ABSTRACT This is the introductory chapter to Environmental Economics: An Integrated Approach. Whi... more ABSTRACT This is the introductory chapter to Environmental Economics: An Integrated Approach. While brief, it explains the economist's approach to environmental economics and characterizes the nature of the goods humans care about, introducing Chapters 2 and Chapters 3 which follow. It is seen here that excludability is critical to the functioning of ordinary markets, with non-excludability being the reason for the many environmental problems we observe.
The production possibility frontier (PPF) is a workhorse of economics principles texts, providing... more The production possibility frontier (PPF) is a workhorse of economics principles texts, providing useful insights. However, its assumption of a given amount of labor can confuse students, who know that their willingness to supply labor is a variable, not given. That is, some will realize that there are actually many potential guns-butter trade-offs, one for each level of leisure chosen. That unexamined issue can undermine student buy-in to the concepts, and with it, the usefulness of the PPF and economic tools related to it and its “fixed amount of resources” assumption, such as the supply curves of microeconomics and the long-run aggregate supply curve of macroeconomics. However, that difficulty can be addressed using a two-step PPF presentation, which considers the simultaneous goods-leisure decision and the guns-butter possibilities consistent with it. It clarifies the analysis, as well as offering several benefits for economic instruction. JEL Classifications: A20, A22
... 220 The Robustness of Hedonic Price Estimation: Urban Air Quality Phil Graves, James С Murdoc... more ... 220 The Robustness of Hedonic Price Estimation: Urban Air Quality Phil Graves, James С Murdoch, Mark A. Thayer, and Don Waldman ... uncertainty caused by collinearity is small for structural attributes (eg floor space, age, and lot size) but sub-stantial for neighbourhood ...
The B.E. Journal of Economic Analysis & Policy, 2009
For at least fifty years economists have argued that vertically-aggregated marginal willingness t... more For at least fifty years economists have argued that vertically-aggregated marginal willingness to pay, when set equal to marginal provision cost, will result in optimal public good provision levels. This methodological approach would be expected to yield an exact analog, in terms of optimal levels of public good provision, to efficient provision of private goods in a perfect market setting. There is, however, a potentially serious flaw in the approach as actually practiced, since initial incomes are implicitlyand wronglytaken to be optimal. From a given income, the output demand revelation problem has long been recognizedthat there will be difficulty inferring true demands for public goods at that income (the traditional `free rider' problem). But what has failed to receive widespread recognition among theoreticians, and especially among practitioners, is that there will also be a concomitant `input demand revelation' problem. In any situation where workers cannot indivi...
ABSTRACT This is the introductory chapter to Environmental Economics: An Integrated Approach. Whi... more ABSTRACT This is the introductory chapter to Environmental Economics: An Integrated Approach. While brief, it explains the economist's approach to environmental economics and characterizes the nature of the goods humans care about, introducing Chapters 2 and Chapters 3 which follow. It is seen here that excludability is critical to the functioning of ordinary markets, with non-excludability being the reason for the many environmental problems we observe.
The production possibility frontier (PPF) is a workhorse of economics principles texts, providing... more The production possibility frontier (PPF) is a workhorse of economics principles texts, providing useful insights. However, its assumption of a given amount of labor can confuse students, who know that their willingness to supply labor is a variable, not given. That is, some will realize that there are actually many potential guns-butter trade-offs, one for each level of leisure chosen. That unexamined issue can undermine student buy-in to the concepts, and with it, the usefulness of the PPF and economic tools related to it and its “fixed amount of resources” assumption, such as the supply curves of microeconomics and the long-run aggregate supply curve of macroeconomics. However, that difficulty can be addressed using a two-step PPF presentation, which considers the simultaneous goods-leisure decision and the guns-butter possibilities consistent with it. It clarifies the analysis, as well as offering several benefits for economic instruction. JEL Classifications: A20, A22
... 220 The Robustness of Hedonic Price Estimation: Urban Air Quality Phil Graves, James С Murdoc... more ... 220 The Robustness of Hedonic Price Estimation: Urban Air Quality Phil Graves, James С Murdoch, Mark A. Thayer, and Don Waldman ... uncertainty caused by collinearity is small for structural attributes (eg floor space, age, and lot size) but sub-stantial for neighbourhood ...
The B.E. Journal of Economic Analysis & Policy, 2009
For at least fifty years economists have argued that vertically-aggregated marginal willingness t... more For at least fifty years economists have argued that vertically-aggregated marginal willingness to pay, when set equal to marginal provision cost, will result in optimal public good provision levels. This methodological approach would be expected to yield an exact analog, in terms of optimal levels of public good provision, to efficient provision of private goods in a perfect market setting. There is, however, a potentially serious flaw in the approach as actually practiced, since initial incomes are implicitlyand wronglytaken to be optimal. From a given income, the output demand revelation problem has long been recognizedthat there will be difficulty inferring true demands for public goods at that income (the traditional `free rider' problem). But what has failed to receive widespread recognition among theoreticians, and especially among practitioners, is that there will also be a concomitant `input demand revelation' problem. In any situation where workers cannot indivi...
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