Environmental Economics

Post recession summer getaways

Despite yesterday's declaration that the recession is over, many are still struggling to find a summer vacation for the family on the cheap.  For those to whom this applies, thank your Federal travel assistants for solving your dilemma (from CNN.com):

It's hardly a bailout, but the federal government is hoping that waiving fees at national parks will help boost local economies across the country. On three weekends this summer, the National Park Service will offer fee-free weekends to encourage cash-strapped families to visit the parks.

Secretary of the Interior Ken Salazar announced the initiative Tuesday at a news conference at Cuyahoga Valley National Park in Ohio.

"National parks also serve as powerful economic engines for local communities, and we hope that promoting visitation will give a small shot in the arm to businesses in the area," Salazar said.

Many national parks were bracing for a busy summer, and this improves the tourism forecast, said George Price, superintendent of Cape Cod National Seashore.

"Sometimes, when the economy downturns, places like the seashore see an upsurge because people choose to stay closer to home," Price said. "Visitation will be very strong this year. The question will be how much people will actually spend when they come to visit."

And, of course, what the local multiplier is?

...and how many jobs will be created?

Where I'll be drinking beer this weekend

We're headed out for our annual Memorial Day weekend trip to Lake Cumberland, Kentucky.  Let's hope fo no repeats of last year's 'incident.'

Question of the Day

Will there be travel funds?

From the inbox:

On or about April 1st you should have received notification that your abstract (Serial Number 0611) for the paper, Economics of recreational inland striped bass and hybrid striped bass fisheries, that you submitted to the AFS'09 Program Committee was accepted as an oral presentation.  

The Program Committee has just completed assigning all talks to specific sessions each day at specific times and room locations. In nearly all cases, contributed papers were assigned to your first choice of topics.  With rare exceptions, all papers submitted as part of a symposium remained in that symposium.

Our Program has you presenting your oral paper in the following symposium or contributed paper session:

• Invited paper for a symposium (and organizer's last name): Striper 2009: Inland Striped Bass Mgmt - Bulak

In case you were wondering why I didn't flame your comment last Thursday ...

... I was at the World Bank presenting this (preliminary, i.e., not ready for prime time) paper:

Joint Estimation of Revealed and Stated Preference Averting Behavior: An Application to Improved Municipal Water Supply in Kathmandu, Nepal

by Subhrendu K. Pattanayak and John C. Whitehead

Abstract. In this paper we demonstrate an approach to combining and jointly estimating revealed and stated preference data for drinking water quality and improved water supply. The application is to piped-water services in Kathmandu, Nepal. The revealed preference model uses averting behavior method data on the decision of whether to treat water. The stated preference model uses contingent valuation method data on the decision of whether to hook up to an improved water system. The bivariate probit model is used to jointly estimate the determinants of the decisions. We test for common coefficients across the revealed preference and stated preference data and find evidence that parameters related to the willingness to pay for health risk reductions are statistically equal while other coefficients vary. Households are willing to pay $3/month (US$) to reduce health risks. Averting behavior data suggests that water treatment generates an additional $3/month in joint production benefits (e.g., improved taste). The willingness to pay for the reduction in health risks, joint production and improved water supply is $18/month.

Feel free to download the paper (PDF) and/or presentation (PDF) while supplies last.

Well at least I work in a nice building once I get here*

Great news from the official spouse of Env-Econ this morning:

If you typically use Rt. 315 to get to and from the Ohio State University area...

I do...

your life is going to get more complicated this summer.

Wonderful...

The Ohio Department of Transportation will kick off a $24 million bridge-renovation and repaving project on the north-south artery in mid-June that will close 10 exit and entrance ramps...That's because all northbound traffic will shift to what is now the southbound side of the highway, said Nancy Burton, ODOT spokeswoman. There will be two lanes open in each direction, down from three, which should mean there will be some rush-hour backups unless a substantial number of people choose other roads, she said.

"There are alternate routes" to the university, Burton said. "It's not like we're going to be cutting off access to Ohio State."

Just all the convenient ones.

*If by nice, I mean crappy.  The University has a list of buildings in need of restoration and a list beyond hope (to be demolished when funds for replacements are available).  We're near the top of the latter (pun intended).

Opportunity cost of time

I'm in Cary, NC on the campus of SAS Institute for the first time:

PROC REG;
MODEL Y = X1 X2;
OUTPUT OUT = DATA2;
RUN;

In addition to telling SAS jokes, I'm attending the NC Sea Level Rise Risk Management Study Scoping Workshop. There are about 75 people here, I'm guessing about 50 are volunteering their time. If the value of our next best alternative (e.g., teaching, research) is $50/hour, then the cost of each hour is $2500. We're busy for about 15 hours. Total cost to society is on the order of $37,500.

With friends like these ...

From the inbox:

To: Friends of Ulvön

From: Organizers (via Bengt Kriström)

The 16th Ulvön Conference on Environmental Economics will take place 16-18 June 2009, at the island of Ulvön, Sweden. Speakers include:

• Stephen Polasky, Minnesota, USA

• Robert Mendelsohn, Yale, USA

In addition, there will be a performance by the premier Swedish  Bellman interpreter

Thord Lindé

About the conference: http://www-sekon.slu.se/~bkr/ULVOgreet.htm

We would be much grateful if you pass this message on.

Done!

Friedman goes to Delhi

Tom Friedman filed today's column from New Delhi:

The U.S. Embassy’s roof is loaded with antennae and listening gear. The Chinese Embassy’s roof is loaded with ... new Chinese-made solar hot-water heaters. You couldn’t make this up.

The rest of the column on Indian solar cars and the Indian Youth Climate Network is worth a read, too.

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.

Happy Thanksgiving

Following up on John's travel post...

Despite plummeting gas prices and unusual last-minute holiday deals on airplane tickets, more people are expected to stick close to home this Thanksgiving.

In fact, the Automobile Association of A merica says the 41 million Americans expected to take trips at least 50 miles for Thanksgiving is about 600,000 less than traveled last Thanksgiving.

The reason, as a surly economist might say? It's the economy, stupid.

"The economy is in such bad shape. ... They're still really hesitant to take that trip," said Beth Mosher, spokeswoman for AAA Chicago.

In comparison, over the July 4 weekend when gas prices were far higher than the same weekend the previous year, the number of travelers dropped just 2.3 percent, she said. At that time, the economic news wasn't as dire as it is now.