Wednesday, July 01, 2009

Strawberry Fields Forever

Living is easy with eyes closed. Misunderstanding all of the economics lectures... Hmm, on second thought maybe we should stick to the original words in the song? John Lennon was ahead of his time. He anticipated that Strawberry fields were a wise economic development path.

Real Estate economists, when not humming beatles' songs, are always thinking about capitalization effects. This article offers some distinctive insights for rural areas. We all know that standard localized amenities such as low crime, nice climate (think of LA versus Houston), clean air are reflected in home prices. You do not have to be Adam Smith to anticipate that those homes in nicer cities and located within nice neighborhoods within those cities will sell for a price premium.

This article claims that in the country side that there are high economic returns to siting a housing development next to "nice organic" farming. So this farming offers the green space and because it is organic, you know that there will be less chemicals (that might affect you) being dumped on it. The farm may even grow some of your food and this would let you sleep well at night as your carbon footprint shrinks.

This is a nice example of "consumer city" turning into "consumer countryside". I do like the photo of the tired hippie in the picture who appears to be worn out as he works at the organic farm. While in theory this must have been a dream job, what is the reality? Will he unionize? Will he go back to working at an urban starbucks?