Environmental Economics

Picture of the Day: Ever have that eerie feeling that someone is watching you?

View from my back porch yesterday.  The PGA's Memorial Tournament is in town this week.  The course is about 2 miles from my house.

A novel application of the hedonic pricing method

I read this poster at the 2011 AERE meeting:

Beyond the scenic views or flora and fauna, metropolitan area homeowners who live near a national wildlife refuge now have a different reason to appreciate the proximity. Research shows that such homes have higher property values than those that are farther from a reserve.

A study conducted by North Carolina State University researchers and issued on Wednesday by the federal Fish and Wildlife Service surveyed homes in urban areas that are close to refuges in three regions: the Northeast, the Southeast and California-Nevada. (They did not include data from, say, the Southwest, where refuges tend to be farther from urban centers.)

For homes that are less than a half-mile from a wildlife refuge and within eight miles of an urban center, property values were 7 to 9 percent higher on average in the Southeast and 4 to 5 percent higher in the Northeast. In the California-Nevada area, such homes were worth 3 to 6 percent more.

The data, drawn from the 2000 census, found that the 36 refuges studied added $300 million to local property values — a boon to both homeowners and the tax base.

via green.blogs.nytimes.com

Does that make me cool?

Alternative Proposal: Require all soda vendors to be located on the third floor or higher, and ban elevators (except for those with government-approved elevator needs)

New York City plans to enact a far-reaching ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, in the most ambitious effort yet by the Bloomberg administration to combat rising obesity.

The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas. The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces — about the size of a medium coffee, and smaller than a common soda bottle — would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March.

OK then...I'll take two.  But I'm sure he's already thought of that.

“Your argument, I guess, could be that it’s a little less convenient to have to carry two 16-ounce drinks to your seat in the movie theater rather than one 32 ounce,” Mr. Bloomberg said in a sarcastic tone. “I don’t think you can make the case that we’re taking things away.”

Then what's the point?

via www.nytimes.com

When the negative externality is lost jobs (and churches), higher taxes are ok?

I'm using "higher taxes" loosely here, but in the same way that anti-regulatory folks call any price increase a higher tax:

American Electric Power, which is based in Columbus, Ohio, is proposing a $1 billion retrofit to allow the plant to continue burning coal and has asked Kentucky regulators to approve a 30 percent increase in electricity rates to pay for the work. ...

Channeling the animosity toward Washington and fears about their livelihoods, coal producers, union leaders, landowners and railroads came together to pressure American Electric Power to back down on its plan to close the coal furnaces at Big Sandy. They have leaned on county judges, state legislators and other politicians to attempt to silence public criticism of the 30 percent electricity rate increase and to pressure the Kentucky Public Service Commission to approve the retrofit project.

Saving coal, they argued, justified the rate increase, which would cost the average residential customer about $472 a year in addition to the typical $1,580 annual bill today.

“I will grant you it is going to cost a lot of money to retrofit that plant,” said Nick Carter, the president of a company that represents landowners whose properties hold billions of tons of coal reserves. “But how many teachers will be laid off and how many churches will have to close if Big Sandy stops burning coal?”

This would be a neat contingent valuation question: Would you be willing to pay $A each month in higher utility bills in order to avoid the closing of Q churches? (please ignore that it is an open ended question, instead of a referendum). Where is A and Q are randomly varied over respondents in order to test for price and quantity (i.e., scope) effects. 

But seriously, when a price increase funds job protection the benefits of the policy equal the cost and the net effect is zero. This is simply a transfer from consumers to producers. 

Quote of the day

Actually, two (Even in Kentucky ...):

Across the United States, the industry is under siege, threatened by new regulations from Washington, environmentalists fortified by money from Michael R. Bloomberg, the billionaire mayor of New York City, and natural gas companies intent on capturing much of the nation’s energy market.

So when the operator of the Big Sandy plant announced last year that it would be switching from coal to cleaner, cheaper natural gas, people here took it as the worst betrayal imaginable.

“Have you lost your mind?” State Representative Rocky Adkins, a Democrat and one of Kentucky’s most powerful politicians, thundered at Michael G. Morris, the chairman of the plant’s operator, American Electric Power, during an encounter last summer. “You cannot wave the white flag and let the environmentalists and regulators declare victory here in the heart of coal country.”

Because, if the environmentalists declare victory, that means the air is clean. And that would be bad. Very bad.

Coal and electric utilities, long allied, are beginning to split. More than 100 of the 500 or so coal-burning power plants in the United States are expected to be shut down in the next few years. While coal still provides about a third of the nation’s power, just four years ago it was providing nearly half.

The decline is largely because new pollution rules have made coal plants more costly, while a surge in production of natural gas through the process of hydraulic fracturing, known as fracking, has sent gas prices plummeting. Together, the economics of coal have been transformed after a century of dominance in Washington, state capitals and the board rooms of electric utilities.

“The math screams at you to do gas,” said Mr. Morris, whose company is the nation’s largest consumer of coal.

I'd rather the math scream at me than one of Kentucky's most powerful politicians.

Study rules out stupidity as a cause of disbelief in climate science*

And the Yale research published today reveals that if Americans knew more basic science and were more proficient in technical reasoning it would still result in a gap between public and scientific consensus.

Indeed, as members of the public become more science literate and numerate, the study found, individuals belonging to opposing cultural groups become even more divided on the risks that climate change poses.

Funded by the National Science Foundation, the study was conducted by researchers associated with the Cultural Cognition Project at Yale Law School and involved a nationally representative sample of 1500 U.S. adults.

"The aim of the study was to test two hypotheses," said Dan Kahan, Elizabeth K. Dollard Professor of Law and Professor of Psychology at Yale Law School and a member of the study team. "The first attributes political controversy over climate change to the public's limited ability to comprehend science, and the second, to opposing sets of cultural values. The findings supported the second hypothesis and not the first," he said.

"Cultural cognition" is the term used to describe the process by which individuals' group values shape their perceptions of societal risks. It refers to the unconscious tendency of people to fit evidence of risk to positions that predominate in groups to which they belong.

The results of the study were consistent with previous studies that show that individuals with more egalitarian values disagree sharply with individuals who have more individualistic ones on the risks associated with nuclear power, gun possession, and the HPV vaccine for school girls.

via www.enn.com

*Unless you classify stubbornness as stupidity.

Picture of the day

Majority of Americans Agree: Protecting the Environment Creates Jobs

The majority of Americans (58 percent) think that protecting the environment improves economic growth and creates new jobs. The results are from a recently released poll by Yale University and George Mason University's climate change communication program. Only 17 percent of the poll's respondents think that environmental protection hurts the economy and job growth, and 25 percent think there is no effect. When there is a conflict between protecting the environment and improving the economy, 62 percent think it is more important to protect the environment, and only 38 percent thought economic growth is more important.

via www.enn.com

I can't even get the majority of people in my own house to agree on what to have for dinner.

Making people laugh, one opportunity cost joke at a time

As I was scrolling through the "environment" Google News headlines on my phone I found this one (Stand-up Economist proves otherwise):

Yoram Bauman, the world's first and only Stand-Up Economist, stopped off at Lancaster University Management School this month during his UK and Europe tour.

An economist and stand-up comedian, Yoram works at the University of Washington, specialising in environmental economics. He regularly performs at colleges, universities, companies and comedy clubs.

Yoram performed his stand-up routine to a packed and appreciative audience of students and staff in the George Fox lecture theatre on 10 May 2012. Earlier in the day he showed his serious academic side, delivering a seminar on his research interests in environmental economics.

The video doesn't show any of the "S*** happens" jokes, but those are funny. I don't care who you are.

And, by the way, I have recently read Yorams fat tails paper. It got me this much closer to understanding that stuff.

"Five colleges where students study"

And I think there are truly only five:

A story in today’s Post talks about a generational decline in study time, the number of weekly hours college students devote to actual study. Since the 1960s, the weekly total has dipped from 24 to about 15. College has become, in effect, a part-time job.

A graduate at the University of Wisconsin-Madison, one of academia’s most studious institutions. (AP Photo/Wisconsin State Journal, Craig Schreiner)Students say they are more efficient than before, and adults say they are busier - - distracted by work, dependent care and long commutes. Researchers who track study time say those things account for only part of the decline. Even at the nation’s most selective schools, where few such distractions exist, the average student logs only about 18 hours in weekly study.

Here are five schools - - not all elite, and not all private - - where students spent 18 hours or more in weekly study. That means the schools, two of which are in Virginia, are probably among the top 10 percent of colleges nationally in weekly study time, as measured by the National Survey of Student Engagement, the source of the study-time data.

And coming in at #5, my alma mater:

5. Centre College. Here is another remote liberal arts school, with small classes and a tradition of passing the “torch of knowledge” - - embodied by a sculpture at the center of campus. That tradition has, in turn, inspired a ritual of stripping naked and “running for the flame”. The Kentucky campus has the highest average for freshman study time (20.5 weekly hours) of any school I found.

Centre College has a campus culture of intense study, much like the four schools listed above.

“I usually get up around 5:30 or 6 and spend an hour doing personal writing,” said Natalie Pope, a junior from Louisville. Then breakfast, library and the gym. She’s also president of an interfaith organization, and leader of an Arabic language club, and she’s involved in student government, a member of a sorority, and an oboist in the college orchestra. Those things, Pope said, occupy her afternoons. Then, homework from 9 p.m. until the wee hours.

“It's not uncommon to see people closing out the library on a Saturday night,” Pope said.

Another quality Centre College shares with the other schools on this list (save the University of Wisconsin) is its remoteness. There are few hot spots to distract Centre students from their studies.

“It’s a very cute little main street, but there’s not much of a night life,” Pope said. “Your sole purpose in life is basically to be studying.”

via www.washingtonpost.com

Only the Phi Delts ran the flame back in the day.

I could tell a similar story as Ms. Pope. Could, as in if I had been as good a student. If I awoke at 5:30 it was only to relieve myself and then go back to sleep until my first scheduled class. Other than the rigors of D3 football (where you could show up late to practice because of a chem lab), my most time consuming extracurricular was a bi-weekly trip to Nicholasville (i.e., going over the hill) as Social Chairman and then Treasurer of Delta Kappa Epsilon (on Sunday nights we relieved ourselves on the lawn of the Phi Delts -- I'm not altogether proud of my behavior as a college-age male).

Hat tip: BW.