Environmental and Urban Economics

An "intellectual" can write a review without having read the book or seen the movie.  While I am not an intellectual, I have read this review of Matt Damon's Promised Land and I have a few thoughts to share.  Now, I'm not a big city lawyer but I can tell that this Hollywood star believes that domestic drilling has significant localized environmental costs that those who are leasing their land to energy companies are ignoring.

So, let's sketch a simple rural social cost story and see if the Coase Theorem applies.   Matt and Mike own adjacent properties.  Matt grows cows while Mike doesn't do much with his land.  A gas company offers Mike serious $ per acre for the right to drill for gas.  Mike accepts.

The NY Times reports about extremely highly levels of ambient air pollution in the growing city of New Delhi, India.   What is to be done?  My co-authored ADB paper, "Green Urbanization in Asia" offers some suggestions.   Here I want to list a set of possible feasible policy solutions.

1.  Is transportation growth to blame for New Delhi's pollution troubles?  Where are the coal fired power plants located?  If they are close by, have these coal fired power plants invested in scrubbers?

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According to Google Trends, 007 defeats the man from Princeton (at least measured in Google Units).

In a competition between Dr. Krugman and Larry Summers and Jeff Sachs,  Paul Krugman wins.

What does this all mean?  I have no idea.

As more New Yorkers move to California, this shifts who is the "median consumer" and provides incentives for stores and restaurants to raise their game in terms of variety and quality. If you don't believe me, then read this case study of bagels in Berkeley.  Joel Waldfogel wrote an important paper about the median consumer and this should be required reading for everyone who cares about cities.

The NY Times reports that  innovative chicken raisers such as Scott Sechler are experimenting with mixing oregano oil into chicken feed in order to grow healthy chickens.  This "organic" substitute for antibiotics may reduce bacterial disease in the chickens.  Is this "treatment" effective?   This is why we have clinical trials to test this hypothesis.  While I am not trained as a Vet, I can imagine that when chickens live in extremely high population density that infectious disease is rampant.

In this post, I will pose some questions that I know that I don't know the answers to.  If you can answer these questions, then you will become an important environmental economist.  I want more nerds to devote their scarce time to studying the micro economics of climate change adaptation so permit me to point you in some productive directions.    This is my holiday gift for all of my friends and readers and you can't regift it on Ebay!

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This NY Fed piece provides several case studies of employment dynamics in areas that experienced significant natural disaster shocks (h/t to Mark Thoma).  Based on these cases, the economists are optimistic about the NY Region's post-Sandy employment dynamics.  The event studies they present resemble the Blanchard and Katz state/year employment dynamics in their seminal Regional Evolutions work.   Within a system of cities, we have many choices over where we live our lives and invest.

In today's WSJ,  Matt Ridley has an optimistic climate change piece.  Unlike my work on climate change adaptation, he ignores how capitalist cities, individuals and firms respond to an anticipated challenge.  Instead, Ripley focuses on what we know about the function mapping aggregate global concentrations of CO2 increases into average temperature increases.  Here is a quote:

"Given what we know now, there is almost no way that the feared large temperature rise is going to happen. Mr.

As an undergraduate at Hamilton and during my first two years of graduate school, I was quite interested in the "consumption function".  I dreamed of the permanent income hypothesis, the life cycle hypothesis and contrasted these models with the simple Keynesian marginal propensity to consume (which I would call the "Monkey Model" when I taught at Columbia) out of current income.

Today's WSJ has an opinion piece by a prominent University of Chicago graduate.  Cliff Asness argues that taxes affect investment behavior.  As Washington prepares to make large changes to the tax code, Cliff argues that we need to anticipate the consequences of these tax changes.  Many Keynesians implicitly assume that there is no behavioral response to changes in tax incentives and Dr. Asness disagrees.