4 Crosstown Traffic
Note:traffico: dove il mercato manca o è imperfetto
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why did I spend two hours stuck in traffic on the way to work this morning?
Note:PROBLEMI QUOTIDIANI DI UN MONDO SENZA MERCATI
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The obvious answer is that, of course, there is no market perfect
Note:CHIARO
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because perfect markets provide such a clear benchmark, economists find it much easier to start from them
Note:METODO DI LAVORO X RISOLVERE I PROBLEMI
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What’s wrong with my world
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Markets fail to work well in the face of scarcity power,
Note:I DIFETTI DEL MERCATO... MONOPOLIO... PRIMO
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market is dominated by a single company, Microsoft,
Note:ES NEL SOFTWARE
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lack information.
Note:SECONDO
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I would leave my doctor’s surgery with no idea whether he had given me good treatment,
Note:ESEMPIO DI ASIMMETRIA
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if some people make decisions that affect bystanders:
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TERZO ESYERNALITÀ...CE NE OCCUPEREMO QUI
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‘market failures’:
Note:I TRE GRANDI PROBLEMI
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How drivers affect bystanders
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London’s current air pollution is not as severe as the ‘Great Stink’ of the 1850s,
Note:AMMETIAMOLO
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Around seven thousand people a year die prematurely because of traffic pollution in Britain,
Note:VITTIME
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the cost of delays from congestion are even worse,
Note:MA C È DI PIÙ
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Then there is the noise, the accidents and the ‘barrier effect’,
Note:ALTRO
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Different kinds of prices: marginal and average
Note:Ttttttttttt
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paid a sizeable annual tax called ‘Vehicle Excise Duty’.
Note:L USO DELL AUTO NN È GRATIS
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Petrol and diesel are also taxed
Note:ALTRI ADDEBITI ALL AUTOMOBILISTA
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Britain, drivers pay over £30 billion in taxes on cars
Note:NEL COMPLESSO
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To ask ‘have they paid enough?’ is to ask the wrong question. The right question is, ‘are they paying for the right things?’ The answer is no.
Note:LA DOMANDA GIUSTA
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The average price that a driver pays for a journey across a city is quite high if the driver is paying an annual licence fee.
Note:CI SONO DUE PREZZI...ECCO IL PRIMO
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the price that the driver pays for one extra trip across the city is low:
Note:SECONDO
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Once you’ve paid for the right to take the car on the street in the first place, you don’t get a discount for low mileage:
Note:IN SINTESI
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When I was in college, clubs and societies used to have big parties where some people didn’t drink at all and, less surprisingly, most people drank far too much. This was because there were two types of ticket. ‘Alcoholic’ tickets allowed unlimited boozing after payment of an up-front fee of, say, £10. The other type of ticket was a lot cheaper, and you had to drink rancid orange juice instead and stand in a corner while the drinkers got more and more obnoxious. Turning up and having a couple of beers was a pretty expensive proposition,
Note:BUFFET E PREZZO MEDIO
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IL PROB DELLE FESTE
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(a) raising the up-front fee for drinking?, (b) buying better orange juice? or (c) scrapping the up-front fee and charging people for what they drank?
Note:LE TRE SOLUZIONI
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(a) raise the upfront fee for driving; (b) supply better ‘orange juice’ (more buses, better trains, cycle routes, pedestrian crossings); or (c) scrap the up-front fee and charge people for the trips they drive.
Note:LE TRE SOLUZIONI NEL CASO DEL TRAFFICO
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Pricing should reflect the damage
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In most European countries, drivers do pay a tax per mile in the form of a high tax on fuel.
Note:STIAMO SEMPLIFICANDO
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but it is the commuters in the London, New York or Paris rush hours who are causing the most serious congestion,
Note:NN TUTTE LE BENZINE SONO UGUALI
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The trick is to mimic perfect markets by getting drivers to pay all of the costs of their actions:
Note:LA SOLUZIONE
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Two objections to externality charges
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the pro-car lobby argues that drivers pay enough,
Note:PRIMA CONTESTAZIONE
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the rich will still be able to do whatever it was that was objectionable.
Note:ALTRA OBIEZIONE
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it is just as true that the rich can afford to eat more than the poor.
Note:NATURAL
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if you accept the workings of the price system for typical goods like food, why not road space or clean air?
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in the United Kingdom, poor people do not drive – they bicycle, walk or take the bus.
Note:REDISTRIB IN SENSO GIUSTO
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in the United States, where the poor still drive a lot
Note:PURTROPPO
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externality charges can be designed not to redistribute very much.
Note:TENERE CONTO DEL VEICOLO
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they feel that pollution should simply be illegal, rather than illegal for the poor
Note:CERTI AMBIENTALISTI
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A partial response is to say that even the rich do not pollute for fun.
Note:PRIMA RISPOSTA
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A congestion charge can be set at £1 a day, or £10 a day or £1000 a day.
Note:SECONDA RISPOSTA
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government could give everybody vouchers, which allow them to drive up to twenty miles per week. The immediate result of such a plan is that some people, mostly poor, would want to sell their vouchers to others, mostly rich:
Note:I VOUCHER NN AFFRONTANO LA CRITICA
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Other alternatives such as high parking charges are probably less efficient still,
Note:ALTERNATIVE INEFFICIENTI
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the relationship between driving and parking is rather indirect.
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How much is your life worth?
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the level of any externality charge is bound to be a matter for controversy.
Note:IL PROBLEMA CANONICO
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a different charge, which would be imposed for every trip,
Note:NECESSARIO
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That sounds complicated.
Note:Ccccc SUV...VEICOLI PESANTI...VEICOLI INQUINANTI...INQ LOCALE..GW...
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imagine each car having a little computer
Note:SOLUZIONE SCATOLA NERA
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But there is another difficulty: working out what the costs of the externalities really are.
Note:QUI SÌ CHE COMINCIANO LE DIFFICOLTÀ
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Every policy the government adopts, and every individual choice you make, implies that a valuation has been made,
Note: È DA Invece USI PENSARE DI SCAMPARE A QS PROBLEMI
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If you pay more to avoid a noisy area when you rent a flat or a hotel room,
Note:ES
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Should the government install extra street signs and markings, or spend more money on speed cameras,
Note:ALTRO ES
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Economists have a theory of ‘revealed preference’,
Note:LA COSA MIGLIORE È GUARDARE AI COMP REALI
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House prices contain embedded information about the value people place on all kinds of amenities: shops, greenery, low crime, quiet, the sun through the window in the morning and so on.
Note:FONTI INCORPORATE
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wages can reveal information if there is a salary differential for jobs with very similar skill requirements but different levels of danger.
Note:ALTRA FONTE
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Two different gaps in our knowledge
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we also do not know the cheapest way of reducing noise, accidents, pollution and congestion. It is with this second gap that externality pricing comes into its own.
Note:L IGNORANZA CHE LA TASSA PREZZO PRENDE DI PETTO...IL VERO VANTAGGIO DELLA SOLUZIONE PIGOU
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The New Orleans effect
Note:Ttttttttttttttt
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dingy houses in response to the policy, in force from 1696 to 1851, of taxing people according to the number of windows their homes had.
Note:LE CASE DELLA PERIFERIA INGLESE
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Congestion charging can change the small decisions we make every week about whether to drive to a supermarket, or catch the bus, or walk to a local store or buy food on the internet.
Note:LA TASSA LAVORA SUL PICCOLO E SI ESPANDE
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There’s also a domino effect here, as changes in behaviour reinforce each other.
Note:CONTAGIO
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If more people try to save the congestion charge by working at home a couple of days a week or commuting at a different time of day, more companies will find ways of accommodating them.
Note:ESEMPIO
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The attractive thing about externality pricing is that it attacks the problem but makes no assumption about the solution.
Note:IL BELLO È CHE NOI NN CONOSCIAMO LA SOLUZIONE
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After a year, car journeys fell by nearly a third.
Note:2003 LONDON INTRODUCE LA TASA...REAZIONE VELOCE
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Battling pollution on the cheap
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In the 1990s the Environmental Protection Agency (EPA) in the United States discovered how cost-effectively an externality charge could fight pollution when it decided to attack acid rain.
Note:UN ESPERIENZA POSITIVA...INQUINAMENTO DA SOLFURI
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They set up an auction for the right to emit sulphur dioxide, which causes acid rain. Polluters were given a quota
Note:ASTA X CAPIRE IL VALORE
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When the EPA simply tried to tell them to install sulphur scrubbers, the power generators argued that it would be very expensive to do so,
Note:DICEVANO PLA VERITÀ
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The regulators discovered that getting rid of sulphur dioxide was so cheap that few people were willing to pay much for the right to
Note:LA SCOPERTA GRAZIE ALLE ASTE
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There is massive controversy about how much emission reduction will cost, but an auction of permits to extract oil, coal and gas would soon start to tell us.
Note:PARALLELO
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many economists believe that, like sulphur permits in California, the carbon permits would quickly reveal that decarbonisation is cheaper than we expected,
Note:PRONOSTICI
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Is the environment too important to be a moral issue?
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‘How did you travel here today? We need to know for our carbon offset programme.’
Note:UNA QUESTIONE MORALE O PRAGMATICA?
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Why would an environmental charity organise a carbon-neutral meeting?
Note:CHE C ENTRANO LORO?
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In other words, why be ‘carbon-neutral’ when you can be ‘carbon-optimal’,
Note:IL QUESITO DELL ECONOMISTA
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An unkind view would be that it was indulging in moral posturing.
Note:VANITÀ?
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an environmental charity can be directly connected to the fact that public policies do not make evident the environmental costs of our actions.
Note:UN IPOTESI
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Which is worse: disposable nappies (which clog up landfill sites) or washable nappies (where the washing process uses electricity and releases polluting detergents)?
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COL MORALISMO CI SI FICCA FIOCA N UN GINEPRAIO
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Electricity generation that contributed to climate change would be taxed, too, which would raise electricity prices unless we could develop cleaner fuels.
Note:FORSE È UNA QS REDISTRIBUTIVA
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Being positive
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If Belinda opens an attractive pavement café, the streets are more pleasant to walk along,
Note:ESTERNALITÀ POSITIVE
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Just as negative externalities will tend to lead to too much pollution or congestion, positive externalities will leave us undervaccinated with scruffy neighbours and a dearth of pleasant cafés.
Note:BELINDA FALLISCE
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instead of an externality charge, an externality subsidy.
Note:SOLUZIONE SIMMETRICA
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Vaccinations, for example, are often subsidised by governments or by aid agencies; scientific research, too, usually gets a big dose of government funding.
Note:ESEMPI
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Too much of a good thing? Solving externalities without the government
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I may complain about my neighbour’s tree damaging my wall, but if it really bothers me I can pay him to let me cut it down.
Note:COASE
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Externalities simply aren’t externalities if people can easily get together and negotiate.
Note:TRANSAZIONI
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the positive externality has been dealt with twice over, once by a government subsidy and once by a process of bargaining.
Note:UN PROBLEMA
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If the government taxes my neighbour’s dirty petrol-driven lawnmower and I also offer to pay him to get rid of it because I dislike the noise and smell, the combination of the taxes and my own offer may persuade him to ditch the monster, even though the fun and convenience he gets from the thing outweigh any damage to anybody else and he really should be keeping it.
Note:UN CASO
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Government-imposed externality charging is far more likely to be appropriate in situations where a negotiation over the externality will not work, as in the case of the noise from low-flying aircraft.
Note:QUANDO DEVE INTERVENIRE IL GOVERNO
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Epilogue: what is economics really about?
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A pollution tax might well make a number like GDP smaller. But who cares? Certainly not economists. We know that GDP measures lots of things that are harmful (sales of weapons, shoddy building
Note:CHI SI LAMENTA DELLE TASSE
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Most economics has very little to do with GDP. Economics is about who gets what and why.
PESANTE!!!!