Environmental Economics

Quote of the Day (and an overreaction)

In a story on baseball "quirkologists" (Baseball veers into left field), Ernest Abel, a professor of medicine, whom I'd never heard of:

Prof. Abel, who has written books on a wide range of topics, including graffiti, genetic disorders and “Marihuana: the First Twelve Thousand Years,” says names, initials and death just intrigue him.

“I do a lot of reading,” he says, “and like to speculate on a lot of different aspects of behavior.” Baseball, Prof. Abel points out, is not only a good place for data, it’s also more interesting than doing a study on, say, academics. “What kind of kid grows up and wants to be an economist?” he says.

Is that some sort of insult?

There are thousands of kids who grew up and wanted to be economists and these kids come in all shapes and sizes. Some of these kids are male, some are female. Some drink, some don't. Some are religious, some aren't. Most are a little more geeky  than the average person (i.e., they like math, computers) . One reason is that being an economist is a relatively good job. Some of these economists agree with Prof. Abel and do research on the sports industry. However, some of them don't even like sports and choose to do research on other important, and interesting, topics. The broadest of these topics is improving our understanding of human behavior with an ultimate goal of making society better off in some small way (i.e., inquiries into the nature and causes of the wealth of nations).

That, sir, is the type of kid that grows up and wants to be an economist.

From the (refreshed) Answer Desk

I realized recently that we haven't been getting questions submitted to the never dull Answer Desk.  When I checked the Answer Desk link to the left I noticed that the time limit had expired for comments on the link and there was no place to submit a question.  Knowing that there are millions* of you out there with pressing questions that only we can answer, I asked John if he could think of a solution (as you all know, he's the real brains behind this operation).  Anyway, as usual, he asked 'how high?' when I asked him to jump and the link is fixed. 

So the Env-Econ Answer Desk is open for business again**.  Tell your friends, classmates, parents, in-laws.  No question is off-limits and no question too stupid (but keep in mind the answers may be stupid).  Ask away.

*or one

**Really I've been lacking in post ideas lately and I'm looking for you to save me before the*** Hammer of John comes down on me for being an anchor around his neck.

***Mixed metaphor warning.

ASSA job interview survival tips

If you are unlucky enough to be looking for a job at the 2009 ASSA meetings in San Francisco (I won't be there so don't look for the guy wearing eyeglasses and an ill-fitting suit talking to himself on the sidewalk) during what is sure to be the crappiest market since the early 1990s, you definitely need to review my list of 20 ASSA job interview survival tips (originally posted January 2, 2008):

1. Don't reek pot.
2. Don't say "[Your school] is not at the bottom of my list."
3. Don't mention the football or basketball team.
4. Don't mention that your fraternity/sorority has a strong presence on campus.
5. When the greeter at the door on the last day empathizes that the job market is really a grind don't mention that there is no way you could have handled the past three days without getting high.
6. If a questionner asks why you don't pursue [insert difficult extension to your theoretical model] in your dissertation, don't offer that it would be much harder and you need to wrap things up within the next year (the correct answer is I'm going to pursue that extension after my defense due to time constraints).
7. Don't reek Bourbon Whiskey.
8. This advice is likely too late, but anyway, don't post your negative thoughts about the places you are applying to on the internet.
9. This advice is likely too late, but anyway, if you are a serious bodybuilder, time your steroids cycle so that you're not stacking before the interviews. No one takes a bulked up, raging, hairless, infertile PhD candidate very seriously.
10. Don't offer your opinion on your fav for the, ahem, at the risk of self-promotion, Nobel Prize in economics, ahem.
11. Don't confuse "the boss" (Springsteen) with the department chair.
12. Don't read the interviewer's papers, unless they are on your graduate seminar's reading list (e.g., How am I supposed to respond to "Wow, your latest paper in the southern journal of environmental and resource economics and policy/management rocked! How, in god's name, did you do that?" I get that question ALL the time and, self-importantly, it is SO embarrassing.)
13. Don't glance at your watch, worrying about being on time to the next, better, interview.
14. Don't mention blogs, blogging or Freakonomics. Or Mankiw's blog.
15. Don't mention the insightful quirkiness of the E&UE blog.
16. Don't mention your interest in Heterodox theories, unless this is your dissertation. And if so, no offense, good luck!
17. Don't quote Mystery Men (e.g., "I just wanted to say that I had a really great time tonight, and you were really nice to me, and I would love to, uh, take you out some time. But if I don't call you I just want you to know that it's because I'm dead."), Seinfeld (e.g., "Look, Vanessa, of course the market fluctuates. Everybody knows that. I just got fluctuated out of four thousand dollars! ") or Fight Club (e.g., "You don't talk about fight club").
18. Don't sound like you practiced your answers.
19. Don't talk about graduate teaching with schools that don't have graduate students.
20. Don't reek pot.

1. Don't reek pot.
2. Don't say "[Your school] is not at the bottom of my list."
3. Don't mention the football or basketball team.
4. Don't mention that your fraternity/sorority has a strong presence on campus.
5. When the greeter at the door on the last day empathizes that the job market is really a grind don't mention that there is no way you could have handled the past three days without getting high.
6. If a questionner asks why you don't pursue [insert difficult extension to your theoretical model] in your dissertation, don't offer that it would be much harder and you need to wrap things up within the next year (the correct answer is I'm going to pursue that extension after my defense due to time constraints).
7. Don't reek Bourbon Whiskey.
8. This advice is likely too late, but anyway, don't post your negative thoughts about the places you are applying to on the internet.
9. This advice is likely too late, but anyway, if you are a serious bodybuilder, time your steroids cycle so that you're not stacking before the interviews. No one takes a bulked up, raging, hairless, infertile PhD candidate very seriously.
10. Don't offer your opinion on your fav for the, ahem, at the risk of self-promotion, Nobel Prize in economics, ahem.
11. Don't confuse "the boss" (Springsteen) with the department chair.
12. Don't read the interviewer's papers, unless they are on your graduate seminar's reading list (e.g., How am I supposed to respond to "Wow, your latest paper in the southern journal of environmental and resource economics and policy/management rocked! How, in god's name, did you do that?" I get that question ALL the time and, self-importantly, it is SO embarrassing.)
13. Don't glance at your watch, worrying about being on time to the next, better, interview.
14. Don't mention blogs, blogging or Freakonomics. Or Mankiw's blog.
15. Don't mention the insightful quirkiness of the E&UE blog.
16. Don't mention your interest in Heterodox theories, unless this is your dissertation. And if so, no offense, good luck!
17. Don't quote Mystery Men (e.g., "I just wanted to say that I had a really great time tonight, and you were really nice to me, and I would love to, uh, take you out some time. But if I don't call you I just want you to know that it's because I'm dead."), Seinfeld (e.g., "Look, Vanessa, of course the market fluctuates. Everybody knows that. I just got fluctuated out of four thousand dollars! ") or Fight Club (e.g., "You don't talk about fight club").
18. Don't sound like you practiced your answers.
19. Don't talk about graduate teaching with schools that don't have graduate students.
20. Don't reek pot.

My best post of 2008

I left a comment on a green jobs post the day after pagan celebration of a Christian holy day:

That is why economics is known as the dismal science. We strange economists are most adept at recognizing the opportunity costs of various decisions. No one else really seems to care if opportunity costs offset some, or all, of the benefits of a good idea.

Opportunity cost is a strange notion to some (especially intro micro students) ... it is the value of the next best alternative whenever a choice is made. For example, if I purchase a $1000 flat panel LCD TV, the true cost of the TV is not $1000, but what I could purchase instead (such as $500 in each kid's college education 529 plan [sorry kids]).

In the case of green energy subsidies, if you are an economist then you must at least wonder if this is the best way to spend the money. There are benefits of pushing down the costs of green energy (e.g., improved air quality), and there are opportunity costs. Ignoring the opportunity costs is likely to lead to wasteful spending. Considering the opportunity costs is likely to lead to better social decision making -- regardless of whether the benefits of the subsidies exceed the costs.

The notion of opportunity cost, its recognition and the inevitable result that not all great sounding ideas are really great ideas, is the most important thing that economists bring to many policy discussions. Pointing out the unpleasantantries of opportunity cost is one of the purposes of this blog. The dismal part of the dismal science can not be avoided.

Throwdown!

From Mankiw's Blog:

Each year, I meet a number of highly promising students who were accepted by [MIT and Harvard] and are having trouble choosing between them. Here is my advice:

1. Don't sweat it. You will get a great education at either place.
2. Look up your favorite ranking of economists' productivity and look at which school has more faculty near the top. Those are the profs you want to hang around and learn to emulate.

For example, if you use this standard ranking and look at the top 50, you will learn that MIT has 3 and Harvard has 12.

That should settle the question.

Not quite.

From the Answer Desk: Monitoring Cap and Trade

Reader Jason Welker received the following question from a high school student:

It’s very interesting how this whole marketing pollution rights works. In this way the “commons” in the tragedy of the commons becomes privatized, and companies are forced to take responsibility for their pollution which is being dumped into the atmosphere.
I do have one question, though, and that is how does one regulate the amount of pollution a factory dispenses into the air? How can the government be sure that a firm is not violating the law by dumping more than its licensed amount?

My question:  Why do Jason's high school students ask better questions than my PhD students? 

Anyway, I'm getting ready for a lecture on the EPA's Acid Rain Program and I happened across this answer...

From the Answer Desk

Reader Michael asks:

Drs. Whitehead and Haab,

This semester I've been taking a course in Environmental Studies.  I've developed an interest in the fields of ecological economics and environmental economics.  My own further reading is starting to skew toward the more radical figures in the field (for example, Hermann Daly and Robert Costanza) due to my own proclivities in that direction.  I would like to develop as balanced a perspective as I can.  Could you make some recommendations for introductory reading?

Dr. Haab, I thank your institution for allowing my beloved Fighting Illini to get back to the Rose Bowl.  I was 1 year old last time and wondering whether I would be a father before I'd see it again.  Of course, we're going to get pounded into a little puddle of goo by USC, but it'll be nice for the boys to go out to Pasadena and soak up some rays.  Good luck against LSU.  Also, Dr. Whitehead, that win against Michigan was a lovely bit of schadenfreude.  Thanks.  Hope you're having a lovely holiday season.

Since Michael did such an impressive job of sucking up (refering to us both as Drs, wanting a balanced perspective and flattering both schools' football teams), I've decided to answer his question directly rather than burying it in another sarcastic, uninformative answer desk post.  My recommendation for a good introductory environmental economics text for non-environmental economists is Tietenberg's Environmental Economics and Policy. 

I have used this text a number of times for intro classes for majors and non-majors.  Econ majors find the text a little simplistic, but non-majors--usually environmental studies types--almost always come away with an appreciation for environmental economics and a depreciation of their belief in the pseudo-science that is ecological economics (I kid). 

From the answer desk: A year's worth of nonsense in one post

When we started this blog, I agreed to put the answer desk on the site so I could spout wisdom frequently and quickly and so I would seem accessible to our readers.  Unfortunately I always forget that I'm forgetful and I forget to check for new questions.  To make up for it, here are responses to a year's worth of questions all in on post, carefully selected for purposes only I know.  Enjoy.

The Answer Desk Homework Policy

It's the beginning of a new school year and a new crop of struggling econ students are starting to realize that their homeworks require 'work.'  As has been the occasional case over the past 2 years, The Answer Desk is starting to get questions that bear a remarkable resemblance to questions than might be asked in standard econ classes*. Take this example recently submitted to The Answer Desk:

Suppose that an economy has two consumers with preferences over air quality andconsumption that are represented by:
u1 (y1,x1) = a ln y1 + (1 − a) ln x1
u2 (y2,x2) = a ln y2 + (1 − a) ln x2
where a=(0,1) . Suppose that air quality is 1= x1 = x2 and that consumers must divide one half unit of consumption, y.

(a) Describe the set of Pareto optimal allocations.
[If you are interested in the rest of the problem, click here]

The Env-Econ Answer Desk has a non-written--now written--policy of not doing other people's homework for a number of reasons:

Is Colby College the Dolphins after Shula or the Cowboys after Landry?

From the RESECON listserv:

In anticipation of my retirement from teaching at the end of this academic year  Colby will be in the market for my replacement this year. We will have a team interviewing at the meetings in New Orleans in January.

...

Tom Tietenberg

Almost everyone who teaches environmental economics begins with Tietenberg's book. If you are bold enough to attempt to replace a legend, the ad is below.