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Also, maybe the experimenters should have shown a video on just how cute otters can be. Just saying.
Toggle Commented Nov 20, 2014 on Econ 398 Papers at Jolly Green General
As with the rest of my peers, I feel like this paper and its experiment did an excellent job at highlighting the discrepancies between WTA and WTP. It echoed similar scenarios that we had discussed in class such as the hidden conservation fee that tourists pay when visiting Belize and how people are much more willing to accept things like that than having to "pay the extra fee" that would go towards conservation if it was listed separately and not included in a plane ticket's cost. I would love to know the results of this particular experiment performed again using the fMRI machine as I think it would really add some insight to the field of Neuroeconomics. While I think the results seem pretty accurate for this experiment, I think that they should have tried to get a larger sample size with proportionately more men, and used older adults instead of college students because personally as a poor college kid, I'd probably be more inclined to keep all the money whereas a young professional might be more generous. Also it would be very interesting to perform this in America as opposed to Sweden since Sweden is a much more environmentally conscious nation, so maybe they are pre-disposed to care more about conservation, thus eliciting stronger feelings of guilt if the student decided to keep the 150 SEK. Overall, I think the findings of the experiment are pretty spot on. The whole public vs. private goods in regards to WTA and WTP doesn't surprise me at all. In face it just reminds me of the Tragedy of the Commons. Like if a public park was going to shut down due to lack of funds, I would personally say that my willingness to accept not having it would probably be higher than my willingness to pay to keep it. I might really enjoy the park, but my WTP would probably be only $10 to keep it, while at $50 I guess I would be ready to forsake it. There's just something about having to fork over money that's already mine, but I guess I'm just a tightwad when it comes down to the core of the reason.
Toggle Commented Nov 20, 2014 on Econ 398 Papers at Jolly Green General
As with everyone else, I found this article also thought-provoking and very interesting. One of the first things that grabbed me was on page 1453 that "there is also ongoing concern that the gap between science and policy is not being bridged effectively". Because as much as people donate to save the pandas, it comes down to effective conservation and environmental protection policy that really makes a difference. My first thought on reading that sentence was that these midterm elections have really screwed over any chance of that gap between policy and science getting any better - in fact it's most likely going to make things worse. I found a disheartening article from The Hill that only highlights that: Tying the elections and the aftermath to the affect and risk portion of the article, it makes me question the decision making process of the average American voter. I would argue that a good portion of the voters who cast their vote for the GOP did so on an affect based decision from the experiential system. I am of course referring to the voters who cast their red vote just because Obama is a Democrat, or the ones who were brought up Republican and just automatically vote red. I don't want to make this a Democrats vs. Republicans post, but unfortunately that's what the subject of environmental protection has come to. If people made analytic decisions and just looked at the facts and science, then this shouldn't be an issue! I have to echo Julia on the individual's participation in conservation efforts. After living in the "Green City" in Germany last fall (or really just Germany in general) I have seen what effective conservation efforts look like. And EVERYONE there cares about the environment. But this might come with "integral affect" of being a European. The cities have always been densely populated and they don't have the land or necessarily the resources like we do, so they try to protect what they do have and reuse what they can. Yes it's annoying the first time you forget to bring your own bag to the grocery store, but you learn from it and honestly feel good about the fact that you aren't using a plastic bag. I'm sorry that this has mostly turned into a rant about America's take on environmental policy, but when senators are comparing the EPA to Nazi Germany's Gestapo, that only invokes the wrong kind of emotions for future decision making and a misinformed public is one of the greatest risks to protecting environmental health.
Toggle Commented Nov 11, 2014 on Econ 398 for Tuesday at Jolly Green General
I'd say that I agree with a majority of what has been written above. Though I think Julia had an interesting point about the irrational decisions of supposedly rational beings because I too can relate to the decisions of those in the tests. So with this relatively new field of neuroeconomics where you combine neuro, econ, and psychology, why is it that we revert to the standard economic definition of what is a rational choice and what is not? I'm not a psychologist or a neuroscientist, but if enough people would choose the "irrational" choice, would it still be irrational? As far as the experiments in the paper go, while all were interesting, I found the decision-making while aroused one particularly fascinating. Particularly because as a current college student I know from others that this isn't uncommon. While I know that males are much more likely to be risk takers than females and thus probably better for the experiment, I still think it would have been interesting to know a college woman's response to the "Heat of the Moment" experiment. The risk attitude vs. risk perception outcome of the experiment is very enlightening though, but it makes sense. I wouldn't expect emotions to change how I perceive the risk of skydiving, but my attitude towards the risk would definitely change based off of my emotional state. If I was in the plane and fearful of the jump, my attitude towards it would be much more different than when I experienced the excitement of initially buying the ticket. I have to agree with Paul about singling out emotions though. Honestly if you asked me about my emotional state, 90% of the time I wouldn't be able to pinpoint just one emotion - usually it's a clusterfuck of them. The other 10% of the time I would probably distinctly be able to say that I'm sad because that seems to be one emotion that I will experience in and of itself. I know in the paper it remarks about how we are so sensitive to loss. And I know that I have a much easier time remembering the bad memories than the good ones. I would say that negative memories and this easily definable emotion of sadness play heavily into loss aversion decision making. I'm no neuroeconomist, but I think that'd been an interesting area to study.
Toggle Commented Nov 4, 2014 on Econ 398 for Tuesday at Jolly Green General
I find it interesting that Hausman claims that CVM is hopeless. I mean sure it has it's flaws, it isn't a perfect form of measurement, but that doesn't make it completely hopeless. I personally think it's a good way to measure WTP and preferences. Sure it's subject to hypothetical bias and there is a discrepancy between WTP and WTA, but overall it isn't that bad. I love how Whitehead's paper is a complete counterargument to Hausman's, and he has a very good point in the abstract that he isn't trying to convince the reader that contingent valuation is the best thing ever. Rather he's just trying to prove that it is not a hopeless method and that there is still research that needs to be done to improve it. Clearly there is a need for more research in CVM within the field of economics, because it really isn't as bad as Hausman makes it out to be.
The visuals alone that CNN posted should be enough to convince the average joe that we truly are doing something terrible to our oceans, and that in the long run humans are decimating their own greatest source of protein. As CNN reported, the biggest problem is that most of the ocean is outside of international law and legal control. And unfortunately, laws and enforcement of those laws are the only ways to stop the harm to our oceans. I completely agree that trawling needs to be outlawed. Sure it may be quicker, but the damage done and the unnecessary sea life that is killed in the process does not make it worth it. If it can't be outlawed then it needs to be severely taxed. As someone who lives on the coast, I know that fishing and shrimping are people's livelihoods, which is why they have the incentive to catch as much as they can to sell. And that's the problem, it becomes somewhat of a race. If neighbors Bob and Joe are both fishermen, Bob's going to catch the absolute maximum that he can because he knows that if he doesn't, his neighbor Joe will. And this is just discussing the fish, not even the coral reefs that fall prey to the destructive fishing techniques. Coral reefs as we have learned, are the most diverse ecosystems on the planet host to countless numbers of different ocean species. But with these habitats being destroyed, the sea life that calls the reefs their homes are becoming homeless, vulnerable to predators, and in a lot of cases are setting themselves up to become endangered if they aren't already. There needs to be an international solution to this problem. And that solution needs to be compatible for developing nations since they are the most dependent on fish as their main source of protein (if they are located near the ocean). We can't' tell nations or people that they can't fish, obviously that wouldn't do anything. But we can try and place restrictions on how people fish, and try to promote sustainable fishing so that we aren't' driving species to extinction.
The article is one of the few hopeful articles that we've read, but I do think that there is some false hope in it. It states that by 2030 the entire state of New York could run on renewable energy. However, there are high costs in implementing this plan, which would most likely result in an increase in taxes which would be opposed by constituents in New York. While the long term benefits clearly outweigh the costs, the immediate costs of implementing the changes would be a hard thing to swallow. However, since the technology is there, it is something that should be implemented. If New York could switch to all renewable energy sources, other states would follow. Saving $33 billion in health care costs, preventing 4000 premature deaths, and reducing end use power demand by 37% all seem to be benefits that I feel should outweigh the costs. I'm most curious as to whether this will actually be implemented. It also makes me wonder what other states have the capability to do the same as New York, and which ones would be willing to follow in New York's footsteps if it were to do the same.
I find it sad that environmental policy in Washington has such sharp political divides. The state of our environment shouldn't be disregarded, and it's a good thing that President Obama has made it clear that it is an important issue for him, so hopefully there will be more support for environmental legislation. "Cap and tax" as referred to by republicans has such a negative connotation, and while these Republicans don't think that the environment is that big of an issue, that we should focus more on "fixing the economy" but when you let the environment go to hell, it will still affect the economy. The environmental landscape of a country does impact economic production and the economy. We have observed that from the developing nations located around the equator. Climate change policy should not be such a polarized issue in Washington, in fact it shouldn't be a political issue at all, and it definitely should not be disregarded as a minor issue. On another note, I liked the fact that this article was about cap-and-trade as opposed to greenhouse taxes as a majority of the articles we've read have been staunchly in favor of taxation over cap and trade, though it shows that cap and trade can be equally effective through the observed reduction in SO2 emissions. Again, it's frustrating that cap and trade is labeled as a liberal policy because people get so hung up on the word liberal before it's even given a chance.
Toggle Commented Mar 12, 2013 on Another Political Football at Jolly Green General
Talking about the stabilization wedges in class the other day, and looking at the charts of carbon dioxide emissions, it was no surprise that China was leading the pack. Granted the conditions in Beijing were severely worsened by the sandstorm, but from looking at the pictures of the city, even with a sandstorm they shouldn't have looked so bad. I would hate to have to walk around Lexington with a mask on all the time, but if the air quality was anything like that of Beijing, I would have to or I wouldn't feel safe. Particles that large can cause significant damage to the lungs, as the article stated, it's comparable to living in an airport smoking lounge. I was impressed with Beijing's attempts to clean up the city and air around the 2008 olympics, but it appears that it was a short term effort, nothing strong enough to solve a long term problem. However it is comforting that China's new leaders have discussed improving the mainland's environment, so hopefully some stricter regulations will be put into place. For the sake of people's health, some drastic changes need to occur. A PM2.5 getting lodged in my lungs doesn't seem like a very pleasant experience, and I can't imagine that the Chinese are ok with that either.
Toggle Commented Mar 3, 2013 on Off The Charts at Jolly Green General
In answer to Austin's question, yes the permafrost would thaw, but that just releases stored carbon into the atmosphere and we're trying to minimize the amount of carbon being released as to not speed up or further the process of global warming. And while "fresh soil" may be unlocked, I highly doubt that there would be a mass migration to the northwest territories of Canada. Though I do agree with Austin on the fact that I don't believe there is substantial enough evidence to link "super storms" with global warming. I believe we would have to have access to a much longer history of records of these storms to justify a claim like that. But it is embarrassing that we are 33rd on a list of 34 in carbon taxes. As a leader in the industrialized world, what kind of example do we set when we aren't trying to be economically efficient when it comes to carbon taxes. Clearly we are taxing way below the equilibrium for the gas tax as we aren't fully taxing the negative externality. Granted I hate paying more at the pump as I drive a Ford Expedition, but it's a car that my parents gave me and I drive very little because I hate paying for gas. But this is an instance where I would suck it up and pay more if it would help the GDP that much. I'm all about raising that revenue.
Having followed the presidential inauguration in one of my german classes through the eyes of Germany (or rather most of Europe), I think it's topics like this which are the reason President Obama is so well liked overseas. Being environmentally efficient, especially when it comes to energy usage is really important in Europe, and so when the president addresses climate change and energy policy changes, Europe rejoices, while America is ho-hum about it. Even though not everyone agrees to the fact that the planet has warmed in the past 100 years, the evidence proves that it has. I do believe that more and more Americans are realizing the implications of global warming and the threat it poses. However, that's not all Americans, and most just don't see it as one of the pressing issues. Having lived in Germany for six weeks last summer, evidence of green living and energy conservation are everywhere. My host mother greatly emphasized turning off the lights, making sure the windows were closed, and there was no dryer to dry my clothes - everything was hung out to dry. They are so energy efficient because energy costs so much, and that's something that I believe we need to see in America. We are not paying the full price for our energy like they do, and that's seen not only in electricity and water bills, but also at the pump. The sad fact of the matter is that people are so less likely to care, unless it hits their pocketbooks. Obama was right to include climate change and energy policy in his address, because it's about time Americans start caring about these matters.
If one asked the average American the difference between a Pigouvian Tax and a fiscal tax, they wouldn't be able to tell you the difference. The general response you would get would be, "Either way, they're costing more money." A majority of people view taxes as the way that the government earns revenue. Very few, I would say, view any as ways to correct social behaviors. They're purpose is to reflect the true cost of the good as seen with the marginal social cost curve. While these taxes certainly aren't liked, they do have a bit of an impact. When gas prices are higher, people drive less and carpool more. And not every smoker can afford $5/pack per day for cigarettes. While pigouvian taxes are better for the economy and reflect the true equilibrium as they account for externalities, Washington has people lobbying against them. Voters certainly aren't going to want to vote for someone who is all for raising the gas tax, so it creates a tricky situation. For as much information as there is out there about environmental degradation, one would think that people would be more invested in trying to protect their home turf. This is when policy makers and their constituents need a reality check, that the environment is actually essential to their current ways of life, and if paying a little extra on gas is what it takes to help preserve it, then it needs to be done.
Toggle Commented Jan 22, 2013 on My Bad..... at Jolly Green General
Friedman's column certainly highlights the benefits for a carbon tax, as with our current economic situation, the US hasn't been doing so hot; and with the environmental situation, things are a little too hot. Unfortunately the problem always seems to be the partisan politics in Washington. Congress can't seem to agree on anything. The tax questions that arose with the "Fiscal Cliff" appeared too difficult for Congress to deal with, and just adding another tax to the table for discussion just seems like it would be too much for them. However, global warming is a serious issue that while some people try to downplay or even argue against, it exists and it's a serious problem that we are going to have to deal with. The tundra defrosting and releasing even more carbon into the atmosphere is only one of the few negative externalities of global warming. There is also drought which means poor crop production and wildfires. Both of which have negative effects on the economy. It makes it basically impossible to state that the environment doesn't affect the economy, because it does. For example if drought ruins the wheat crop in the midwest, supply of wheat goes down, prices go up, and all subsequent wheat product's (like bread and cereal) prices also go up. When prices go up, people don't buy as much which hurts the wheat market and thus affecting the aggregate economy. That's just one example of how they're intertwined. It shows that Washington cannot ignore global warming because it does affect the economy more than people think.
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