Given the comments I received from my UCLA students this fall, I have rewritten the entire book and it is starting to look quite strong. For those of you who have wondered about "Chicago Price Theory" and its applications to environmental and urban issues, this book offers an introduction. In my humble opinion, it simultaneously introduces the material and shows the reader what are many of the open research questions in the field. It also teaches the reader what applied micro economists do all day long and the challenge of integrating statistical analysis with incentive theory.
How is Chicago price theory different from neoclassical price theory, other than the normative position and its application in social and other contexts (e.g., marriage and family)? Did I just answer my own question?
Also, does Chicago Price Theory suggest that market price reflects market value? :-o
Warning: Spoiler Alert below the jump. If you haven't read 'Inferno' yet, don;t read below the jump, I'm going to give away the plot and ending.
I recently finished reading Dan Brown's (author of The Da Vinci Code) newest book 'Inferno.' As a casual reader of the book, I found it entertaining. Brown does his typical job of keeping the action moving, mixing in some interesting conspiracy theories, making me want to visit some cities I've never been to, and making it seem like being a college professor might be cool (although I have my doubts). I didn't enjoy it as much as The Da Vinci Code, which I didn't enjoy as much Angels and Demons, but still a good read (and I refuse to accept that The Lost Symbol was written).
But, as an economist, I found the book to be complete nonsense.
So I was reading this CNN story this morning about the recent increase in bottlenose dolphin deaths on the east coast.
The carcasses of dozens
of the marine mammals, seven times more than normal, have been washing
up on beaches this summer, and scientists are struggling for answers to
In Virginia alone, at
least 164 dead dolphins have been found this year, said Joan M. Barns,
public relations manager for the Virginia Aquarium in Virginia Beach.
Almost half of those, 78, have washed ashore in August, she said.
As of Tuesday, federal
authorities say, they have recorded 228 dolphin deaths this year from
New York to Virginia. In all of 2012, 111 deaths were recorded.
'Why,' you ask, 'would I bother reading about dolphins?' Well, I'm glad you asked. First, dolphins are cute. And B), I seem to have spent a significant portion of my adult life studying ways to use economics to inform decision makers on environmental and natural resource disasters. So, upon reading of an anomolous (that's odd) increase in dolphin deaths, I naturally wonder, what are the costs of dolphin deaths, and what are the benefits of preventing dolphin deaths?
So how do I find teh value of a dolphin. Naturally I turn to the only reliable source for finding such information...Google. So I Googled 'value of a dolhin.' No, reallym, that's what I Googled. because my typing skills suck. Fortunately, Google planned for my sucky typing skills and gave me results for 'value of a dolphin.'*
At its most basic, the process now consuming teams of BP and
government scientists and lawyers revolves around this: How much is a
dolphin worth, and how exactly did it die?
extraordinarily difficult to monetise environmental harm. What dollar
value do we place on a destroyed marsh or the loss of a spawning ground?
What is the price associated with killing birds and marine mammals?
Even if we were capable of meaningfully establishing a price for
ecological harm, there is so much that we do not know about the harm to
the Gulf of Mexico – and will not know for years – that it may never be
possible to come up with an accurate natural resource damage
assessment," said David Uhlmann, a law professor at the University of
Michigan and a former head of the justice department's environmental
Warning: Snark ahead. Well, gee, if only the lawyers could figure out a way to value environmental harm? Or a way to place a dollar value on dead birds or marine mammals. Maybe, just maybe, a bunch of people should get together and think about how lessons learned from how people place values on things like blenders and hamburgers can be translated into ways to place values on things like oil spills, or fish kills, or fish species, or natural hazard mitigation. And, maybe, with some pie-in-the-sky thinking, these new methods for valuing the impossible might develop to the point where someone could write a book explaining the methods with an obtuse title like "Valuing Environmental and Natural Resources."
Maybe. Oh, Maybe. Someday. One can hope.
*Have I ever mentioned that I am convinced that Google is the greatest invention ever?
I'm using Tietenberg and Lewis, Environmental Economics and Policy, in my sophomore level environmental and resource economics class this semester. I haven't taught this course in awhile so it seems very fresh. As such, I had some fun with planning out the order of topics. Here it is:
Chapter 1 – Visions of the Future Handout: The Market Forces of Supply and Demand Chapter 2 – Valuing the Environment: Concepts Chapter 4 – Property Rights, Externalities, and Environmental Problems Chapter 5 – Sustainable Development: Defining the Concept Chapter 7 – Natural Resource Economics: An Overview Chapter 14 – Environmental Economics: An Overview Chapter 8 – Energy Chapter 15 – Stationary‐Source Local and Regional Air Pollution Chapter 17 ‐ Transportation Chapter 16 – Climate Change Chapter 9 – Water Chapter 11 – Agriculture Chapter 18 – Water Pollution Chapter 12 – Forests Chapter 13 – Common Pool Resources: Fisheries Chapter 10 ‐ Land Chapter 19 – Managing Waste Chapter 5 – Valuing the Environment: Methods
Tietenberg and Lewis first cover the basic welfare economics and intertemporal allocation of nonrenewable resources (under the guise of sustainable development). They then present a natural resource economics overview and march through natural resource topics. Next, they present an environmental economics overview, which is really a misnomer since all of the meat and potatoes of environmental policy analysis is contained in this chapter, and then march through environmental topics.
My rearrangement first covers the basic welfare economics and intertemporal allocation of nonrenewable resources. I pushed the valuation chapter 5 to the end of the course for two reasons: (1) I'm not sure my students really need to know this stuff in detail and (2) I just finished teaching it in my Fall semester benefit-cost analysis course and am a bit burned out by it (i.e., "hypothetical bias, blah, blah, blah"). Then I'll run through the natural resource economics overview chapter quickly and spend plenty of time on the environmental economics "overview".
My guess is that we'll be about halfway through the course at this point. The rest of the course is divided into four modules:
Energy and the environment - energy econmics, air pollution and climate change
Water resources - water allocation, agriculture and water pollution
Renewable resources - forestry and fisheries
Land resources - Land use and waste disposal
I tacked on valuation at the end just because at that point I'll bet I'm ready to talk about it (if not before), but I doubt that we'll be able to get that far.
That is the plan. Comments are most welcome, especially if you see a problem with how I've rearranged the chapters.
PhD advisee and now Assistant Professor at University of Wisconsin Whitewater, Matt Winden, sent me this picture from his explorations at the Southern Economics Association Meetings (in New Orleans) book displays.
A few observations (in case you can't quite see if from the high quality cameraphone picture Matt sent--Matt, clean the lens every once in a while would you?--that's my book with Ted McConnell on teh Econometrics of Nonmarket valuation):
Matt was wandering around the book displays at the SEA Meetings. Interpretation: Matt couldn't find anyone to talk to so he wandered
aimlessly through the book displays trying to look like he was
interested. Matt, you did know that Bourbon Street was only a hop, skip and drunken jump away from the hotel, right? Step outside...there's a world to be explored.
The book was originally published in 2002. I find it interesting that it is still prominantly displayed at the Elgar display. Someone should really nominate this for some publication of enduring quality awards, right? Anyone? Bueller?
I really don't care about awards (but would still accept if nominated), the fact that it is so prominantly displayed is proof that the market has judged the book of high quality. No, really.
We should really think about getting to work on that second edition. We have said that for the last 5 years.
Thanks Matt for taking your own copy of the book (which I made you buy) and putting it up front on the display like I asked.
"This blog aims to look at more of the microeconomic ideas that can be used toward environmental ends. Bringing to bear a large quantity of external sources and articles, this blog presents a clear vision of what economic environmentalism can be."
... the Environmental Economics blog ... is now the default homepage on my browser (but then again, I guess I am a wonk -- a word I learned on the E.E. blog). That is a very nice service to the profession. -- Anonymous
"... I try and read the blog everyday and have pointed it out to other faculty who have their students read it for class. It is truly one of the best things in the blogosphere." -- Anonymous