Environmental and Urban Economics

Are economists contributing to the well being of society?  In the midst of our ongoing macro challenges, a huge food fight had broken out among macro bloggers but let's not forget micro.  Today, the NY Times provides a good example of why economic models are useful.  In this article about the foreclosure abuse settlement, the reporters are concerned that this legislation will reward banks for activity they would have engaged in even in the absence of the settlement.  To quote one source in the article; ""The credits over all, Mr.

In the 1960s, John Kain studied the "spatial mismatch" hypothesis that posits that African-American unemployment rates were high mainly because this group disproportionately lived in center cities (due to racial discrimination in housing markets) while jobs were suburbanizing.  This physical distance between people and jobs raised the costs of working (due to high commute times).  His policy solution was to increase job access for this group.

When your car's fuel tank is near empty, you stop by a gas station and refuel.  This mutually beneficial trade requires no government intervention.  In the case of electric vehicles, a "Catch-22" emerges.   Drivers are less likely to buy an electric vehicle because they anticipate that they can't find the equivalent of a gas station to recharge their battery.  For profit gas stations do not invest in recharging stations for electric cars because nobody owns one.

The Wall Street Journal reports that Amazon will start collecting sales tax on California orders starting in September 2012.   The California sales tax rate is 7.25%.  If Amazon shoppers in California know about the Amazon tax regime shift and know the sales tax rate, rational expectations theory would predict that shoppers will "Pre-Order" all of the books and other things they plan to buy from Amazon.

Dear Matthew Kahn,

The Office of the University Registrar at the University of Chicago has been holding on to your diploma since you 

graduated in Summer 1993.   We would very much like to send you this unclaimed diploma. 

Please let us know by March 12, 2012, if this is the address you would like us to use. Once we hear back from you, we 

will mail your diploma within 3 business days.  Diplomas will be sent in a large flat cardboard mailing envelope.

On Monday after my 11am class, I will be happy to speak to UCLA students about my views on undergraduate transfer students.    Here, I would like to preview my main points.  I will also be happy to answer any student questions.

In my six years at UCLA,  I have taught thousands of students and many of them have been transfer students.  Many of these students have excelled in my classes and I hope to attract excellent transfer students in the future.

I am a nice guy.  The proof?  Yesterday,  I handed out over 130 copies of Climatopolis away for free today to my UCLA Freshmen.   Some of the students appreciated my contribution to their education but most of them didn't seem to care.  I also handed free copies to several of my friends on the faculty.  They appeared to be much more thankful than the students.  What does that say?

It suggests that I no longer connect with the undergraduates and that worries me.

It was 85 degrees and sunny in LA on Sunday and I took my son swimming at the UCLA pool.  Despite this good life, there are dark clouds surrounding LA's quality of life.  Kobe is getting older and the Clippers are now a .500 team since Chauncey was injured.   My son and I could defeat UCLA's men's basketball team in two on two.

The NY Times has a long piece about IBM's new business as it supplies "Command Centers" for mayors of cities around the world.   The article suggests that each Mayor seeks to be a benevolent leader (think of Ike during WW II) but that due to transaction costs was unable to know in real time how a particular crisis was playing out across the city's geography.  By providing real time information to the "leader", IBM is helping cities to cope with new news and shocks.

As a professor at a leading public university, I have a strong stake in helping UCLA identify new sources of revenue.  While we can chant "China, China, China", I believe in a diversified revenue stream.   Due to political pressure, public universities will not be able to continue to sharply increase tuition.  Federal grant dollars from NSF and NIH will soon start to decline.