Environmental Economics

Chiroptologist: Pronounced 'Creepy'

...bats in the U.S. are in serious trouble, thanks largely to a catastrophic disease called white-nose syndrome (WNS). Named for a white fungus that appears on the muzzle and other body parts of hibernating bats, WNS has killed at least one million bats, mostly in the northeast, and death rates among some affected winter colonies can be as high as 70%...

You might say: so what? Other than chiroptologists—yes, people who study bats—would anyone miss them when they're gone? As it turns out, all of us would—at least if you like food. A new article in Science shows that bats have an important role to play in agriculture—one worth at least $3.7 billion a year, if not far more. That's how much the extinction of bats throughout North America could cost the region's food system, according to an analysis (access PDF here) by a group of researchers led by Justin Boyles of the University of Pretoria in South Africa. The logic is simple: bats eat bugs—tons and tons of bugs—and that includes crop and forests pests. (A single colony of 150 brown bats in Indianan has been estimated to eat nearly 1.3 million pest insects a year.) Remove the bats, and you remove one of nature's most effective biological pesticides—which would have to be replaced by actual pesticides, at an economic and environmental expense. (More on Time.com: See the top 10 strange mass animal deaths)

It's not just WNS that is striking down bats. Wind turbines are apparently killing migratory bats as well—by 2020, an estimated 33,000 to 111,000 bats are predicted to be killed by turbines in the mid-Atlantic Highlands alone. The authors in the Science paper worry that as wind power ramps up in the U.S., more bats will end up pureed by the blades. But WNS seems like the more immediate threat. But it's still a mystery how WNS spread, and how to stop it—those the U.S. Fish and Wildlife Service, among other government agencies, is on the case. We may not like bats—but we definitely need them.

via ecocentric.blogs.time.com

Live Weather Cam in Boone, NC

Click the image to check out the weather in Boone.

Knowledge Problem on gender and economics blogging

I told Lynne in November that I'd like to read more cycling posts:

So perhaps it’s not just the division of labor in the household, but perhaps there’s a gender difference in terms of breadth and variety of interests, and interest in focusing intently on one thing or very few things. I spend a lot of time and energy on things that I don’t think would be interesting to KP readers; in fact, back in 2005 I distinctly remember posting a few times about cycling, running, triathlon race results, and I got an email from a reader basically saying that I should stick to economics because he wasn’t interested in reading about my sports. Fair enough. But with RSS readers, it’s easy to skip those. Still, I’ve really backed off writing here about the non-economics topics that captivate me.

Which brings up another hypothesis tangentially related to the one that Diane offered: perhaps women are more “self-censoring” than men. After receiving that feedback, I really dialed in my self-censoring, asking myself every time I read something or thought about posting something “do I have something original to add to the conversation, to economic knowledge, on this item?” Frankly, a lot of the time over the past couple of years my answer to that question has been NO, not that I’m judging myself as a non-”excellent” economist because of that. So much of the online conversation over the past couple of years has dealt with macro, finance, monetary policy, all of which are topics in which I profess no special expertise. Does that filtering and self-censoring kick in more readily for women than men? Perhaps. In my case it’s because my time is so scarce and has such a high opportunity cost — if I’m just going to write something in which I blather on a topic about which I have little expertise, I’d rather spend that time on my bike.

And env-econ is evidence that males don't self-censor. Whenever someone tells me to stick to the environmental economics I say "what? this is my blog!" and start working on my next stupid personal or sports post. Until we're picked up by the New York Times to blog alongside Krugs we'll do what we want.

Fascinated with our new webcams

Another one for John's classics shelf

Look what I got in the mail this morning.  Click the link to the left to buy a copy and help feed our children.

Life satisfaction vs contingent valuation

Daniel Hamersmesh:

Even with concepts that seem totally non-economic, market forces are crucial.  In a new paper, “Beauty Is the Promise of Happiness?”, using data from the U.S., Canada, Germany, and the U.K., my colleague Jason Abrevaya and I show that better-looking people are happier.  At least half of the impact arises because better-looking people earn more and obtain spouses who earn more.  These are market effects. The total effect of good looks is about the same for men and women; but more of the impact of beauty on happiness among men works through markets, while among women the direct effect — being good-looking per se makes women happier — is more important.

The economics profession seems keen to allow that measures of utility from life satisfaction or happiness studies are valid alternative measures of social welfare (in addition to GDP). I think this is a good idea too, simply because additional measurements that are highly correlated lend confidence to the accuracy of both measures. 

What I don't understand is the hesitation to consider contingent valuation or contingent behavior in the same way. It is rare to wander outside the field of environmental economics (and sometimes wandering around within the field) and not have someone questions your methods. The author above did this in an association lecture at the Southern Economic Association meetings a few years ago. Do happiness researchers catch the same grief?

Bruce Johnson, Brad Humphries, Dan Mason and myself are conducting a study of the Vancouver Winter Olympics. We thought it would be neat to compare willingness-to-pay derived from contingent valuation with that derived from life satisfaction questions. We have been disappointed. While the contingent valuation data passes the usual validity and reliability tests the life satisfaction data is a mess. The willingness-to-pay estimates from the life satisfaction data are unrealistic. Needless to say, that comparison paper is DOA and I'm highly skeptical of life satisfaction / happiness studies due to my own experience, not because of a revealed preference mindset.

A lesson in mutually beneficial free trade

Lynne Kiesling:

I am listening to an NPR story right now on the conflicts over the construction of the new pipeline to bring Canadian heavy crude oil from the tar sands to the US. Steve Inskeep introduced the story by observing that as Canadian tar sands production increases, US consumers will “become more dependent on Canada”.

This error is more than just a rhetorical one; it’s an error of logic and a failure of basic economic understanding, because it shows that Inskeep and his staff don’t grasp the reciprocity and the mutuality of trade and exchange. You could just as easily say that more oil transactions between US consumers and Canadian producers makes Canada “more dependent on the US”, because the revenue they earn from selling us oil is income that they use to do what they want to do in their lives, in much the same way that the oil we buy from them is a product that we use to do what we want to do in our lives.

Failing to incorporate the reciprocity and mutuality of exchange into your analysis is an all-too-common logical flaw, particularly in the increasingly breathy and Chicken Little media. They should know better.

The Dukes... ruined my life... over a bet? For how much?

A dollar. Steve Rushin:

But in sports, morality and neutrality are uncoupled. With certain exceptions: It was difficult for most Americans to remain neutral during last year's Butler vs. Duke NCAA final, which smacked -- in a purely basketball context -- of oppressed vs. oppressor. Indeed, that was the entire plot of Trading Places, a morality tale pitting one butler against two Dukes. The audience, naturally, rooted for the butler.

via sportsillustrated.cnn.com

I get the joke, but it was more than one butler against two Dukes. That summary leaves out (in alphabetical order) Dan Ackroyd, Jamie Lee Curtis and Eddie Murphy. How could you do that without a footnote?

I've been reading the crappy female economist blogs*

From climate adaptation to gender, Matt keeps stepping in it!

Diane Lim Rogers:

A friend of mine sent me a link to Matthew Kahn’s latest guest blog post on the Christian Science Monitor website; she sent it along with an “I believe in you” sort of note, because as Matthew was implicitly pointing out, I am not on the list of top economists to which he refers–while he is (as he explicitly points out).  He ponders (emphasis added):

REPEC provides an objective measure of who is “Royalty” in the economics profession. The current list of the top 5% is here. I am ranked #681 out of 27,365 economists so that’s not bad (and my 3 books aren’t counted here). But, here is the interesting part. There are 52 women who rank in the top 1000 and 0 of them blog. Contrast that with the men. Consider the top 100 men. In this elite subset; at least 8 of them blog. Consider the men ranked between 101 and 200. At least, six of them blog. So, this isn’t very scientific but we see a 7% participation rate for excellent male economists and a 0% participation rate for excellent women. This differential looks statistically significant to me. I have searched for Nancy Folbre among the top 1369 economists (the 5% cutoff) and she is not counted in the elite subset.

Not being a female economist himself, Matthew then theorizes–as men love to do–about why we women aren’t as able to be both “excellent” economists and blogging economists.

I find it ironic that Matthew’s blog post would appear on the Christian Science Monitor site in the same area that my guest blog posts do, and that the photo that goes with the CSM post is of…an Asian woman!  (Ok, a much younger Asian woman, but Asian nonetheless.)  Huh!  There’s a female economist blogger blogging right “next” to Matthew, right under his nose!

Oh, but I’m not an “excellent” female economist. ...

Keep reading ... and also check out what Jodi Beggs has to say.

Update: here is the comment I left at EDITM:

Some of my favorite bloggers are Jodi Beggs, Diane and Lynne Kiesling: http://knowledgeproblem.com/. Some  (all?) of my least favorite are those in the RePEc rankings (but I like Matt's blog). I'm not sure why there should be any correlation between RePEc rankings,  gender (other than the point made by Jodi above) and good economics blog posts. As evidence, see the Taylor, Mankiw, Thoma and Krugman interaction from today. Jeez.

*Joke!

Water closet

The best idea everyone hates (i.e., a higher tax on gasoline):

TODAY, Barack Obama unveiled the latest set of presidential proposals for reducing oil imports, strengthening the economy, and cutting emissions. Nearly everything he proposed is old hash; American leaders have been dutifully acting out this bit of theatre since the Nixon administration.

And as my colleague at Democracy in America points out, even if Mr Obama were serious about pressing for these policies, he'd face significant opposition in Congress:

Worse, those parts of the president’s plan that need congressional approval—the clean energy standard, more subsidies, extra funding for research on whizz-bang energy technology—will never receive it. The Republicans who control the House are dead-set against anything that smacks of greenery, not to mention anything that would add to spending at a time when they’re trying to take an axe to it.

Nominally, at least, both parties care about oil imports and both parties care about the deficit. They don't necessarily behave as if they care, but they say they care. Can Congress address these priorities without explicitly doing anything that's either 1) green or which 2) requires new spending?

Sure, Congress can raise the petrol tax. Just as a reminder, the chairmen of the bipartisan Simpson-Bowles deficit commission  recommended that the petrol tax be increased by 15 cents per gallon beginning in 2013. For perspective: average retail petrol prices in America rose by more than that in the month of March. A higher tax rate would discourage consumption while raising money that could be used for whatever Congress wanted, including deficit reduction.

The idea isn't popular, but it makes a great deal of sense.

Twin towers

The department of economics has been so successful at recruiting majors that we want to double the number of students that are forced to major in economics

Lobbying for subsidies creates bizzarre logic and here is an example (www.newsobserver.com):

Solar energy is proving so successful in North Carolina that industry advocates want to double the amount of sun-powered electricity that is required by state law.

A bill introduced Monday in the General Assembly would raise North Carolina's solar energy requirement to 0.4 percent of all retail electricity sold by electric utilities by 2018. The current requirement, set by the state's sweeping 2007 green energy law, is 0.2 percent. ...

If the mandate is not increased, solar advocates fear, Duke Energy and Progress Energy are likely to stop at their 0.2 percent requirement, rather than continue buying one of the most expensive forms of green energy. ...

In other words, if a firm is not forced to purchase an input that doesn't minimize costs then it will not purchase them. In my mind a successful industry is producing a product that people WANT to buy. So, how is the solar industry successful?

The solar bill's sponsors are mostly Republicans in the state House: Tom Murry of Wake County, Ruth Samuelson of Mecklenburg County, Chuck McGrady of Henderson County and Tim Moffitt of Buncombe County. The lone Democratic sponsor is James Crawford Jr. of Granville and Vance counties.

Murry's primary interest is job creation, not alternative energy. Southern Energy Management is in his district, and solar advocates had briefed him on the industry's creation of nearly 2,000 jobs in manufacturing, maintenance and installation by about 170 companies to date.

The N.C. Sustainable Energy Association estimates that boosting the solar mandate will result in the creation of 6,000 jobs.

As always, I'd rather we consider success in the economically appropriate manner (i.e., margin). In this case that margin is whether the true benefits of the increase in solar power exceed the true costs. The benefits are the improved health, visibility and recreation that results from improved air quality. The costs are the increased costs of production from the more expensive renewable sources. Increased jobs are part of the cost equation, not evidence that the solar industry is successful.

I hope no one asks for my e-mails that mention "Dan Patrick"

I took a risk, clicked on a NYTimes article and was relieved to find that it is still free (www.nytimes.com):

A conservative research group in Michigan has issued a far-reaching public records request to the labor studies departments at three public universities in the state, seeking any e-mails involving the Wisconsin labor turmoil.

The group, the Mackinac Center for Public Policy, declined to explain why it was making the Freedom of Information Act request for material from professors at the University of Michigan, Michigan State and Wayne State University. But several professors who received the records request, which was first reported by Talking Points Memo on Tuesday, said it appeared to be an attempt to intimidate or embarrass professors who are sympathetic to organized labor.

This records request, which was filed Friday, comes several days after the Republican Party of Wisconsin made a records request to a prominent University of Wisconsin history professor, William Cronon, who had severely criticized the state’s Republican governor, Scott Walker, over his push for legislation to weaken public-sector unions.

The Mackinac Center, which describes itself as a nonpartisan research and educational institution and receives money from numerous conservative foundations, asked the three universities’ labor studies faculty members for any e-mails mentioning “Scott Walker,” “Madison,” “Wisconsin” or “Rachel Maddow,” the liberal talk show host on MSNBC.

But seriously, should I forward all of my *.edu email to gmail? Is Google trying to grab market share by conspiring with the nonpartisan research and educational institutions?

An all-too-frequent off-topic post

Sorry, proud Dad moment.  Official oldest daughter of Env-Econ (OODEE) played her first HS softball game yesterday (freshman on Varsity).  She pitched two innings in relief, after a strong outing from the starter.  Came in in the 6th inning down 2-1.  Faced 7 batters, struck out 4 and gave up one hit (a bunt).  OODEE came to the plate in the bottom of the 7th (last inning in softball) with the bases loaded, one out, tie score.  Lined a shot off the pitcher's ribs (or knee, depending on who you ask) that ended up in shallow right field.  Winning run scored.  Nothing like a pitcher helping herself at the plate.

Here's the box score from the Columbus Dispatch.

Franklin Heights 010 010 0 — 2 6 1
Dublin Jerome 010 000 2 — 3 9 1
Siemer and Edwards; Ciminillo, Haab (6) and Hirth. W: Haab.

Now back to some relevant content...

Another Daily Demand and Supply

The water department in one of Ohio's largest metropolitan areas is seeking to sharply increase rates to deal with a drop in consumption and revenue.

Officials in Cleveland want to raise rates by more than 80 percent for city residents over the next four years and by about 50 percent in the suburbs. The city water department serves 1.5 million customers.

via www.dispatch.com

Apparently Cleveland is counting on the demand for water being inelastic. The only way to increase revenues through price increases is for the quantity demanded to fall by less than the price increase (with both measured in percentage terms).

Daily demand and supply

The New York Times began charging online readers Monday for full access to its website and dangled a heavily discounted introductory offer intended to lure its first digital subscribers.

The Times is offering its three digital subscription plans for the same price of 99 cents for the first four weeks.

After that, unlimited access to NYTimes.com and the newspaper's smartphone application will cost $15 for four weeks while full access to the website and a tablet computer application will cost $20 for four weeks.

Full access to NYTimes.com and both smartphone and tablet applications will be $35 for four weeks.

via www.google.com

I predict the New York times is about to lose some online readers, but revenues will increase.

Starting at a price of zero maximizes the number of readers but minimizes revenues (TR=PQ). As P goes up, Q goes down (law of demand). Initially revenues will rise. The trick is to choose the right price to maximize revenues (assuming that's the goal), because if the price rises too far, the loss in site readers will overpower the increased price per retained reader.

Unless, of course, demand is perfectly elastic (horizontal) in which case any price increase will result in readership falling to zero and revenues stay the same as now ($0).

Don't hold back, tell us what you really think

Hugh Bladon, a spokesman for the Association of British Drivers, on Siim Kallis', the European Transport Commissioner, proposal to ban all cars in EU cities by 2050 through a series of EU directives and higher fuel taxes:

"I suggest that he goes and finds himself a space in the local mental asylum. If he wants to bring everywhere to a grinding halt and to plunge us into a new dark age, he is on the right track. We have to keep things moving. The man is off his rocker."

via www.telegraph.co.uk

Republicans for Environmental Progress: An Endangered Species

For most of modern American history, the two major political parties in America have largely agreed on the desired long-term environmental outcomes for the country: there was a consensus among Republicans and Democrats that it was a good thing to press for cleaner air and water, less toxins in the environment, biodiversity preservation, and mitigation strategies for clean energy and, mostly recently, climate change.

And just think of all the jobs it will create

As villages and cities across Ohio prepare to send out their street sweepers this spring, state environmental officials are considering a proposal that would let them recycle the debris.

The Ohio Environmental Protection Agency said the sweepings could be used to help build or repair roads and medians or even be mixed with salt to help keep cars from sliding off icy highways during winter.

The idea, the agency said, could save money in dumping fees and keep thousands of tons of debris out of landfills.

Cities would have to remove all the twigs, cigarette butts, crushed cans and other trash that street sweepers routinely vacuum up. And cities would have to run tests to make sure there are no hazardous concentrations of metals or other pollutants.

via www.dispatch.com

According to the article, it only costs $40 per ton to dump the sweepings in the landfill.  Based on a quick Google search, the estimated external costs of a ton of stuff dumped in a landfill is somewhere betwixt $3 and $80.  Any idea of the costs/benefits of not dumping?

Quote of the Day

“The barriers to a 100 percent conversion to wind, water and solar power worldwide are primarily social and political, not technological or even economic.”

via economix.blogs.nytimes.com