Environmental and Urban Economics

A Beach Haiku

Environmental and Urban Economics

The Low Tide Beckons No more Economics Talk I will Tweet later

2021 220

Infrastructure Investment Microeconomics

Environmental and Urban Economics

A few thoughts about the pending Infrastructure Bill. What Criteria Will be Used to Allocate the Money? An efficiency criteria would state that it should be allocated to those places and on those projects within such places that offer the greatest economic and quality of life impact. Before we make such irreversible investments, how do we know what these effects will be? Is the public ready for spatial general equilibrium models to guide this prospective work?

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Will the Biden Administration's Trillion Dollar Investment in Infrastructure Unlock the Potential of Post-Industrial Cities?

Environmental and Urban Economics

The Biden Administration is about to enact a new infrastructure law that will spend more than $1 trillion dollars on rebuilding America's infrastructure. Cities such as Baltimore, Cleveland, Detroit and St.

2013 130

Stiglitz Versus Cochrane: What Are the Non-Market Quality of Life Impacts of Climate Change?

Environmental and Urban Economics

John Cochrane recently posted an important blog post sketching out his claim that climate change will only have a small impact on world GNP over the next 75 years. He argues that the trend growth (3% growth for 60 years) will swamp the effect of climate change). As I discuss in my 2010 Climatopolis book, Singapore in recent decades has been highly productive despite the nation's heat and humidity.

Some Microeconomics of Extreme Heat Exposure in the United States

Environmental and Urban Economics

The Biden Administration has made an announcement that it seeks to protect outdoor workers from extreme heat exposure. What does the theory of compensating differentials in real estate markets and labor markets teach us about exposure to high temperatures. I maintain two assumptions. Assumption #1: The apartment rental market is perfectly competitive and an area's heat risk is common knowledge. If heat risk rises in a location, all market bidders are aware of this.

Climate Change Adaptation Lessons from Freezing Texas

Environmental and Urban Economics

This blog post will sketch out some optimistic economics 101 lessons for how to reduce the risk of future Texas power blackouts without building a single new power plant.

Contrasting Adapting to Contagious Disease Risk with Adapting to Climate Change

Environmental and Urban Economics

Bill Gates argues that we were insufficiently prepared for COVID-19. Does our failure to adequately prepare for this crisis portend a future under-investment to invest in self-protection to reduce our exposure to climate change risk? In the case of COVID, we had enjoyed 100 years of little exposure to vast contagion. This certainly played a role in lulling us into a complacent mindset.

What Insights Does Economics Offer About the Nascent Biden Administration Transport Infrastructure Investment Program?

Environmental and Urban Economics

The Washington Post has published a piece stating that the Secretary of Transportation, Peter Buttigieg, is the big winner of the Biden Infrastructure Bill as he will be attending many ribbon cutting ceremonies as grateful local mayors shake his hand. Economic research offers many insights here about the efficiency and equity effects of this multi-billion dollar investment. Point #1: This is an irreversible investment.

2005 100

The Revealed Preference of Porch Pirates

Environmental and Urban Economics

A case study about petty crime. A risk neutral thief will steal if the expected benefits are greater than the expected cost. The expected cost of theft (for those without a guilty conscience) equals the probability of detection multiplied by the $ punishment if caught. The expected benefits depend on what the person steals. What is the resale value of the object? How much does the thief value the object if he doesn't sell it. This background now allows me to tell my story.

Amazon's Big Data on Consumer Behavior Fuels its Entry into Urban Retailing

Environmental and Urban Economics

The Wall Street Journal reports that Amazon is opening retail stores in cities. On one level, this poses a puzzle because Amazon's rise was fueled by its cost savings due to the fact that it is a virtual store. Over the decades, Amazon has assembled a huge database about each of its customers. Such data (and knowing where each of us lives) allows it to make educated predictions about what goods we will want to buy at its retail stores. Amazon will stock their stores with such products.

2015 127

Adverse Selection in Car Insurance Markets: What Happens When Car Sellers Offer Insurance to Good Drivers?

Environmental and Urban Economics

My wife and I own a well known Electric Vehicle that monitors our driving in Southern California. The car company knows how many miles we drive and the car company knows that Dora is a safe driver based on her average speed and the braking she engages in and the fact that she doesn't engage in stop and go driving. While I have a driver's license, I do not drive. Six months ago, I asked Dora; "Why doesn't Tesla sell car insurance?

Incorporating Local Public Health Dynamics into The Rosen/Roback Spatial Equilibrium Model

Environmental and Urban Economics

Imagine if there is an infectious disease that spreads within cities but not across cities. Throughout the COVID crisis, the city specific infection rate has varied across cities at each point in time. In a city facing a rising infection rate, people can adapt by either engaging in costly self protection (self isolating) or through public health interventions such as vaccinating the local population. In this case, public health substitutes for private health protection investments.

Why Climate Economics Continues to Succeed

Environmental and Urban Economics

A blog post that responds to Noah Smith's provocative piece titled Why Has Climate Economics Failed Us? It raises a deep question. What is the point of climate economics research? I will respond below. Dr. Smith's piece also throws some low blows. My friend Richard Tol is singled out for reasons I don't understand. Go to Professor Tol's Google Scholar webpage and read his work. First, a preamble. I am a microeconomist. I do not write down Integrated Assessment Models.

The Economics of Personal Responsibility and Human Development

Environmental and Urban Economics

Congratulations to Nick Kristof of the New York Times. I am really impressed with this discussion between him and Carol in Berkeley. My mother's name is Carol and she has been to Berkeley and I'm wondering if my mom wrote the following response; Here is the NY Times Source and my remarks appear below. By all means, let’s talk about “personal responsibility”’ — Nicholas Kristof Carol in Berkeley, Calif., on “ Who Killed the Knapp Family? ” (Jan.

2020 160

Will the Rise of Work from Home Lower Uber's Medium Term Profits?

Environmental and Urban Economics

Post-pandemic many educated people will be working from home 3 days a week. Some of these people will choose to live further from city centers. How will such "sprawl" and reduced work trips affect the profitability of ride sharing companies? For urban economists to be useful here, we need to make some progress on a few core questions. Does Uber make more money on short urban trips versus picking people up in the far flung suburbs?

2020 159

Some Research Notes on Using Geo-Tagged Cell Phone Data to Study Urban Economics Questions

Environmental and Urban Economics

Several excellent urban economics research teams have access to U.S geocoded cell phone data. Since I am not part of any of these teams, I will use this blog post to offer them some unsolicited advice. For some examples of these teams; skim this and this. Geotagged data provide researchers with a spatial and temporal high frequency database to know where each person spends her day. I carry a cell phone with me 98% of the day when I am awake. This suggests that I am geotagged.

2020 156

Spatial Equilibrium and Haitian Immigration to the U.S

Environmental and Urban Economics

Politico reports on t he policy challenge that the Biden Administration faces. There are thousands of Haitian immigrants living in squalid conditions under the Del Rio International Bridge. A dynamic incentives issue arises. If the Biden Administration engages in humane policies to help these immigrants then this will attract more immigrants to move to the area as they will anticipate that they will be treated well.

How Can the Insurance Industry Accelerate Climate Change Adaptation?

Environmental and Urban Economics

In a series of pieces, I have explored how the for profit insurance industry can accelerate climate change adaptation progress. Here is my recent RMS interview. Here is my 2017 co -authored Harvard Business Review piece. Imagine a free market economy where there is no government regulation of insurance markets and those who seek insurance can contract with for profit insurers. The for profit insurers will do their homework.

Ranking Academic Economics Power Couples Based on July 2021 REPEC Data

Environmental and Urban Economics

A few months ago, I posted a Twitter tweet about how to use REPEC data to rank academic couples. I followed a symmetric transparent method. My criteria takes the REPEC Ranking for one spouse + REPEC ranking for the other spouse. I treat them as equals. If an economist is not married to an economist or if a highly ranked economist is married to another economist who is not ranked on REPEC, then they are not included. I used this list to find th e top ranked women in economics.

2021 109

The Resurgent Consumer City by Fall 2021

Environmental and Urban Economics

I really like Paul Krugma n's NY Times piece from today. It focuses on his predictions about the short term future of cities. Here is a quote from the Nobel Laureate. "So So the best bet is that life and work in, say, 2023 will look a lot like life and work in 2019, but a bit less so.

2021 130

Some Urban and Environmental Economics Links

Environmental and Urban Economics

I have moved my climate change economics blogging over to Substack. In February 2021, we published our urban economics book ; You can read chapter One and watch several relevant urban economic growt h videos posted here.

Some Microeconomics of Adapting to Wildfires in the American West Framed as a Gary Becker Problem Set Question

Environmental and Urban Economics

Consider a University of Chicago Econ 301 homework assignment situated in Summer 2021 in the American West. You own a $500,000 home in a fire zone in the American West. You owe $X on your mortgage. It is common knowledge that your property now faces greater air pollution exposure and a higher probability of burning down. You are not alone. You have Z neighbors who live near you who face the same challenge. You have access to the following adaptation strategies; 1.

Cliff Winston's New Book Gaining Ground

Environmental and Urban Economics

Cliff Winston sent me a copy of his forthcoming book Gaining Ground - -- so I read it. This is an optimistic book that celebrates the constructive role that markets play in improving our quality of life. A theme throughout the book is the synergy between market forces and government activity. Cliff does a great job surveying the recent empirical literature to inform his discussion. Here is an important paragraph that packs in several of his "big ideas" in this U.S focused book.

Unlocking the Potential of Post-Industrial Cities

Environmental and Urban Economics

Mac McComas and I are delighted that our new book Unlocking the Potential of Post-Industrial Cities has now been published by Hopkins University Press. You can order the book here and you can read chapter 1 for free here.

The Revealed Preference Approach for Learning Microeconomics

Environmental and Urban Economics

Applied economists are "detectives". We know that we do not know your preferences. If we could learn about your willingness to pay for market goods such as cell phones or for non-market goods such as clean air and safe streets, then both businesses and governments will demand our services.

Academic Economist Productivity Rankings

Environmental and Urban Economics

Across all of the world's economists; #9 in Environmental Economics #25 in Urban economics #4 in Resource Economics #27 in Energy Economics

2021 100

Some Rust Belt Urban Economics

Environmental and Urban Economics

In this blog post, I want to market my new co-authored book "Unlocking the Potential of Post Industrial Cities". I will do this by talking about past research on the Economics of the Rust Belt. Here is chapter one of my book and here is a r ecent video where I talk about the book.

2006 130

The Emerging New Economic Geography of the United States

Environmental and Urban Economics

Back in 2011, my old friend Enrico Moretti published his important New Geography of Jobs book. You can read a synopsis here. Along with many other urban economic scholars, I am fascinated by how different geographic locations compete for jobs and people. Every geographic location represents a bundle of production possibilities, learning opportunities and quality of life opportunities.

A Few Thoughts About Economic Growth as a Climate Change Adaptation Strategy

Environmental and Urban Economics

John Cochrane has posted an important blog post about adapting to climate change. His piece mainly focuses on macroeconomic issues. For decades, John was colleagues with Bob Lucas and those familiar with Robert Lucas's optimistic work on economic growth will see a correlation. While John makes many points, his main point is; "if a world's economy grows by 3% per year out to the year 2100 it will be rich enough to handle any of Mother Nature's shocks at that point or along the way".

Climate Change Bets and Julian Simon versus Paul Ehrlich Again

Environmental and Urban Economics

A nuanced blog post about the damage that we will suffer because of climate change. Given all of the uncertainty associated with climate change, it is important to distinguish a few dimensions of this uncertainty; #1 Will we face more frequent and more severe weather events going forward in time? I believe that the answer is yes because I believe that global GHG emissions will continue to rise. #2

Free Copies of a New Urban Economics Book: Unlocking the Potential of Post-Industrial Cities

Environmental and Urban Economics

I am delighted to announce that my new book Unlocking the Potential of Post-Industrial Cities has just been published. For those who have an active Twitter account, you can request a free e-book by f illing out the form here. We want to encourage people to read the book and to discuss and debate the book's ideas.

A Self Evaluation of My Two Years Directing the Johns Hopkins 21st Century Cities Initiative

Environmental and Urban Economics

From 2017 to 2019, I served as the Chair of the USC Economics Department. Josh Aizenman served before me and he taught me the ropes. Under Josh's leadership, great things were already taking place at USC Econ and I built on this momentum. Romain Ranciere took over as Chair in Summer 2019 and he has done an outstanding job building up the department's research, teaching and outreach activity. As I look at this faculty roster , I see an emerging top 20 department.

2019 100

How Does Applied Microeconomic Research Accelerate Climate Change Adaptation?

Environmental and Urban Economics

In May 2021, I am quite aware that I am now an "old guy" in the academic economics profession. While this has obvious costs, it offers at least one benefit. I can blog and offer "big thoughts". With that preamble, let's begin. We face a serious climate change adaptation challenge. How does economics research inform our path forward? I encounter such pessimism among the young about their future.

Do The Urban Poor Gain from Local Economic Growth?

Environmental and Urban Economics

I have c o-authored a new book that argues that the answer is "YES" but there are many people who disagree with this claim. At Johns Hopkins University, I taught Urban Economics in Spring 2020. Many of my students were skeptical about the possibility that "gentrification" of cities such as Baltimore would improve the quality of life of local long time residents. I brought in one speaker from the City Government who told my class that she hoped that no billionaires would move to Baltimore.

Unlocking the Potential of our "Unlocking the Potential of Post-Industrial Cities" Book

Environmental and Urban Economics

In February 2021, Johns Hopkins University Press published my new co-authored book Unlocking the Potential of Post-Industrial Cities. Mac McComas and I have written an urban economics book that takes a sober and realistic look at urban economic growth and quality of life in the key center cities of Baltimore, Cleveland, Detroit, Philly, Pittsburgh and St. Louis. Up until now, the book isn't generating much interest.

2021 100

The Microeconomics of Enhancing the Effectiveness of Government Spending $2 Trillion Dollars on Infrastructure

Environmental and Urban Economics

In this blog post, I'd like to sketch out some "rules of the game" to raise the likelihood that Americans will earn a good rate of return on th e $2 Trillion dollars that the Biden Administration has proposed to be spent on infrastructure.

The Great Climate Change Race Between The Rising Threat and Our Increasing Ability to "Take a Punch"

Environmental and Urban Economics

In their important book: The Race Between Education and Technology, Claudia Goldin and Larry Katz use a supply and demand framework to discuss changes in the U.S labor markets over the last 100 years. For decades in the middle of the 20th Century when manufacturing was thriving in the U.S, the wage premium for being highly educated was steady over time and more Americans were graduating from high school and these two facts combined meant that income inequality was declining.

Understanding the High Cost of Military Drone Use Using a Rebound Effect Model

Environmental and Urban Economics

The Economist Magazine's March 13th 2021 issue has a great story about drone use and drone expenditure. The piece starts by talking about Tom Cruise in the movie "Top Gun" and says that manned airplanes are expensive. One justification for substituting such flights and instead using drones is to save costs. Per hour of flying drones are cheaper than manned aircrafts (even if Tom Cruise isn't the pilot!),

2021 100

Backwards Induction and the Demise of U.S Gas Stations in the Year 2045

Environmental and Urban Economics

General Motors has announced that it will only produce electric vehicles starting in the year 2035. Suppose that there no more new fossil fuel vehicles purchased by U.S consumers in the year 2035 and going forward. There are 270 million vehicles in the United States right now and most of them are used. This webpa ge says that 13 million new vehicles are purchased each year in the U.S.

Platform Competition and the Urban Economics of Free Speech

Environmental and Urban Economics

The New York Times has published an important piece on free speech on American University campuses. I'd like to share some thoughts from the perspective of urban economics. Back in 1986, I was living in London because I was a Visiting Student at the London School of Economics. On some weekends, I would go to Hyde Park or Regents Park and there would be a small crowd listening to a charismatic speaker standing on a box and he would be talking about Karl Marx or Ms. Thatcher.