Externalities

Week 1 Guidance

Hello Class!

 

In this first week of class we will be introducing ourselves and getting to know each other.  It is important to get to know one another so we can build a foundation of positive learning and interaction.  Remember you will be asked to respond to one another during the week and I ask that you treat each other respectfully as you will be encouraged to critically reflect on your peer’s postings.  This will generate higher learning.  Also for the weekly written assignments a title page, short introduction and conclusion is expected.  For the introduction make sure you start off with sentence that grabs the reader’s attention.  Also include what the reader should expect or the questions being answered, and end the introduction with the thesis or purpose of the paper.  The short conclusion should start off by restating the purpose or thesis statement, and then synthesize the main points of the paper.

In this first week you will be reviewing chapters one through four of your text book in preparing for your two discussion questions and your assignment.  Your first discussion question is on land preservation versus land development.  You will have to research this debate and attach an article on the debate with a short summary of the article.  Then select a side and discuss the pros and cons of your selection concentrating on future implications the selection.  Tietenberg and Lewis (2012) point out, “If developed, the land may not only provide jobs for workers, wealth for owners, and goods for consumers, but also it may degrade the ecosystem, possibly irreversibly” (p. 56).  The authors give an example on preservation versus development in Australia in example 3.1.  I have attached the full article the authors are referencing.  As a pointer reading the reference sections of a research article is very helpful in research as you can branch out and find other articles on the topic, then again look at their reference sections to find more research articles on the topic. Australian Valuation .

Your second discussion question is on the cost of meeting environmental standards.  You will compare and contrast two approaches dealing with this topic.  You should use chapter three and of your text book as a basis of answering the second discussion question, Tietenberg and Lewis (2012) review benefit cost analysis and other methods such as contingent valuation.  The authors also review approaches to cost estimation such as: Survey, Engineering and combined approach.  The combined approach as the title suggests uses both survey and engineering to minimize their problems as the authors describe, “To circumvent these problems, analysts frequently use a combination of survey and engineering approaches…This combined approach attempts to balance information best supplied by the source with that best derived independently” (p. 59).

Living and growing up in Western New York, primarily in the Buffalo/Niagara Regions I have had my fair share of environmental issues/stories, from Love Canal which was a toxic underground disposal issue, to an air quality issue with one of the factories near Tonawanda, NY.  The air quality issue has generated some local attention as studies are being done and the economics of those studies are being debated.  For an example should the City pay for the study or the Company?  Also questions of accountability of the managers and the stakeholders, should there be fines for them, should the company stop operations?  Also can there be a direct link between the study’s findings and the company?              

Your assignment is applying the subject of externalities (chapter two) with cigarettes.  I strongly suggest you use the questions within the assignment as headings to make sure you stay focused, organized and address each question.  Tietenberg and Lewis (2012) explain externalities as, “An externality exists whenever the welfare of some agent, either a firm or household, depends not only on his or her activities, but also on activities under the control of some other agent” (p. 25).  The authors go further and use an example to demonstrate externalities using the steel industry.  Make sure to review this section when completing your assignment.              

Attached an optional article that relates to our discussions this week.                  

Remember that your introduction is due on Tuesday 3/31.  Your initial week one discussion question postings are due on Thurs. 4/2, and to respond to at least two of your fellow students initial postings during the week.  This will generate a substantive discussion thread and give your classmates time to respond to your questions.  Also if you are asked questions please respond as this will also generate critical thinking.  Your written assignment is due on day seven, Monday 4/6.  I look forward to our critical discussions on environmental economics and reading your postings/assignments!

References

Berkery, D. (2008). Raising venture capital for the serious entrepreneur (1st ed.). New York, NY:McGraw-Hill.

Tietenberg, T., & Lewis, L. (2012).  Environmental and natural resource economics (9th ed.).  Upper Saddle River, NJ: Pearson Addison-Wesley. ISBN: 9780131392595