Friday, August 30, 2013

Should our tax dollars be used for this?

Valuing the economic value of sound in national parks

"Currently, the NPS has no information about the value that visitors hold for preserving natural sound conditions in national parks," the agency said in an Aug. 9 Federal Register notice. "Nor does NPS have any information of how human-caused sound conditions affect the likelihood of visitation to national parks."
While the survey is not set to begin until 2015, the agency next year hopes to conduct focus groups that will help test the questions that will be used in the national survey.
 The agency apparently needs approval from the White House to proceed.
The Park Service said it is working with economists and noise specialists at the Department of Transportation's Volpe National Transportation Systems Center to develop a model that could calculate the economic benefits of varying acoustical conditions in the park.

As an academic, part of me is curious.  I know how much this type of project costs, however, and I don't think its the best use of our tax dollars given our deficits.  To paraphrase the question Mitt Romney asked:

Is this project so important that we should borrow money from our children and grandchildren to fund it?

Thursday, August 29, 2013

Dick Yuengling ... he's awesome

Interesting story here from PA Independent

Mr. Yuengling is the CEO of my favorite domestic beer company.  The interview shows his intelligence isn't just confined to beer brewing.

Some excerpts below.  The first on how PA should abolish the PLCB:

“I don’t support the government being in business. I think they should be private enterprise,” said Yuengling when asked about his thoughts on the state’s alcohol laws. “Everybody has their thumb in the pie for their own good, us included. We’re trying to protect the beer distributors and make sure they’re not harmed by this thing.”

And ...

Yuengling said he would like to see lawmakers in Harrisburg approve a measure to make Pennsylvania a “right-to-work state,” because he believes it would help bring jobs to Pennsylvania. Right-to-work states do not require compulsory membership in a union for people working in certain professions.

Right-to-work works?

Link here.

Larger report here

While I'm always a bit skeptical of reports on either side of this issue, this one seems reasonable.  Further, its worth collecting the evidence as it comes out on this issue.  (We'll want to keep our eyes open for more studies on right-to-work.)  Recall that Michigan passed right-to-work, where employees could choose NOT to join a union, late last year.

An excerpt:

"It is impossible to totally disentangle right-to-work from every other business friendly policy," Hicks said. "That being said, the best studies in this area acknowledge that right-to-work laws are really the king of business friendly policies."
LaFaive agreed.
"There was and remains a lot of debate over whether or not right-to-work laws are economically beneficial," he said. "We believe our study confirms that right-to-work laws have a measurable and positive impact on the economic well-being of a state and its citizens."

Wednesday, August 28, 2013

The economics behind whether to build high speed rail in England

Link here to John Jay column.

An excerpt:

Fourth, there will be large benefits, mostly to business travellers, from time savings. This discussion has degenerated into a dispute over how effectively people use time on trains. My experience of forced inclusion in their mobile phone conversations suggests that they do not.
But speculations on the value of passengers’ time miss the point. Many travellers – not just business users – would pay a premium, possibly substantial, for a faster journey. This amenity could and should be paid for by the travellers themselves, not conferred as a costly gift from taxpayers. Yet no one will back HS2 as a commercial project.

This is a really nice article.  As someone who lived in England for four months, I loved the ease of travel via train, underground train, and bus.  That being said, I found this article somewhat convincing that the high-speed rail may not be needed.  The one counter-point I would have liked to seen explored ...

Taxpayers pay for roads ... so it makes sense that the full cost of trains shouldn't be borne by customers.  If you deduct the amount that would have otherwise been paid for roads ... is the high speed train a good investment?

Tuesday, August 27, 2013

Assorted Links

1. PLCB needs to be reformed

2. An essay on why Republicans oppose costly measures to oppose global warming.

An excerpt: 

Third, global warming is benefiting human welfare, just as warmer temperatures have benefited human welfare in the past. Hurricane activity is declining, tornadoes are less frequent and severe, deserts are shrinking, forests are expanding and crop production is setting new records on a near-yearly basis. Federal mortality statistics show more people die during cold spells and winter months than during heat spells and summer months. The evidence is clear, warmer is better for humans and other animals and for plant life.

3. Hugh Hewitt argues for Obama as the worst president ever.

I still think FDR is the worst president ever, and that the gap between him and whoever is the next worst isn't close.

Monday, August 26, 2013

PA's lieutenant governor weighs in on fracking, plus other fracking links

1.  Some research on environmental effects coming in ...

It will be important to have a number of projects assessing the environmental risks from fracking.  (Less likely that any study finding problems is showing a "false positive".) This is the 2nd study to come out recently that finds little/no evidence of water contamination.  They do find some air pollution issues, however.  It will be important to keep track of future studies to see if increased air pollution is a cause for concern.

2.  PA's lieutenant governor weighs in on Marcellus Shale

He writes:
The impact fee created under the new law has, to date, provided more than $406 millions, most of which goes to local communities across the state, to build roads and bridges, improve public water supplies and enhance emergency services, to name a few benefits.
And electricity rates are now half of what they were in 2008.

He also discusses the economic benefits in terms of jobs gained.  I think he's overstating the number of indirect jobs gained.  The gains are still impressive, but 7 indirect/induced jobs for each drilling job seems very difficult to believe.

3. Poland might start fracking - and it could be a huge player

It concludes:  "One presumes that Polish democracy will prevail in the end. If so, it is a fair bet that Poland will be Continental Europe's fracking power by the early 2020s, with enormous consequences."

Misleading the public - sequestration edition ...

There is some discussion of a cutback to National Park budgets hurting the US economy - which we know is false.

I found this line most interesting:

John Noel, the canal’s chief of interpretation, education and partnerships, said that about $500,000 has been cut from the park’s roughly $10 million budget.
“We have a reduced number in attendance, because we are offering less programs, and visitor centers are open less,” he said. “People are still coming to the parks but interacting less with the interpreters.”
The visitor center in Williamsport has reduced its hours of operation from seven days a week to Wednesday through Sunday.
This is a 5% cut.  How are you open 2 fewer days per week (over 25% reduction) from a 5% budget cut?  If a private enterprise had an official say this, their entire team would have been fired and a new team would have been put in place.

Saturday, August 24, 2013

How Sowell converted from Marxism

Interview is here.  To me, this is the most fascinating question/answer:

Well, one last question prompted by your last answer. You said you used to be a Marxist and that changed. Talk a little bit about how you moved from Marxism to conservatism. 

It occurred during the summer of 1960 when I was an intern of economics in the U.S. Department of Labor. One of the things that concerned me was the question of the effective minimum wages on employment of low income workers. Of course, there are two theories. I was assigned, for example, to study Puerto Rico and so I discovered that after the minimum wage increases, in particular in industries in Puerto Rico, unemployment would increase. 
So I said well, how can I test this? Well, the people who were defending them said no, no, employment went down because a series of hurricanes struck Puerto Rico and in those years destroying the sugar cane. So I said what we needed to do then is find out how much sugar cane was standing in the field before the hurricane struck — and I could see the people in the room were dumbfounded. 
To me, it was just a question of finding out what the facts were. They obviously were not interested in the facts because the labor department was benefiting from administering the minimum wage law. ...
I realized then you can’t depend on the government because the government is not some brooding presence in the sky. The government is an organization with its own interest which it will serve over and above whatever interest it is supposedly being set up to serve.

Friday, August 23, 2013

several fracking stories

1.  Obama vs. NY on fracking. 

It's a rare time I agree with Obama on public policy!

There is debate over the what might happen to the price of natural gas in the near future.  Some are predicting big price increases.  I tend to think the supply is so abundant that the price won't rise much - even if new pipelines increase demand dramatically.  Cases like China, South Africa, and New York which might start increasing their production dramatically are part of why I have this opinion.  

In econ-speak - the supply of natural gas should be very elastic.  As price rises a little, the supply should increase dramatically.  As long as that happens, we shouldn't expect a big price increase.  


Tuesday, August 20, 2013

A reason why government assistance should be cut back ...

Townhall article detailing how welfare can be more profitable than working

WSJ article on the same topic

Excerpts from article:

... the Cato Institute will release a new study looking at the state-by-state value of welfare. Nationwide, our study found that the value of benefits for a typical recipient family ranged from a high of $49,175 in Hawaii to a low of $16,984 in Mississippi.
We shouldn’t blame welfare recipients. By not working, they are simply responding rationally to the incentive systems our public policy-makers have established.

It's sad that our policy makers can be so terrible at creating policies.

Economic impact of gas and oil in Colorado estimated at $29.6 billion

Link to story here. An excerpt: 
The report said the oil and gas industry accounted for $3.8 billion in employee incomes to Colorado households last year, which amounted to 2.8 percent of total salary and wages in the state.

I will likely be reviewing this report with a student worker soon to assess its accuracy, assumptions used, credibility, etc.  $29.6 sounds really high, as the economic impact of fracking in PA has been estimated to be between $3 (low end) to $15 (high end), depending on the author.  That being said, this doesn't seem to be focused solely on fracking.

Monday, August 19, 2013

Assorted Links

1.  This isn't a link, but a picture that's going around ...

The whole thing is worth reading ... here is the conclusion:

I think it is true that the more honest case for the minimum wage is coming from proponents who are biting the bullet and arguing that the optimal minimum wage would be one that increases unemployment a little. I for one am not sure that hurting the worst off among the low-skilled to benefit the slightly better off is good policy. I think there are high costs to pushing people out of the bottom of the labor market by removing the lowest ladder rung. I also think reasonable people can disagree about this so long as we are talking about modest changes in the minimum wage.

Lots of great analysis of what to do and not to do - from a very smart economist.  An excerpt:

My morning routine, when not pregnant, is to have a cup of coffee before breakfast on an empty stomach. Early in my pregnancy, this idea was, frankly, revolting. After talking with other women, it sounds like this is fairly typical.
We know that nausea is a sign of a healthy pregnancy, but (as in my case) it also causes women to avoid coffee. This means that the pregnant women who drink a lot of coffee also are more likely to be the ones who aren't experiencing nausea. So here we may well be mistaking a correlation for an underlying cause: The women who drink less coffee have fewer problems not because they limit their caffeine intake but because they tend to suffer from nausea, which inhibits coffee drinking.

Saturday, August 17, 2013

Idea to fingerprint those in NYC who get public housing

An excerpt:
But residents who live within the confines of NYCHA buildings said the mayor’s fingerprinting idea goes too far. 
“That’s like invading someone’s privacy or something. Why you want to fingerprint somebody?
I don't have much sympathy for this argument because the government is invading the economic liberty of every other taxpayer by forcing them to pay for this person's housing.  If someone chooses to take other people's money, it's tough for me to buy into an argument that their privacy is being "invaded".  They can avoid their privacy being invaded by paying for their own housing.  
The reason behind the ban ...
“Five percent of our population lives in NYCHA housing, 20 percent of the crime is in NYCHA housing – numbers like that. And we’ve just got to find some way to keep bringing crime down there. And we have a whole group of police officers assigned to NYCHA housing,” 
This doesn't seem so bad to me ... in fact, if I did receive public housing, I'd like to have this system in place as I suspect it would keep me safer.  Further, I can't imagine the cost on this is too high.  

Friday, August 16, 2013

Using demand and supply to choose a vacation spot

School for my children starts next week, and we realized that our youngest had never been to the ocean.  We decided to just take a short getaway to visit the beach, but which one?

The issues to consider:

1. We didn't want to travel too far.  Anywhere in NJ down to perhaps Ocean City, MD was in play.

2. We want the most bang-for-our-buck, and price is a big consideration!

The result for us then was quite obvious:

We got a room on the ocean, with a beautiful ocean view, for a very low price!  Other beaches in NJ, DE, and MD charged about triple what we paid in AC for similar rooms.

The question, of course, is why?  

1. Atlantic City expanded greatly in the past, as it was a gambling hub.  So they had lots of hotels, but very large demand as well.  With both of demand and supply increasing, the quantity of rooms went up dramatically, but price stayed about the same.

2. When casinos in Pennsylvania started springing up, this hurt Atlantic City's business dramatically.  Only a tiny fraction of Pennsylvanians who used to travel to AC will still make the trip.  This decreased the demand for hotel rooms significantly. 

3. As we know from principles of microeconomics, a decrease in demand will decrease the price.

I didn't know what to expect as far as beach quality, but I was impressed and our kids loved the ocean.  Overall, Atlantic City isn't the safest place.  However, for a short trip where we stayed only on the beach/boardwalk (except for a short excursion to the outlet malls), AC seemed seemed quite safe.  We'll definitely be back! 

Thursday, August 15, 2013

Assorted Links

1.  Great quotes by Thomas Sowell.  (A year old, but first time I've seen it, so ...)

Here's #20:

20) "The poverty rate among black married couples has been in single digits ever since 1994. You would never learn that from most of the media. Similarly you look at those blacks that have gone on to college or finished college, the incarceration rate is some tiny fraction of what it is among those blacks who have dropped out of high school. So it’s not being black; it’s a way of life. Unfortunately, the way of life is being celebrated not only in rap music, but among the intelligentsia, is a way of life that leads to a lot of very big problems for most people."

2. A great, moving, and ultimately very sad article by Walter Williams.  He asks: have the sacrifices of the civil rights heroes been in vain?  

3.  This is a good review of the politics behind "Common Core". 

4. JPMorgan investigated ...

Saturday, August 10, 2013

Huge increases in people renouncing US citizenship

Link here from Zero Hedge

It starts:
A massive 1,131 individuals renounced their US citizenship last quarter, according to data that has yet to be officially released (though I was able to procure an advanced copy). 
This is a HUGE jump. 
Compared to the same quarter last year in which 188 people renounced their US citizenship, this year’s number is over SIX TIMES higher.

A couple years ago, when the US shut down some of the online poker sites, you had a large number of people leaving the US to pursue their economic dream.  That had nothing to do with taxes, just the desire to earn a living.  I'm not sure many of those people actually renounced their citizenship, however.

What has changed that is prompting so many to give up their citizenship?

Thursday, August 8, 2013

Assorted Links

1. A story of the NFC Championship game from the 2009 season.  I'm a Vikings fan, so I remember this game somewhat fondly but mostly for causing painful memories.  This story, from the backup QB of the Vikings, is an amazing tale from someone on the sidelines.

2. Another agency that should be abolished.  I'd love to see somebody try to debate the point that the benefits of HUDD outweigh the costs.  That would be my comedy for the night.

3.  More minimum wage research (via Marginal Revolution).

4. From Mankiw: Obamacare causing pain to faculty.

An excerpt:
With the implementation of the ACA (Affordable Care Act) these institutions are giving notification to their part-time faulty that their individual teaching schedules will now be limited to three sections.  
He goes on to discuss how this will result in class sections being cancelled.  I'll be curious to see if any faculty turn on Obama because of this.  I'm not holding my breath.

My thoughts on Washington, DC

I visited Washington while attending the AAEA annual conference.  I also parlayed this into a mini-getaway with my family.

Some thoughts:.

1. The International Spy Museum is amazing.  With 3 kids, I certainly would prefer NOT paying for a museum, as you do with all the Smithsonian museums on the National Mall.  But, this was so worth it.  As I explained to my economist friends - my consumer surplus there was higher, even after paying the entry fee.  If you enjoy books from authors like Tom Clancy, Vince Flynn, or Lee Child, I think you'll find this museum about real-life spies great.  I actually think this is the most-fun I've ever had in a museum.  

2.  It was so rewarding to go to the monuments in Washington with my children.  It is a very different experience when you can bring your kids to these monuments and teach them.  It's one thing to talk at home, but it makes it much more real for them when they're at the monument and they ask specific questions about the memor

You can tell them about sacrifices, but when they see the names on the Vietnam Memorial, it hits home.

Also, we had a discussion with our children about the phrase "Freedom isn't Free".  

These are special on their own, as I think about the sacrifices my father, grandfathers, and countless others made.  To share it with my children, however ... For me, these types of memories are priceless.

3.  The AAEA conference was great, again.  I attend this every year, and always get so much out of it.  It's a way to keep in touch with colleagues and hear about new and exciting research.  

I was part of a great session on deception in experiments, learned about great new research, kept up with colleagues and their work, and had a great time.

Wednesday, August 7, 2013

Two fracking stories

1. The Industry analysis of Duke's Marcellus Shale study.

Scientifically, the PSU proceedures are clearly much stronger.  That being said, the problem the industry will run into is it is impossible to prove something is safe.  All you can do in these studies is to show you found no evidence that it isn't safe.  That should be good enough (its good enough for prescription drugs, for example), but I doubt it will be for some of the opponents.  I still think more studies on the environmental/health impact by objective sources are needed.

2. Illinois governor signs regulations into law for fracking.

It starts with:
Illinois Gov. Pat Quinn on Monday signed into law the nation's strictest regulations for high-volume oil and gas drilling.
I disagree, as in New York you can't frack right now.  Further, the environmental groups seem pretty upset about this.  Given how left-leaning Illinois is, however, I suspect the headline is correct for states that currently allow legalized fracking.  It will be interesting to see if this causes some gas companies to choose to leave Illinois to frack elsewhere.

Saturday, August 3, 2013

Assorted Links

1.  Jayson Lusk discusses the misconception that some items are "overpriced" in the grocery store.  

It's worth reading.  Here's an excerpt:
The story equates “overpriced” with the “percent markup”, which is pretty shaky.  There are a lot of good reasons why the percent mark-up may vary across products that has little to do with being “overpriced”.  For example, differences in demand for convenience and other characteristics, differences in costs of packaging, storage, transportation, etc. will cause differences in the percent markup.  

2. The town in Florida where most of the population are sex offenders. (H/T Marginal Revolution)

I just found this fascinating.  It does make a lot of sense that these towns will emerge.  Also, the designation of sex-offender has a lot less importance when its applied so liberally.  I do not view a 19-year old in the story who had a 14-year old girlfriend the same as a violent rapist.  Yet, both get the same designation.

3. A reporter gets three free Obamaphones.  

Once again, never let anybody tell you there isn't wasteful government spending.  There is plenty to cut.

4.  He quit his leadership role at the NAACP because they're only out for liberals.

An excerpt:
The end of my lifetime membership of the NAACP began the minute I dared to speak out. I was ostracized and punished for declaring that my rights come from God, not the government and that I believed the NAACP stood for the "advancement of colored people," not the "advancement of colored progressives."

Well written, but it has been apparent that, despite the fact that their name claims they'd try to "advance" lives, the NAACP promotes a left-wing agenda and has done far more harm than good.

Friday, August 2, 2013

Link to my radio interview on using your faith in economic decisions, minimum wages, and Walmart

I was on for longer than I expected - about 40 minutes, and it was a great discussion!

Link is here.  The relevant discussion starts at about the 29th minute.

Assorted Links

1.  Tyler Cowen discusses how a for-profit university is joining NCAA Division 1 sports

An excerpt:
A university using intercollegiate athletics to drive up its stock value — that’s not what we’re about,” Arizona State president Michael Crow said in a phone interview over the weekend. “ - See more at:

Given how big of a business NCAA football is for Division 1 schools, I find it a bit self-serving for that college president to criticize the entry of the for-profit school.

2.  John Lott has a great post on risks of guns killing people younger than 20, and how it happens.  

3. More leftist drivel stating how there is a $45 billion economic impact from National Parks.

As I've covered before, the impact to local economies can be significant, but the economic impact to the US economy from National Parks is approximately zero.

4. My former colleague David Kendall has a blog.  Here is a great post about how poor of a return on investment we get from Social Security. 

An excerpt:
Social Security is far worse than a Ponzi scheme.  At least with a Ponzi scheme, like the one Bernie Madoff ran for several years, some of the investors get good returns on their money.  Social Security is an equal opportunity rip off; no one gets a good return on investment.