Environmental and Urban Economics

The Oil Drum has recently presented a fascinating one-sided debate in which many folks mocked economists for not understanding key issues related to Peak Oil . As an economist, who is married to an economist and spends 85% of his academic time with other economists, it was quite good for me to see how smart people think about a key policy issue.

Steve Levitt posted a very reasonable discussion of his optimism that incentives for conservation and production would play a key role in mitigating any future “oil crisis”. The responses posted to Oil Drum boiled down to calling him “naïve” and ideologically driven in his faith in free markets.

Everyone knows that expectations play a key role in economic life. If I expect to live to be 100 years old, I save more than if I expect to live to age 45. How do people and firms form expectations over the future price of oil? If people expect that the price of oil will stay or rise above $3 per gallon, we all agree that buyers will demand "greener" vehicles and producers would invest more in green R&D to develop such vehicles.

Between 1980 and 2002, India experienced fourteen major earthquakes that killed a total of 32,117 people while the United States experienced eighteen major earthquakes that killed only 143 people. A disproportionate share of the deaths caused by such environmental shocks as earthquakes, floods, cyclones, hurricanes, and extreme temperature events are borne by people in developing countries.

Does economic development exacerbate or mitigate urban environmental problems? The environmental Kuznets curve literature continues to debate this question. In my book manuscript titled Green Cities, I explore what we now know about this topic. Today, Jim Yardley in the New York Times’ piece “Beijing’s Quest for 2008: To Become Simply Livable” explores some of the challenges this growing city faces.

Beijing has a major incentive to “green” itself.

Oil Drum and other blogs are drawing wide attention debating whether we are near an end of the oil age. The Oil Drum pointed me to a 8/13/2005 letter by Matt Simmons in the Washington Post that argued that Daniel Yergin is too optimistic about the future of oil. I have a few questions for Mr. Simmons.

Bloggers are not paid for the quantity or quality of their entries. Usually, suppliers produce zero when offered a price of zero. Why is the supply curve for blogs different than the supply curve for hotdogs?

One explanation is complementarities. Camera companies may give away free film to sell more cameras. Bloggers may give away their thoughts for free in return for two expected payments. First, we may view this as good advertising for our published academic research.

For the last month, I’ve been pretty carefully reading many economics blogs. I’ve wondered what determines whether a site is popular and I’ve tried to learn about what blog authors consider to be a “good posting”. In my opinion, a large (90%?) of the blog entries posted on Economics Roundtable require no graduate training in economics to produce. Is this surprising? Is this bad?

Many blog entries seek to help readers save time by pointing them to interesting articles out there on the web.

For decades urban economists have tried to unravel the “chicken and egg” issue of why people who live in high poverty areas are less likely to succeed.

I've been surprised by the unilateral actions some states are taking to reduce their greenhouse gas emissions. Why aren't states such as California and New York free riding? Do they think they are large enough to make a difference? What could be the mechanism?

"California, Washington and Oregon are in the early stages of exploring a regional agreement similar to the Northeastern plan.

The New York Times reports new facts today about obesity. About 24.5 percent of American adults are obese, the report said, and in 12 states more than a quarter of all adults are obese, Mississippi, Alabama, West Virginia, Louisiana, Tennessee, Arkansas, Texas, Michigan, Kentucky, Indiana, Ohio and South Carolina. The states with the smallest percentage of obese adults are Colorado, Massachusetts, Rhode Island, Connecticut, Vermont and Montana.

Here is a map presenting the current data.