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The Nobel Laureate James Tobin makes a number of wise points here about the challenge that Yale faced in the 1970s and 1980s for building up a cross-campus economics community.  These sound familiar.
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I felt that there were some problems related to the then new School of Management, and these may be continuing problems. One problem was, is, that SOM hires economists. The school should, of course, and there was a good prospect that SOM and the department could have useful joint appointments. We did have some, e.g., Paul McAvoy and Stephen Ross, but I have the feeling that in general joint appointments were not as successful as they could have been. Sidney Winter, who was primarily a department appointment, was also very suitable for an appointment at SOM and doing some teaching there. He wasn’t happy with his relationship with the school so we lost him a few years ago. I thought then and think now that there are some missed joint opportunities. The department would get a person who could add to the general intellectual climate of economics with only one-half a slot instead of a full slot. There are a number of areas that would make sense to be joint such as financial economics, industrial organization, regulation of business, any number of things like that that can be useful for collaboration in research and in teaching. But it doesn’t seem that we’ve been able to devise the ad hoc or systematic relationships to do that. It could also help to bring applied people into the department, which we need in several traditional areas of economics. We should have coverage in all the main areas. The school also has higher salaries for economists. The same economics Ph.D. would get more money being at the school than here. There’s just something about being a school of business instead of a department of economics. But I think we’ve gotten used to the fact that there’s a school up there, and they have bigger offices and plusher carpets and so on.

When John Lennon and Yoko Ono recorded Imagine, I doubt that they imagined a West Coast without any land use zoning restrictions.   In this blog post, I will imagine exactly this scenario.   My imagination was triggered by this piece written by three friends of mine.   Paavo, Michael and Michael have written an important short paper.

Imagine if land owners in California, Oregon and Washington State could use their land for any purpose they wanted.  Farmers could sell their land to suburban developers.  I could sell my house to a developer who wants to build a 5 story apartment building.    In a past 2016 blog post, I argued that perhaps as many as 200 million Americans would live in these states and the electoral swing would be such that Mr. Trump would not be our President today.  West Coast zoning in these progressive areas contributed to his election. Why?  Such zoning inhibited their population growth and thus their total electoral vote sway. 

Enrico and Chang argue that America would also be richer if more people could live in commuting distance of our central productivity hubs in Seattle, San Francisco, San Diego and Los Angeles. 

Never forget the spatial equilibrium model of Rosen and Roback.   If California, Seattle and Washington land owners are allowed to build housing to welcome an extra 100 million people, this would set off a construction boom that would enrich the lower middle class.  Housing in areas they would vacate would become cheaper.  Cities such as Milwaukee (despite the fact that the NBA Bucks are a great team) would experience  a decline in housing prices and this would increase housing affordability there. Professor Storper should celebrate this.   The West Coast Boom would trigger increased affordability in the rest of the nation.

The New President elected in 2020 could welcome new immigrants to this nation and these young and ambitious new entrants would move to these cheaper cities.  Our nation's demographic structure would shift as the new influx of young people would fund our Social Security obligations and America would get its groove back. 

Urban zoning laws are slowing us down.  In this case, why do they persist?  Bill Fischel taught us the answer long ago with his home-voter hypothesis.   For those Coasian optimists out there, how do we buy them out so that they allow for upzoning or the complete removal of zoning?

Now, I do not want people to read this blog post and conclude that I believe that "no zoning" is our best urban land use policy.  But, I do believe that "no zoning" is a better policy for the overall United States than our current set of local zoning laws.

Let's end with some algebra.  Los Angeles County's total land area equals 4,750 square miles.  If each of these miles could be built to Singapore's population density of 18,500 per square mile then 87 million people would live in LA alone.  Singapore's quality of life is viewed as quite high.  In the modern economy, density contributes to quality of life as we use our smart phones to navigate a city filled with opportunity to trade and learn.

Yes, I am aware that LA doesn't feature much rain but water markets can be used to allocate the scarce water and there would be huge water savings from converting much of California agriculture into cities.  The market would handle this issue as usual if we allow price signals to operate. 

This podcast was recorded back in 2010.     This is a recording of a talk I gave in Culver City about the economics of climate change adaptation.   I focus on the system of cities and the system of neighborhoods within cities and how they compete for economic opportunity.  In the spatial equilibrium, firms and households are re-optimizing and responding to emerging anticipated risks.  For two of my pieces on the "big ideas" here,  please read  essay #1 and essay #2.  

UC Berkeley's Dan Farber has written a very nice piece about the challenge that climate change will pose for today's 20 year olds in the year 2100.  As both a concerned citizen and as the father of a 17 year old, I take such informed predictions quite seriously.

The year 2100 is 81 years from now.  Think back 81 years ago to 1938.   FDR is our President and World War II is underway in Europe.   Only 2 million (of the 132 million Americans) lived in Florida at that time.  Could FDR and the British Ambassador Joseph Kennedy have anticipated any of our current technological and social trends?  The same laws of physics hold back then and now but much has changed.  Would they be surprised by the industries that are booming and the jobs in the modern economy?   Would they be surprised by the quality of medical care and food available in the stores?   Would they be surprised by modern communication and transport technology? You might say; "technological innovation is slowing down".   Yes, I know about Robert Gordon's thesis but in a world that has more educated people, larger aggregate world demand for great new products, and ample access to capital financing ;  I don't believe this.

In 1938, if we could meet a person in the 90th percentile of the New York City income distribution (so only 10% of the adults are richer than him) and if we wrote down her consumption of various goods and exposure to outdoor air pollution, how does her consumption compare to a person in the 8th percentile of the New York City income distribution today (so 92% of adults are richer than him)?   While the modern poor person might be poorer than the past rich person, the quality adjusted prices we face for goods have fallen so sharply that the purchasing power of today's poor person would surpass the purchasing power of the person in the past 90th percentile.

Returning to Professor Farber's piece, all of the possible climate scenarios he outlines that our children may face out to the year 2100 are possible.  The economic question here focuses on the "production function" of safety and quality of life.  If it will be warmer in the future, if the seas will rise; given our technological frontier, given our ability to innovate and migrate, how much will these anticipated risks lower our standard of living?   A simple example is that air conditioning offsets outdoor heat.  This idea generalizes.

The technological frontier is always shifting out and the main idea of directed technological change is that we focus our efforts (human capital and capital) on problems that are profitable to solve.  Why will the free market let us down this time?  Why is Paul Ehrlich correct and Julian Simon is wrong?   Pessimists must base their case on the absence of substitution possibilities.  What can't we substitute from?  An example, if the sea is rising then we retreat.  You might say "there is finite land";  I reply "then developers will use capital to build tall buildings that require less land per person".    This is substitution.  There are gains to trade and the trades will occur and we will be safer.

A constant debate in sustainability circles revolves around whether there are "limits to growth".  Going at least as far back as Kenneth Boulding, some have argued that the I=P*A*T formula holds and that the cumulative impact of 7.4 billion people achieving the American Dream will devour all of the world's resources.   I was surprised to learn today that Amazon's Jeff Bezos embraces this point of view endorsed by Paul Ehrlich. In this NY Times piece, he argues that we must prepare to leave Earth because we will run out of energy on this planet.  How would he respond to Paul Romer's and Julian Simon's ideas on discovering substitutes? 

I will soon attend an event that will honor Professor Robert Willis of the University of Michigan and Stanford University.  Here are my brief remarks;

"During my graduate studies at UChicago,  I worked for Bob as a TA and as a Research Assistant.  He served on my dissertation committee.   I greatly admire his love of economics and his love of a good joke.  He is now my friend and I greatly value that.   During his long and productive career, Bob has built up a great stock of crystallized knowledge.   Each day he continues to invest to augment this stock.  From our last meeting in March 2019, I see that he continues to gain ground on me.   Given his high level of  fluid intelligence, Bob faces a low price for acquiring more knowledge.  Bob has responded to this incentive by acquiring ever more knowledge.  Economic science and his field of decision making over the life cycle are both stronger because of his investments!"

Cooking recipes provide a blueprint for how to make a cake that serves 4 people.   Given that there is a market for cake inputs such as sugar and eggs,  you can use this blueprint to make 1 cake for 4 people or 2 cakes for 8 people.   A doubling of the inputs yields double the output and the quality of the output is roughly constant.  This is the constant returns to scale case.  Given that any household does not have a commercial sized stove, such a household will face diminishing returns if it tries to make cake for 100 people.  The oven isn't big enough.

This simple example is meant to prime you to think about this recent NBER working paper.    Once we have a blueprint for what works at a Boston Charter School,  can similar success be achieved at another school that precisely follows the recipe? The authors argue that the answer is "yes" and this is quite interesting.

I conjecture that the pilot study will often over-state the marginal gains to enacting the same recipe in a different setting.  Why?

Site selection --- in a world featuring heterogeneous treatment effects, the sites where the beneficial treatment effect is largest will be the most likely to receive the treatment in order to demonstrate to funders that "the program works".  Hunt Alcott's OPower work has documented this in a different setting (see his QJE paper).    I am also folding input heterogeneity into this category.   Assuming complementarities in the education production function, the schools with the best teachers will enjoy larger treatment effects if an innovative curriculum (the treatment) is introduced there.  So, in an opt-in design --- school districts with higher quality teachers will be more likely to opt in to receive an experimental new curriculum because these teachers are better able to adapt and thrive in using the new teaching techniques. 

The Hawthorne Effect  --  Those who participate in a field experiment and are aware that there will be an ex-post evaluation of the treatment will be motivated to do their best because they know that the program will be evaluated and will be more likely to be scaled up if the initial treatment effect is positive.

Managers -- If the schools with the best teachers have the best principals running the school, will constant returns to scale be observed for a given treatment?  Will the best principals engage in more accurate data collection (such as creating a balanced panel of student test scores) and not discourage the worst students to stay home on test days?  Such principals may be more curious about learning what works to make students better and prioritize this over worries about bad news headlines that his/her school is under-performing on standardized tests. 

General Equilibrium  --- This is a cheap one.  If we continue to double inputs -- -this rise in demand for the inputs (think of the eggs for the cake) will eventually raise egg prices if eggs are inelastically supplied.

So, the point of this blog post is to nudge field experiment economists to think about what breaks down with the CRS logic.

This discussion suggests that field experiment researchers should be talking to Industrial Organization researchers.  The latter study the market pricing and equilibrium output of quality adjusted goods (such as cars).  The field experiment literature in education is trying to figure out what is the marginal cost and average cost of improving student outcomes in school.  A school is a non-profit firms that supplies services (education).