Environmental and Urban Economics

Urban environmental concerns are often used as a justification for blocking new housing construction in major cities. New tall buildings may block out sunshine and impede others' views from their existing buildings. New housing may crowd out public gardens.

The net effect of these actions is to raise urban housing prices. I certainly believe that there are environmental "green city" benefits from such actions --- thus the demand for living in such areas increases but in addition, these actions constrain housing supply. If demand is increase and supply is restricted, prices will rise and newspapers such as the New York Times will be puzzled by the "housing affordability" crisis.

Take a look at the 3rd paragraph in this Times article.

Suppose that people trusted strangers in urban areas. In this case, people would be more likely to use public parks, public transit, and perhaps even be willing to send their children to public schools. Private clubs, private transit and private schools have a "selection" effect of excluding others. The demand for such "exclusivity" is higher when people don't trust the "Average Joe".

Resources for the Future will soon publish a book titled: "Zoned Out Regulation, Markets, and Choices in Transportation and Metropolitan Land Use" by Jonathan Levine. I'm not sure if Peter Gordon is going to love this book.

"The search for solutions to urban sprawl, congestion, and pollution has inspired a wealth of alternatives, including smart growth, New Urbanism, and transit-oriented development.

With everyone blogging about Ben Bernanke's virtues, I thought about going against the grain and asking why does the Fed need a boss who is an A+ academic economist? Robert Barro wrote a funny Wall Street Journal piece several years ago documenting that the economy grew the fastest when there was no economist as the head of the CEA.

Alan Greenspan, armed with a pre-Tom Sargent NYU PHD, has done quite well without having published in the AER, JPE or QJE.

The world is urbanizing. I'm almost done writing a book on the environmental consequences of this trend. My "Green Cities" book explores whether urban growth mitigates or exacerbates local and global environmental indicators such as air pollution and greenhouse gas production.

I've thought about a variety of ways that urbanization affects the environment but today the New York Times has an article suggesting a pathway I hadn't thought about.

Dr.

In the mid-1990s, Al Gore and Larry Summers debated the merits and fairness of exporting trash to Africa. Could people in Africa be made better off if the United States sent them money and garbage? This issue is back in the news.

It is interesting to compare garbage to dirty manufacturing. Environmentalists have argued that in a globalized world economy a “race to the bottom” would take place such that poor nations with lax regulation would specialize in exporting dirty goods.

Today the New York Times published a pro-gas tax editorial. I agree with almost all of its substance except I’m confused by its first sentence.

Hurricane Katrina will offer an excellent test of George Akerlof’s work on adverse selection in the used car market. Over 500,000 vehicles in the New Orleans area were flooded. Used car buyers beware! You may be purchasing a “biohazard”. What will be the equilibrium?

The New York Times reports:

“Since the hurricane struck on Aug. 29, auto clubs and law enforcement officials have warned consumers to scrutinize used cars for water damage and investigate their histories.

Risk perception plays a key role in economic decision making both for consumers and producers. Post 9/11, people were afraid to fly and the airlines lost billions. Since the Chernobyl nuclear accident in 1986, people have been afraid to live and work near "Ground Zero".

The New York Times today reports on an effort to "reclaim" land near this disaster's epicenter.

Nearly a quarter of Belarus, including some of its prime farmland, remains radioactive to some degree.

Foreign Affairs Magazine has made the wise move of displacing one more piece about Kissinger and actually allows an economist to speak his piece. In reviewing Ben Friedman's new book, Joe Stiglitz reveals himself to be an ethical economist. As a Chicago Economist, I was impressed.

"In short, the debate should not be centered on whether one is in favor of growth or against it.