The WSJ reports that Governor Phil Bryant is allocating $15 million from Mississippi’s share of BP oil spill damages to be invested in a minor league ballpark in Biloxi. The city itself has voted to issue $21 million in bonds backed by stadium revenues, but the deal apparently hinged on the state’s investment of BP funds.
Biloxi’s population has declined 10% (to 45,000) since Hurricane Katrina in 2005, and the 2010 oil spill must have added to the economic destruction. But BP’s oil spill didn’t ruin baseball in Biloxi — it damaged the beaches, the livelihoods of fishermen, and so on. It’s a stretch to take BP’s settlement money and pour it into new stadium construction.
A counter-argument might be that building a baseball stadium is the most effective way to stimulate economic development in Biloxi, and generates a higher return on public investment than alternative projects. But it is well known that stadium building is an effect, not a cause, of economic development — see Coates and Humphreys (2000) for example. Nevertheless, the city council’s 5-2 vote approving the stadium project was cheered by “most of the 150 residents and business owners” attending a recent meeting.
No doubt there are real benefits to be realized from this project, although the fact that outside funding is required suggests they may total less than the costs. I’d wager that the Beau Rivage Resort and Casino, on whose land the stadium will be built, is the primary beneficiary, and an active political player in the deal to approve it.
systems and regulators are debating where to best put limited funds to
improve safety: on upgraded signal systems or on structural repairs.
"The effort to calculate the value of lifesaving is a growing area of
research among regulators and economists alike, says Michael Livermore
of the Institute for Policy Integrity at New York University's School of
Law. The research enables "finer distinctions" about the cost that
society is willing to bear to lower risks, he says.... In the past, to
calculate the value of saving a life, the government used the value of
the wages a person would have been expected to earn over the remainder
of a lifetime, says W. Kip Viscusi, a professor at Vanderbilt University
who consulted with the Reagan administration to overhaul life
valuations in the early 1980s. At Mr. Viscusi's urging, the federal
government adopted a measurement known as the "value of statistical
life," or VSL-roughly speaking, the amount of money Americans find
reasonable to spend for a given reduction in the risk of death. The
switch to VSL raised the dollar value on preserving a human life. Among
other things, that made costlier safety regulations easier to justify on
economic grounds.... To calculate the value of life for a given
government regulation, agencies use wage, consumer-purchase and
job-safety data to calculate the premium already built into economic
data to account for relative riskiness. So economists deduce from
people's willingness to pay for safety features-say, air bags-how much
they value lowering the risk of death."
CLASSROOM APPLICATION: Students
can discuss the determination of the total expenditures, and allocation
of the money, to improve (rail) safety. The allocation of funds
between, for example, upgraded signal systems and structural repairs
depends on the marginal changes in the value of a statistical life
associated with each of the improvements. The total expenditures on
improvements in rail safety depends also on opportunity cost of the
QUESTIONS: 1. (Introductory)
The Southeastern Pennsylvania Transportation Authority (SEPTA)
identified a tradeoff in its expenditures to improve rail safety. What
is the tradeoff?
2. (Advanced) Suppose SEPTA allocates a
fixed amount of funds to safety improvements. In allocating these
funds between signal improvements and rail maintenance, SEPTA's goal is
to minimize the expected value of lives lost from train accidents. In
optimally allocating the funds, does SEPTA equate the decrease in the
expected value of lives lost associated with signal improvements to the
decrease in the expected value of lives lost associated with rail
3. (Advanced) What is the value of a
statistical life? Why is this criterion used in evaluating safety
programs better than the value of the wages a person would have been
expected to earn over the remainder of a lifetime?
Why was the federal government quick to adopt the value of a
statistical life as a criterion to evaluate the benefits of safety
This reminds me of a time not long after I got my PhD. I was golfing with my father and a group of his friends when one of them asked me, 'What do you do?" My father quickly jumped in and said "He has a a PhD in economics. But don't ask him what the stock market is going to do. He has no clue."
NBC was pummeled by viewers who took to social media after the network cut away early from the closing ceremonies of the London Games on Sunday to air a new television show, drawing outrage from those who tuned in for the highly anticipated musical spectacle.
The Twitter-sphere exploded, with "#NBCfail" and "#closingceremonies" trending worldwide, after NBC cut out performances by Ray Davies, Kate Bush, The Who and the Muse in favor of a commercial-free airing of "Animal Practice." ...
NBC did air the Who's performance at the closing ceremonies in late night, following "Animal Practice." But that did little calm the fury of viewers ...
And if you think that excerpt is from The Onion, here it is at the WSJ:
But NBC decided to delay [The Who] for an hour so I can watch some show that’s Scrubs in a veterinary hospital. I actually thought this was a joke. I kept waiting for NBC to say ha-ha. Because who would end two weeks of coverage by slicing off the very end of the ceremony featuring one of the world’s most famous bands? NBC, apparently.
I DVRed the thing so my kids could watch it at a suitable time (we watched the spice girls this morning before school). Naturally, thinking that NBC could not be so stupid, I stopped the recording at 11 pm. Now they'll never know who The Who is (are?).
I blame Bob Costas (the messenger):
"We'll be back from Olympic Stadium in about an hour for the London closing party featuring The Who. But stay tuned now for a full episode of 'Animal Practice,' the new NBC comedy presented commercial free."
Update: The video is now posted on NBC's website. Yet, "The Who performs 'Teenage Wasteland' ..."? I'm not sure, since I can't watch the video until I remember my Charter password, but I don't think they performed "Teenage Wasteland."
... hey, what do your notes look like (no one ever has asked me that). So, in order to keep the people happy, here is my comparison of consumer surplus and compensating variation from Benefit-Cost Analysis course last week (click for a larger image [hope it is correct!]). Today I get to explain "consumer surplus without apology." I haven't worried about this stuff in a long time, but we have a layer of graduate students enrolled in the course this semester (did you hear that SACS?).
General Electric predicts light-emitting diodes' share of its total
will more than triple in five years as regulation phases out
“LEDs are probably the
largest growth area” for the lighting industry, Michael Petras, chief
executive officer of GE's lighting business, said in an interview in
Frankfurt Monday. LEDs make up “less than 10 percent” of GE Lighting's
global sales, and that proportion probably will rise to one-third by
2015, with the overall market doubling “in the next couple of years,” he
In a call to arms for economists, David Zetland (from aguanomics) writes:
As an economist, I was appalled to read the comments of recent PhDs on Ostrom's award:
As I am sure you know, she has made critical contributions to understanding how common pool resources can be managed in the absence of private property rights. In these days of climate change, collapsing fisheries, etc., I can hardly think of a better person to get the prize (besides Williamson, whose contributions are also critical to understanding when markets/firms work or fail!).
Unfortunately, these NEW PhDs -- perhaps an unrepresentative sample or perhaps the best of the best -- seem to be ignoring relevance in favor of "mathiness"
Here's the money quote: "If she [Ostrom] is so big and important how come there isn't a theorem that is named after her? huh? tell me, smart ass!"
This is ridiculous.
I think it's high time that we BREAK the Core, replacing at least half of it with the economics of people -- not an imaginary, but mathematical homo economicus.
I am doing that in my course (http://www.kysq.org/EEP100/) for undergrads, but the real work (yes WORK) is really on remaking the PhD curriculum.
Haven't we falsified the importance of the status quo by now? It's time to discard this rejected hypothesis and try something different, something that WORKS.
"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