hypothetical alternative for that money -- the opportunity cost. But a paper forthcoming in The Journal of Consumer Research argues that people generally neglect opportunity cost unless they are prompted to consider it. In a range of studies, consumers preferred the cheaper option in greater numbers when the price difference was made explicit -- when price difference was specified as residual cash, and when other uses of the money were suggested -- thus generating an opportunity cost in their minds. Consumers classified as frugal are evidently more predisposed than spendthrifts to calculate opportunity costs without cues. [ABSTRACT FROM PUBLISHER]