Environmental Economics

I would like to buy a Think Tank and use it to shoot some smarts into my kids

From the inbox:

The International Center for Climate Governance has launched today the Think Tank Map, a new observatory that provides an overview on the think tanks active in the field of climate change governance.

Apparently Europeans think more than Americans.  Either that, or Americans are much more efficient at thinking than Europeans.

Monitoring and enforcement

Safety (and environmental) regulations have no teeth unless the monitoring and enforcement effort is there:

After the Upper Big Branch Mine disaster killed 29 miners last year, federal coal-mine regulators launched a new program of safety blitzes, showing up unannounced at mines in Kentucky and other states, seizing telephones so people underground would get no warning, and fanning out in search of hazards.

Since April 2010, the federal Mine Safety and Health Administration has conducted 251 so-called “impact inspections” in coal mines, including 73 in Kentucky and seven in Indiana.

Those safety sweeps have netted 4,530 citations for violations, including nearly 2,000 in Kentucky and 111 in Indiana. At the same time, MSHA has ordered 427 temporary mine closings to fix problems, including 174 in Kentucky and six in Indiana.

via www.courier-journal.com

In your regulatory model, attach a probability of getting caught with a violation variable and taking the derivative. You'll see that safe behavior is proportional to that probability.

Consider the graph at the right. The number of deaths in a "safe" year, defined as not 2006 or 2010 (recoding 2005 at 23 and giving 2011 an annual adjustment), is 26. The additional lives lost in an "unsafe" year is about 21.5. If we are valuing the lives saved at $6+ million, the extra monitoring and enforcement cost would need to rise by $129 million before the net benefits are negative.

Scary

From the inbox:

In the spirit of Halloween, Huffington Post published an article called “The 10 Scariest Real Places in America.” Wondering about the number one scariest locale? Downhill from strip mining operations in West Virginia. Whether it’s the toxic coal slurry, the flooding, or the constant threat that forceful blasting will send a chunk of flyrock through your roof, living near a mountaintop removal site is indeed a scary thought.

Isn't this the equivalent of walking into a Chevrolet dealership and asking the manager which Ford car she would recommend?

From the inbox:

Hello Mr. Haab,

I'm writing you because I will be soon graduating from the University of Illinois at Urbana-Champaign with a degree in Ag. Econ - Env. Econ and policy. I have always considered going to grad school, and with the deadlines approaching I've yet to make my mind on which universities to apply to. So far I would possibly be applying to U of I, Rhode Island, MSU, Maryland, UC Davis, UC Santa Barbara and possibly Texas A&M. If I could reduce my list to 5 candidates, which would you recommend?

Response:

Ohio State?

When a shortage doesn't lead to higher prices

A pumpkin puzzle:

North Carolina is a bit player in the national pumpkin market. The crops in Northern states that are major producers, such as Pennsylvania and New York, were hit even harder by the storms, creating a gaping pumpkin shortfall for most of the East Coast. That siphoned some North Carolina pumpkins north, adding to the scarcity here. ...

The net effect for North Carolina pumpkin shoppers in this weekend's last mad rush for jack o'lantern fodder: almost no extra-large pumpkins; only a modest supply of smaller sizes; a complete absence of some varieties; and pumpkins that, in some cases, won't last as long once you get them home. ...

The shortage doesn't automatically mean higher prices for retail customers, though.

["Pumpkin kingpin" Julian] Howell [who "is somewhat rounded himself, emphasizing his resemblance to his products as he stalks the farmers market in an orange T-shirt"] said his farm had kept prices steady for wholesale customers like roadside pumpkin patches.

And a buyer for a Walmart store in central North Carolina had called and offered $110 per bin of pumpkins that would normally cost $60 to $80. He said the store planned to sell them below cost because their customers expect to find pumpkins.

A spokeswoman for the Salisbury-based supermarket chain Food Lion said the shortage seemed to have affected all major retailers, but that Food Lion had been able to piece together a proper supply and hadn't let the scarcity affect prices.

via www.newsobserver.com

For Walmart and Food Lion (who I assume paid higher prices as it pieced together a proper suppy) it appears that pumpkins are loss leaders (or the quality is lower this year since the extra rain reduces how long they'll last on your front porch). I don't know enough business economics to understand why you wouldn't raise wholesale prices to roadside pumpkin patches ... do they have monopsonistic power?

PhD Comics: Halloween 2011

Source: http://www.phdcomics.com/comics.php?f=1448

My grad school buddy reminded me about this today

From the inbox:

Dear SEA Conference Participant,

The Washington Marriott Wardman Park reservation cutoff date is Friday, October 28, 2011.  If you have not yet secured your hotel reservations for the 2011 SEA Conference to be held on November 19-21, 2011 at the Washington Marriott Wardman Park, please contact the Washington Marriott Wardman Park Reservations Department at 1-800-228-9290 and reference the SEA Conference to receive the SEA Conference Room rates of $187.00 for single/double plus $20.00 for each additional occupant and to access the SEA room block.  Alternatively, hotel reservations may be obtained via the Marriott Wardman Park SEA Conference Reservation webpage available by clicking here.  After October 28, 2011, all room prices will increase to the prevailing rack rates and any remaining rooms will be released by the hotel for general sale.

The SEA encourages all conference participants to register in the SEA room block at the Washington Marriott Wardman Park.  The conference room rate pays for the conference meeting rooms and helps keep the registration price low.  The SEA is required to pay a substantial penalty in the event that we do not fill our reserved room block.

This is what I said about this sort of thing two years ago:

The hotel is overcharging for each room to pay for the conference meeting rooms. When facing a high price, such as in a year with limited travel budgets, consumers tend to shop around. After a bit of Travelocity research, I've noticed that I could register as a regular customer at the Rivercenter and get a non-conference rate of $159/night. There are also other nearby hotels, including another Marriot, for that price and below. My guess is that many conference attendees will avoid the conference room rate, especially if they must pay part of their own travel, and the SEA will fail to maximize profit from this conference.

An alternative would be to go ahead and charge a higher registration fee (about another $100, I think). Registration fees are reimbursable by employers and there are no substitutes. You must wear you name badge to gain admittance to the meeting rooms. Then, attendees could feel free to shop around and find the hotel that suits them best.

Economists are famous for explaining to governments and others that alternatives and free choice are good. It is odd when we violate our own advice.

Note: I'll be staying at the Rivercenter but I wish my favorite economics association would make more rational pricing decisions.

Travelocity is telling me I can stay at the Washington Marriott Wardman Park for $15/night cheaper than the conference rate. There are also several other nearby, cheaper hotels.

Picture of the day

Jimmy John's customer appreciation day: $1 subs + ~$5 time costs so I got a chicken salad bagel across the street.

Connected by DROID on Verizon Wireless

Vote for my haiku!

But only if you think it is worthy and/or if you don't understand all of that macro. Free Exchange: 

THE KAUFFMAN FOUNDATION conducts a quarterly survey of economics bloggers (you can see the third quarter results here). It tends to focus on current economic conditions and policy questions, but the fourth quarter questionnaire contained something a little different: a challenge to capture the state of the economy in haiku. The results are sublime. Here, for instance, is the contribution from Interfluidity's Steve Waldman:

This is not so hard.
Helicopter money please.
Wired straight to households. 

Below the jump, you can read all of the submitted haiku. After having a look, cast a vote for the best one here. And do note, the full results of the Kaufmann survey will be released next week (to which we'll link, no doubt).

Tax the Rich and Now
Borrow to Invest in Stuff
Bring Back the New Deal
- Daniel Gross

Boost U.S. Demand
Need More Money and Tax Cuts
Hands off the long run
-Karl Smith

Climate change question
Cap-and-trade or carbon tax
Either efficient
-John Whitehead

Double dip at bay
Despite moronic Congress
Europe sinks us all
-Ryan Avent

Econ guys, gentle souls
Think policies guide markets
Jail time is better
-Robert Cringely

Economy Grows Big
Increase in Stock Market
My Children Get Rich
-James Altucher

Economy sucks?
New policies shake things up!
Causing more suckage.
-Glen Whitman

Employment down, output up
Doing more with less
Until everything is done by no one
-Wade Roush

Intermodal loadings increase
Trade conflict looms without cease
Occupy Wall Street
-Stephen Karlson

jobs and Jobs are gone
need more Jobs to get more jobs
innovate to grow
-Arthur Diamond

Jobs are needed now
Austerity ill-timed
Action is required
-Jeff Miller

Keynes' America falls
Growth will emerge with startups
Hayek wins the day
-Tim Kane

many angry folks
watch political duck soup
less soup back to work
-David Zetland

Monetary stimulus is all that's left
Do it right or suffer
Target NGDP to end the quest
-James Picerno

More demand is needed
The Fed is responsible
Do not look elsewhere
-Scott Sumner

More public spending
Is needed to fill the gap
Sadly America fails
-Bill Mitchell

New Commanding Heights
Credentials Suffocating
Let the market work
-Arnold Kling

No one has a job
Except econobloggers
And they're not paid much
-Felix Salmon

Revenge of the Nerds
ZMP can't outcompete
Very small shell scripts
-Eli Dourado

The goal is simple
Get Americans to say
"I, Entrepreneur"
-Nick Schulz

The US needs jobs
Politicians have theirs now
With which they do little
-Austin Frakt

This is not so hard.
Helicopter money please.
Wired straight to households.
-Steve Waldman

Those kids blame the banks.
Is Wall Street pre-occupied?
Next: capital strike.
-Michael Munger

Uncertainty rules
While the economy suffers
Politics rejoices
-Pedro Albuquerque

When Japan fell in 1990s
They were lectured by the world economists
Time for Japanese to smile
-Amol Agrawal

via www.economist.com

Energy job creation?

Lesson to benefit cost students: Don't forget to count the ancillary/support jobs created when performing economic impact analysis.

Forget Vegas. Strippers are discovering they can make ten times as much dancing in the oil boomtown of Williston, N.D.

Thousands of men have come here seeking high-paying jobs working for the oil companies. And, at the end of the day (or four or five days when they're working on a rig), many of them are looking for some female companionship at one of the town's two strip club's, Whispers or Heartbreakers.

Word has gotten out about just how much money can be made dancing in Williston's strip clubs. The money is phenomenal, but the competition is stiff*.

*Trying to resist a puerile joke, but can't do it:  So is the clientele.