sabato 27 agosto 2016

4 What’s Wrong with the World, Part 2

4 What’s Wrong with the World, Part 2Read more at location 720
Note: 4@@@@@@@@@@@@@@@ ESTERNALITÀ. SORPRESA COASE COASE+PIGOU NN FUNZIONA Edit
The existence of externalities does not necessarily lead to an inefficient result. Pigouvian taxes do not in general lead to the efficient result. Third, and most important, the problem is not really externalities at all. It is transaction costs.Read more at location 735
Note: TESI DI COASE. CONTANO SOLO I COSTI DI TRANSAZIONE Edit
Nothing WorksRead more at location 738
Note: T 3 STEP 1) NULLA FUNZIONA. TUTTO È ESTERNALITÀ 2) TUTTO FUNZIONA. LE ESTERNALITÀ NN PREGIUDICANO L EFFICIENZA 3) CONTANO SOLO I CT Edit
So Coase’s first point is that since external costs are jointly produced by polluter and victim, a legal rule that assigns blame to one of the parties gives the right result only if that party happens to be the one who can avoid the problem at the lower cost.Read more at location 765
Note: UN DANNEGGIATO CHE DANNEGGIA Edit
Everything WorksRead more at location 773
Note: T Edit
The second step in Coase’s argument is to observe that, as long as the parties can readily make and enforce contracts in their mutual interest, neither direct regulation nor a Pigouvian tax is necessary in order to get the efficient outcome. All you need is a clear definition of who has a right to do what, and the market will take care of the problem.Read more at location 774
Note: FA TITTO IL MERCATO Edit
If transaction costs are zero, if, in other words, any agreement that is in the mutual benefit of the parties concerned gets made, then any initial definition of property rights leads to an efficient outcome.Read more at location 787
Note: TEOREMA Edit
We have just restated the simple argument for laissez-faire in a more sophisticated form.Read more at location 790
Note: LAISSEZ FAIRE Edit
It All Depends (On Transaction Costs)Read more at location 795
Note: T Edit
Why, if Coase is correct, do we still have pollution in Los Angeles? One possible answer is that the pollution is efficient, that the damage it does is less than the cost of preventing it. A more plausible answer is that much of the pollution is inefficient, but that the transactions necessary to eliminate it are blocked by prohibitively high transaction costs.Read more at location 796
Note: CITTÀ INQUINATE Edit
With only one landowner there would be no problem; he would offer to pay the mill for the cost of the pollution control equipment plus a little extra to sweeten the deal. But a hundred landowners face what economists call a public good problem.Read more at location 801
Note: FREE RIDE E PUBLIC GOOD Edit
With many millions of people living in southern California, it is hard to imagine any plausible way in which they could voluntarily raise the money to pay all polluters to reduce their pollution.Read more at location 809
Note: INQUINAMENTO Edit
Coase Plus Pigou Is Too Much of a Good ThingRead more at location 819
Note: T Edit
This time we have only one factory and one landowner, so bargaining between them is simple. Pollution does $60,000 worth of damage, pollution control costs $80,000, switching the land use from resorts to timber costs $100,000. The efficient outcome is pollution, since the damage done is less than the cost of avoiding it.Read more at location 820
Note: ESEMPIO Edit
The EPA, having been persuaded of the virtues of Pigouvian taxes, informs the factory that if it pollutes, it must pay for the damage it does—a $60,000 fine. What happens? Controlling the pollution costs more than the fine, so one might expect the factory to pay the fine and continue to pollute, which is the efficient solution. That is the obvious answer, but it is wrong. We have forgotten the landowner. The fine goes to the EPA, not to him, so if the factory pays and pollutes, he suffers $60,000 of uncompensated damage. He can eliminate that damage by offering to pay part of the cost of pollution control, say $30,000. Now, when the factory controls its pollution, it saves a $60,000 fine and receives a $30,000 side payment from the landowner, for a total of $90,000, which is more than the $80,000 cost of pollution control. The result is pollution control that costs more than it is worth.Read more at location 822
Note: PIGOU Edit
Note: INEFFICIENZA! Edit
One solution is to replace administrative law with tort law, converting the fine paid to the EPA into a damage payment to the landowner. Now he is compensated for the damage, so he has no incentive to pay the factory to stop polluting.Read more at location 832
Note: CONVERTIRE LA TASSA IN RISARCIMENTO. MA BASTA MENO. Edit
Coase, Meade, and BeesRead more at location 834
Note: T Edit
Bees graze on the flowers of various crops, so a farmer who grows crops that produce nectar benefits the beekeepers in the area. The farmer receives none of the benefit himself, so has an inefficiently low incentive to grow such crops. Since bees cannot be convinced to respect property rights or keep contracts, there would seem to be no practical way to apply Coase’s approach to the problem. We must either subsidize farmers who grow nectar-rich crops (a negative Pigouvian tax) or accept inefficiency in the joint production of crops and honey. It turns out that it isn’t true. As supporters of Coase have demonstrated, contracts between beekeepers and farmers have been common practice in the industry at least since early in this century.Read more at location 838
Note: API E FLORICULTURA Edit
Note: MEADE CONFUTATO Edit
Coase’s analysis points out fundamental mistakes in the traditional way of thinking about externalities: the failure to recognize the symmetry between “polluter” and “victim” and the failure to allow for private approaches to solving such problems.Read more at location 851
Note: L ERRORE CLASSICO Edit
Pigouvian analysis of the problem is correct, but only under special circumstances, situations in which transaction costs are high, so that transactions between the parties can safely be ignored, and in which the agent deciding which party is to be held liable already knows who the lowest-cost avoider of the problem is. Air pollution in an urban area is an obvious example. Coase provides the more general analysis,Read more at location 854
Note: PIGOU VA COASE Edit
Courts could follow a policy of deciding, in each case, whether plaintiff or defendant was the lowest-cost avoider,Read more at location 858
Note: TRIBUNALE Edit
Alternatively, courts could try to establish general rules for assigning liability, rules that usually assigned liability to the right party. One example of such a general rule is the tort defense of “coming to the nuisance.” Under this doctrine if you build your housing development next to my pig farm, I may be able to avoid liability by arguing that, because I was there first, you were the one responsible for the problem. An economic justification for the doctrine is that it is less expensive to change the location of a development, or a pig farm, before it is built than after,Read more at location 859
Note: REGOLA GENERALE Edit
Coase, Property, and the Economic Analysis of LawRead more at location 887
Note: T Edit
Does the owner have the right to prohibit airplanes from crossing his land a mile up? How about a hundred feet? How about people extracting oil from a mile under the land? What rights does he have against neighbors whose use of their land interferes with his use of his? If he builds his recording studio next to his neighbor’s factory, who is at fault? If he has a right to silence in his recording studio, does that mean that he can forbid the factory from operating or only that he can sue to be reimbursed for his losses?Read more at location 891
Note: PROBLEMI Edit
if right A is of most value to someone who also holds right B, they come in the same bundle. The right to decide what happens two feet above a piece of land is of most value to the person who also holds the right to use the land itself, so it is sensible to include both of them in the bundle of rights we call “ownership of land.” But the right to decide who flies a mile above a piece of land is of no special value to the owner of the land, hence there is no good reason to include it in that bundle.Read more at location 897
Note: PRIMA REGOLA Edit
Many rights are of substantial value to two or more parties; the right to decide whether loud noises are made over a particular piece of property, for example, is of value both to the owner of the property and to his next-door neighbors.Read more at location 903
Note: CASI PROBLEMATICI Edit
In this case the argument underlying the Coase Theorem comes into play. If we assign the right initially to the wrong person, the right person, the one to whom it is of most value, can still buy it from him. So one of the considerations in the initial definition of property rights is doing it in such a way as to minimize the transaction costs associated with fixing, via private contracts, any mistakes in the original assignment.Read more at location 905
Note: SBAGLI? COASE: NN C È PROBLEMA Edit
Economists (and others) tend to jump from the observation that the market sometimes produces an inefficient outcome to the conclusion that, when it does, the government ought to intervene to fix the problem. Part of what Coase showed was that there may be no legal rule, no form of regulation, that will generate a fully efficient solution, the solution that would be imposed by an all powerful and all knowing dictator whose only objective was economic efficiency. He thus anticipated public choice economists such as James Buchanan (another Nobel winner) in arguing that the choice was not between an inefficient solution generated by the market and an efficient solution imposed by the government but rather among a variety of inefficient alternatives, private and governmental.Read more at location 921
Note: FALLIMENTI Edit
He further argued that the distinction between market solutions and government solutions was itself in part artificial, since any market solution depended on a particular set of legal rules established by the legislature and the courts.Read more at location 928
Note: GOVRRNO/MERCATO. FALSA DICOTOMIA Edit
He based his argument on real cases in the common law of nuisance—a Florida case where one landowner’s building shaded an adjacent hotel’s swimming pool, a British case where a physician built a new consulting room at the edge of his property adjacent to a neighboring candy factory and then demanded that the candy factory shut down machinery whose vibrations were making it hard to use his consulting room, and many others.Read more at location 931
Note: COASE. CASI CONCRETI Edit