Thursday, February 23, 2012

The Cost of Urban Density

I'm sitting at a midtown Manhattan Starbucks waiting for a friend of mine who actually works.  Below, I supply a photo of some urban garbage that I found close to the Hilton Hotel on 53rd and 6th.

This image nudged me back to my work on "green cities" and density.  As you know, in several past papers I have extolled the green benefits of density.   But, this photo highlights that if NYC wasn't rich -- this densely populated place could be a real mess. I ran into this today as I walked through midtown.  Too many smoking people packed into too little space.  Maybe the makers of that 1960s sitcom Greenacres were correct?

But, $ can solve several problems.  This garbage must have been placed there with the intent of some well paid public sector worker picking it up and taking it somewhere.  NYC uses $ to create a moat between its waste and its consumption.  In many LDC cities, residents can't afford to do this.

As I lecture on "green cities", I interact with ecologists who argue that rich cities "artificially" green themselves by being able to export their trash.  If you had to sit in a dirty diaper all day, you might poop less!  I believe that this is their logic.  

As an economist who believes in free trade, I would point out that NYC has to pay for trash removal but I certainly agree that less trash would be produced if producers paid per bag versus facing a zero marginal cost incentive.

This topic popped up in  a lecture I gave to my UCLA freshmen last week.  I was facetiously arguing that they use too much toliet paper in the dorms because they face a zero marginal cost per sheet. I argued that a little person should sit there in the stall and sell the sheets for a positive price.  My brilliant freshmen looked puzzled and slightly disturbed. I told them that this logic would appear on their final and they should go think about it.