Environmental and Urban Economics

This morning is trash pickup time in Berkeley. As I walked to starbucks, I saw a person with a shopping cart on the residential streets. Her cart was filled with empty cans and bottles. She stopped at a house whose trash was ripe with bottles and cans set to be picked up. As she leaned over to pick these "free nickles" up, the owner of the home yelled at her from inside his house. He told her to "go away". What is going on here? This is a fight over revenue. Who gets the nickels? The City of Berkeley or the bums?

In other news, Lucas Davis and I are proud of this. I like his photo more than mine. Finally, I should note that today will be a historic day. Dora will join me at the UC Energy Institute's lunch so this marks her acknowledgement that she has joined the energy "fraternity".

"I leave you gentleman now and you will write it. You will interpret it. That's your right. But as I leave you I want you to know — just think how much you're going to be missing.

Ignoring the Keynesian Demand benefits for New Car makers, what is the payback period for the Cash for Clunkers payment of $4,500 measured solely in terms of reduced carbon emissions? My algebra suggests that it is 25 years or more and that's not too good.

UPDATE: Here is another set of calculations on this topic: Here is a Similar Exercise

UPDATE AGAIN: OK, I now realize that I am not the world's leading expert on C4C. This piece is also worth reading.

I was talking to a smart reporter today and he was telling me that he supports the Cash for Clunkers program saying that it not only benefits Detroit but also helps a variety of new car dealers who are more broadly scattered across the country. He got a pinch upset with me when I told him that if our sole goal is to stimulate new car sales then a more cost effective policy would be to release auto thieves from prison and let them get back to work.

Senior Citizens pay 25 cents to ride the Santa Monica bus. Here is the fare schedule. I was discriminated against and forced to pay 75 whole cents to ride. The Blue Bus claims that 80,000 people ride per day so let's do some arithmetic. Suppose that raise rates by 50 cents per ride. I doubt that anybody would substitute away but suppose that 75,000 people now ride per day. The increase in annual revenue = .5*75000*365 = 13.7 million dollars a year in new revenue.

Can we export our institutions into a LDC and help it grow? This book about Henry Ford's failed attempt to build "Fordlandia" in the Amazon suggests that the answer is no but it seems that Ford's treatment went only half-way.

The NY Times Declares that GDP Accounting should R.I.P. If we don't rely on GDP growth rates, how do we answer basic questions such as; "Are you better off than you were 4 years ago?" How do we judge when the economy is in bad shape? How will the Fed decide whether drastic intervention is warranted?

The challenge for economists is that we do not have a revealed preference test for figuring out your answer. Ideally, there would be a market for a time machine.

As Lucas Davis and I document in this July 2009 paper, we already have a "Cash for Clunkers" program in place. It is called international trade in used durables. The U.S has been shipping millions of old, dirty vehicles to Mexico. We use an extensive data set on recent U.S/Mexico trade under NAFTA to document the patterns of used vehicle exports and investigate this trade's environmental consequences.

A week in Berkeley is good for the mind but now I must work on my tan --- so I'm back at UCLA working in seclusion. It turns out that UC Berkeley is filled with great economists. They have not all left for Harvard or Obama. I spent all day monday and friday there and talked and talked and talked. There was a lot to talk about.

On thursday, I was downtown at the Public Policy Institute of California (www.ppic.org). As usual, there was a lot to talk about.

My students should think about transferring from UCLA to UCSB. They can get away from me and Mike Jura teaching "Energy and the Modern Economy" and instead take this sexy course. Now I understand why we got hit with this pay cut. UC faculty need to do a better job explaining why we are relevant and helping this state today and helping to build the human capital of the state's next generation of workers. When the LA Times portrays us like this, it doesn't help.