Environmental and Urban Economics

This is an interesting example of regulations are made when two different parts of the government disagree about how to proceed. In this case, the EPA and Department of Defense appear to have opposite views on the effects of the solvent TCE. This Los Angeles Times article below suggests that many people have been exposed to it on and near military bases.

The theory of compensating differentials predicts that if people know that they are being exposed to a risk (such as cancer) they will be compensated through either higher wages or by paying lower rents for real estate. But, if people are unaware of what they are being exposed to then these "victims" will not be compensated ex-ante for living in a nasty place.

I am in rainy Berkeley attending a OECD Roundtable on Transportation, Urban Form and Economic Growth. There are roughly 50 participants and the group includes economists, urban planners, sociologists, political scientists and others. Such a diverse "Noah's Ark" offers benefits and costs. The major benefit is that I'm learning from the non-economists and several of my friends (the economists) are here.

The cost is that the discussion across groups is strange and meandering.

This article below provides an interesting case study debating the merits of engaging in a "Big Push" for encouraging the development of disease vaccines.

Some environmentalists have talked about similar initiatives for encouraging increased "green" innovation. A policy initiative that simply subsidizes R&D may yield little extra research if the supply of researchers is inelastic. In this case, the subsidies will simply drive up the wages of the core scientists.

Do demand curves slope down? China's government will soon offer us another test of econ 101 by increases its taxes on energy and resource consumption. Wooden chopsticks will face a 5% higher tax! What will people substitute to?

Free market environmentalits should be excited about this opportunity to study how consumers and producers respond to these higher taxes.

Good students always like report card day. This organization (http://www.ceres.org/pub/publication.php?pid=84) has determined which corporations are "naughty" and "nice" with regards to addressing climate change issues.

When I was in graduate school, I was taught that economics is the study of incentives and their intended and unintended consequences. Today, economics is morphing into the empirical field where we challenge the "conventional wisdom".

This paper http://www.nber.org/papers/w12102 offers some novel freakonomics.

A Healthy Economy Can Break Your Heart

Christopher J. Ruhm

NBER Working Paper No.

Suppose that you are Paul Krugman. You are a benevolent planner who wants to maximize the well being of all 300 million people in the United States.

Most cold cities have not performed great over the last 30 years. What is it about New York City, Boston and Chicago relative to other cities such as Cleveland, Detroit and Philadelphia. How do we explain why the former set have boomed relative to the second set?

My future colleague Dan Drezner provides some exciting analysis here.

http://www.danieldrezner.com/archives/002638.html

I was born in Chicago. I lived in NYC from 1973-1984.

Can public health epidemics such as SARS stop commerce in a major city? This article in the Times argues that globalized companies face the risk of losing access to their workforce in other countries if a disease spreads but that these companies have not planned for this contingency.

I've been blogging for 1/2 a year now. At the start, I had plenty to say but now somehow I have less to say. I did want to mention a promising branch of research in economics focusing on the consequences of media coverage.

It is clear to me that the media play a key role in focusing social interactions if the media is covering a story then everyone starts to talk about it. The Larry Summers at Harvard Excitement is one prime example.