Friday, February 15, 2008
A Great find from 26econ
by Ken Houghtonan invaluable time-wastera marvelous source of information (even if he doesn't list this blog).
Today's find is Sex, Drugs, and Water Utilities, the title of which I assume is a riff on Diane Coyle's great book (what Freakonomics should have been, and published four years earlier).
It appears to be a Sole Proprietorship, run by one David Zetland, a Ph.D. student in Davis, California. And it's not immune to noting that economic incentives can mitigate, but more often exacerbate, spillover costs and other negative externalities.
Today's sample is the effect of the state of Indiana on fishing in the Gulf of Mexico. Examining the Chicago Tribune article, Zetland notes the direct answer:
And what externality is causing the seasonal "dead zone" in the Gulf of Mexico?
Conventional thinking appears to be wrong, but the economic incentives to the farmers work only one way, the ethanol boondoggle. Zetland again:
Somehow, "teach a man to fish, and he won't be able to find any" is not the way I remember that old adage. Who could have predicted this? Tom.
Aaron Schiff's Economics Blog Directory is
Today's find is Sex, Drugs, and Water Utilities, the title of which I assume is a riff on Diane Coyle's great book (what Freakonomics should have been, and published four years earlier).
It appears to be a Sole Proprietorship, run by one David Zetland, a Ph.D. student in Davis, California. And it's not immune to noting that economic incentives can mitigate, but more often exacerbate, spillover costs and other negative externalities.
Today's sample is the effect of the state of Indiana on fishing in the Gulf of Mexico. Examining the Chicago Tribune article, Zetland notes the direct answer:
There's no free lunch. Pay farmers to grow something and they will. Besides the direct costs (fuel, machinery, etc), there are indirect costs (externalities) that others (people, fish) bear. If the farmers do not bear these costs, they grow too much and we all suffer.
And what externality is causing the seasonal "dead zone" in the Gulf of Mexico?
Indiana, Illinois, Iowa, Missouri, Arkansas, Kentucky, Tennessee, Ohio and Mississippi were the worst contributors to the dead zone.
The nine states represented one third of the 31-state Mississippi River drainage basin, but were responsible for more than 75 percent of the nitrogen and phosphorous that deplete oxygen from the Gulf, killing fish, crabs, clams and shrimp.
The excessive amount of nitrogen in the Gulf was mainly caused by corn and soybean farming, and the overabundance of phosphorous was primarily caused by animal manure on pasture and rangelands, the survey said.
"Conventional thinking has been that the pasture and rangelands don't contribute as much as the cultivated cropland," said Richard Alexander, a research hydrologist and lead investigator on the study. "The thinking has been that the row crops would contribute more phosphorous."
Conventional thinking appears to be wrong, but the economic incentives to the farmers work only one way, the ethanol boondoggle. Zetland again:
[A]gricultural runoff from these states (now running at full steam to grow as muchgovernment pork ecological disasterlife-affirming, lovely ethanol-enhancing corn as possible)
Somehow, "teach a man to fish, and he won't be able to find any" is not the way I remember that old adage. Who could have predicted this? Tom.
Labels: E85, Economics, Energy, environmentalism, externalities
