andPublicGoods微觀經(jīng)濟學(xué)華僑大學(xué)JeffCaldwe講義

TopicstobeDiscussedExternalitiesWaysofCorrectingMarketFailureExternalitiesandPropertyRightsCommonPropertyResources1Chapter1TopicstobeDiscussedExternal1TopicstobeDiscussedPublicGoodsPrivatePreferencesforPublicGoods2Chapter1TopicstobeDiscussedPublicG2ExternalitiesNegativeActionbyonepartyimposesacostonanotherpartyPositiveActionbyonepartybenefitsanotherparty3Chapter1ExternalitiesNegative3Chapter3ExternalCostScenarioSteelplantdumpingwasteinariverTheentiresteelmarketeffluentcanbereducedbyloweringoutput(fixedproportionsproductionfunction)4Chapter1ExternalCostScenario4Chapter4ExternalCostScenarioMarginalExternalCost(MEC)isthecostimposedonfishermendownstreamforeachlevelofproduction.MarginalSocialCost(MSC)isMCplusMEC.5Chapter1ExternalCostScenario5Chapter5MCS=MCIDP1AggregatesocialcostofnegativeexternalityP1q1Q1MSCMSCIWhentherearenegativeexternalities,themarginalsocialcostMSCishigherthanthemarginalcost.ExternalCostsFirmoutputPriceIndustryoutputPriceMECMECIThedifferencesisthemarginalexternalcostMEC.q*P*Q*TheindustrycompetitiveoutputisQ1whiletheefficientlevelisQ*.

Theprofitmaximizingfirmproducesatq1whiletheefficientoutputlevelisq*.6Chapter1MCS=MCIDP1AggregateP1q1Q1MS6ExternalCostNegativeExternalitiesencourageinefficientfirmstoremainintheindustryandcreateexcessiveproductioninthelongrun.7Chapter1ExternalCostNegativeExternal7ExternalitiesPositiveExternalitiesandInefficiencyExternalitiescanalsoresultintoolittleproduction,ascanbeshowninanexampleofhomerepairandlandscaping.8Chapter1ExternalitiesPositiveExternal8MCP1ExternalBenefitsRepairLevelValueDIsresearchanddevelopmentdiscouragedbypositiveexternalities?q1MSBMEBWhentherearepositiveexternalities(thebenefitsofrepairstoneighbors),marginalsocialbenefitsMSBarehigherthanmarginalbenefitsD.q*P*Aself-interestedhomeownerinvestsq1inrepairs.Theefficientlevelofrepairsq*ishigher.ThehigherpriceP1discouragesrepair.9Chapter1MCP1ExternalBenefitsRepairLe9WaysofCorrectingMarketFailureAssumption:ThemarketfailureispollutionFixed-proportionproductiontechnologyMustreduceoutputtoreduceemissionsUseanoutputtaxtoreduceoutputInputsubstitutionpossiblebyalteringtechnology10Chapter1WaysofCorrectingMarketFail10TheEfficientLevelofEmissionsLevelofEmissions246DollarsperunitofEmissions02468101214161820222426MSCMCAE*Theefficientlevelofemissionsis12(E*)whereMCA=MSC.Assume:1)Competitivemarket2)Outputandemissionsdecisionsareindependent3)ProfitmaximizingoutputchosenAtEothemarginalcostofabatingemissionsisgreaterthanthemarginalsocialcost.E0AtE1themarginalsocialcostisgreaterthanthemarginalbenefit.E1Whyisthismoreefficientthanzeroemissions?11Chapter1TheEfficientLevelofEmissio11WaysofCorrectingMarketFailureOptionsforReducingEmissionstoE*EmissionStandardSetalegallimitonemissionsatE*(12)EnforcedbymonetaryandcriminalpenaltiesIncreasesthecostofproductionandthethresholdpricetoentertheindustry12Chapter1WaysofCorrectingMarketFail12StandardsandFeesLevelofEmissionsDollarsperunitofEmissionsMSCMCA312E*StandardFee13Chapter1StandardsandFeesLevelofEmi13OptionsforReducingEmissionstoE*EmissionsFeeChargeleviedoneachunitofemissionWaysofCorrectingMarketFailure14Chapter1OptionsforReducingEmissions14TotalAbatementCostCostislessthanthefeeifemissionswerenotreduced.TotalFeeofAbatementStandardsandFeesLevelofEmissionsDollarsperunitofEmissionsMSCMCA312E*Fee15Chapter1TotalCostislessthantheTota15StandardsVersusFeesAssumptionsPolicymakershaveasymmetricinformationAdministrativecostsrequirethesamefeeorstandardforallfirmsWaysofCorrectingMarketFailure16Chapter1StandardsVersusFeesWaysofC16Firm2’sReducedAbatementCostsFirm1’sIncreasedAbatementCostsMCA1MCA2TheCaseforFeesLevelofEmissions246FeeperUnitofEmissions01234567891011121313514Thecostminimizingsolutionwouldbeanabatementof6forfirm1and8forfirm2andMCA1=MCA2=$3.3.752.50Theimpactofastandardofabatementof7forbothfirmsisillustrated.NotefficientbecauseMCA2<MCA1.Ifafeeof$3wasimposedFirm1emissionswouldfallby6to8.Firm2emissionswouldfallby8to6.MCA1=MCA2:efficientsolution.17Chapter1Firm2’sReducedFirm1’sIncre17AdvantagesofFeesWhenequalstandardsmustbeused,feesachievethesameemissionabatementatlowercost.Feescreateanincentivetoinstallequipmentthatwouldreduceemissionsfurther.WaysofCorrectingMarketFailure18Chapter1AdvantagesofFeesWaysofCorr18ABCistheincreaseinsocialcostlessthedecreaseinabatementcost.MarginalSocialCostMarginalCostofAbatementTheCaseforStandardsLevelofEmissionsFeeperUnitofEmissions0246810121416246810121416EBasedonincompleteinformationstandardis9(12.5%decrease).ADE<ABCDABCBasedonincompleteinformationfeeis$7(12.5%reduction).Emissionincreasesto11.19Chapter1ABCistheincreaseMarginalMar19Summary:Feesvs.StandardsStandardsarepreferredwhenMSCissteepandMCAisflat.Standards(incompleteinformation)yieldmorecertaintyonemissionlevelsandlesscertaintyonthecostofabatement.WaysofCorrectingMarketFailure20Chapter1Summary:Feesvs.StandardsWay20Summary:Feesvs.StandardsFeeshavecertaintyoncostanduncertaintyonemissions.Preferredpolicydependsonthenatureofuncertaintyandtheslopesofthecostcurves.WaysofCorrectingMarketFailure21Chapter1Summary:Feesvs.StandardsWay21TransferableEmissionsPermitsPermitshelpdevelopacompetitivemarketforexternalities.AgencydeterminesthelevelofemissionsandnumberofpermitsPermitsaremarketableHighcostfirmwillpurchasepermitsfromlowcostfirmsWaysofCorrectingMarketFailure22Chapter1TransferableEmissionsPermits22QuestionWhatfactorscouldlimittheefficiencyofthisapproach?WaysofCorrectingMarketFailure23Chapter1QuestionWaysofCorrectingMar23TheCostsandBenefits

ofReducedSulfurDioxideEmissionsCostofReducingEmissionsConversiontonaturalgasfromcoalandoilEmissioncontrolequipment24Chapter1TheCostsandBenefits

ofRedu24BenefitsofReducingEmissionsHealthReductionincorrosionAestheticTheCostsandBenefits

ofReducedSulfurDioxideEmissions25Chapter1BenefitsofReducingEmissions25SulfurDioxideEmissionsReductionsSulfurdioxideconcentration(ppm)2040600Dollarsperunitofreduction0.020.040.060.08MarginalSocialCostMarginalAbatementCostObservationsMAC=MSC@.0275.0275isslightlybelowactualemissionlevelEconomicefficiencyimproved26Chapter1SulfurDioxideEmissionsReduc26EmissionsTradingandCleanAirBubblesFirmcanadjustpollutioncontrolsforindividualsourcesofpollutantsaslongasatotalpollutantlimitisnotexceeded.OffsetsNewemissionsmustbeoffsetbyreducingexistingemissions2000offsetssince197927Chapter1EmissionsTradingandCleanAi27Costofachievingan85%reductioninhydrocarbonemissionsforDuPontThreeOptions85%reductionateachsourceplant(totalcost=$105.7million)85%reductionateachplantwithinternaltrading(totalcost=$42.6million)85%reductionatallplantswithinternalandexternaltrading(totalcost=$14.6million)EmissionsTradingandCleanAir28Chapter1Costofachievingan85%reduc281990CleanAirActSince1990,thecostofthepermitshasfallenfromanexpected$300tobelow$100.CausesofthedropinpermitpricesMoreefficientabatementtechniquesPriceoflowsulfurcoalhasfallenEmissionsTradingandCleanAir29Chapter11990CleanAirActEmissionsTr29RecyclingHouseholdscandisposeofglassandothergarbageatverylowcost.Thelowcostofdisposalcreatesadivergencebetweentheprivateandthesocialcostofdisposal.WaysofCorrectingMarketFailure30Chapter1RecyclingWaysofCorrectingMa30TheEfficientAmountofRecyclingScrapCost04812MCRMSCm*Witharefundabledeposit,MCincreasesandMC=MSC=MCR.MC+perunitrefundMCm1Withoutmarketinterventionthelevelofscrapwillbeatm1

andm1

>m*.31Chapter1TheEfficientAmountofRecycl31RefundableDepositsAmountofGlass$DPricefallstoP’andtheamountofrecycledglassincreasestoM*.SvSrSThesupplyofglassisthesumofthesupplyofvirginglass(Sr)andthesupplyofrecycledglass(Sr).M1PWithoutrefundsthepriceofglassisPandSrisM1.S’rS’P’M*WithrefundsSrincreasestoS’randSincreasestoS’.32Chapter1RefundableDepositsAmountofG32ExternalitiesandPropertyRightsPropertyRightsLegalrulesdescribingwhatpeopleorfirmsmaydowiththeirpropertyForexampleIfresidentsdownstreamownedtheriver(cleanwater)theycontrolupstreamemissions.33Chapter1ExternalitiesandPropertyRig33BargainingandEconomicEfficiencyEconomicefficiencycanbeachievedwithoutgovernmentinterventionwhentheexternalityaffectsrelativelyfewpartiesandwhenpropertyrightsarewellspecified.ExternalitiesandPropertyRights34Chapter1BargainingandEconomicEffici34ProfitsUnderAlternative

EmissionsChoices(Daily)Nofilter,nottreatmentplant 500 100 600Filter,notreatmentplant 300 500 800Nofilter,treatmentplant 500 200 700Filter,treatmentplant 300 300 600 Factory’s Fishermen’s Total Profit Profit Profit35Chapter1ProfitsUnderAlternative

Emis35AssumptionsFactorypaysforthefilterFishermenpayforthetreatmentplantEfficientSolutionBuythefilteranddonotbuildtheplantExternalitiesandPropertyRights36Chapter1AssumptionsExternalitiesandP36Bargainingwith

AlternativePropertyRightsNoCooperation Profitoffactory $500 $300Profitoffishermen $200 $500CooperationProfitoffactory $550 $300Profitoffishermen $250 $500 RighttoDump RighttoCleanWater37Chapter1Bargainingwith

AlternativeP37Conclusion:CoaseTheoremWhenpartiescanbargainwithoutcostandtotheirmutualadvantage,theresultingoutcomewillbeefficient,regardlessofhowthepropertyrightsarespecified.ExternalitiesandPropertyRights38Chapter1Conclusion:CoaseTheoremExter38CostlyBargaining---TheRoleofStrategicBehaviorBargainingrequiresclearlydefinedrulesandpropertyrights.ExternalitiesandPropertyRights39Chapter1CostlyBargaining---TheRole39ALegalSolution---SuingforDamagesFishermenhavetherighttocleanwaterFactoryhastwooptionsNofilter,paydamagesProfit=$100($500-$400)Filter,nodamagesProfit=$300($500-$200)ExternalitiesandPropertyRights40Chapter1ALegalSolution---Suingfor40ALegalSolution---SuingforDamagesFactoryhastherighttoemiteffluentFishermenhavethreeoptionsPutintreatmentplantProfit=$200FilterandpaydamagesProfit=$300($500-$200)Noplant,nofilterProfit=$100ExternalitiesandPropertyRights41Chapter1ALegalSolution---Suingfor41ConclusionAsuitfordamagesresultsinanefficientoutcome.QuestionHowwouldimperfectinformationimpacttheoutcome?ExternalitiesandPropertyRights42Chapter1ConclusionExternalitiesandPr42TheCoaseTheorematWorkNegotiatinganEfficientSolution1987---NewYorkgarbagespill(200tons)litteredtheNewJerseybeachesThepotentialcostoflitigationresultedinasolutionthatwasmutuallybeneficialtobothparties.43Chapter1TheCoaseTheorematWorkNegot43CommonPropertyResourcesCommonPropertyResourceEveryonehasfreeaccess.LikelytobeoverutilizedExamplesAirandwaterFishandanimalpopulationsMinerals44Chapter1CommonPropertyResourcesCommo44CommonPropertyResourcesFishperMonthBenefits,Costs($perfish)DemandHowever,privatecostsunderestimatetruecost.Theefficientleveloffish/monthisF*whereMSC=MB(D)MarginalSocialCostF*PrivateCostFCWithoutcontrolthenumberoffish/monthisFCwherePC=MB.45Chapter1CommonPropertyResourcesFish45CommonPropertyResourcesSolutionPrivateownershipQuestionWhenwouldprivateownershipbeimpractical?46Chapter1CommonPropertyResourcesSolut46CrawfishFishinginLousianaFindingtheEfficientCrawfishCatchF=crawfishcatchinmillionsofpounds/yrC=costindollars/pound47Chapter1CrawfishFishinginLousianaFi47CrawfishFishinginLousianaDemandC=0.401=0.0064FMSCC=-5.645+0.6509FPCC=-0.357+0.0573F48Chapter1CrawfishFishinginLousianaDe48CrawfishFishinginLousianaEfficientCatch9.2millionpoundsD=MSC49Chapter1CrawfishFishinginLousianaEf49CrawfishCatch(millionsofpounds)CCost(dollars/pound)DemandMarginalSocialCostPrivateCostCrawfishasaCommon

PropertyResource11.92.109.20.32550Chapter1CrawfishCatchCDemandMarginal50PublicGoodsQuestionWhenshouldgovernmentreplacefirmsastheproducerofgoodsandservices?51Chapter1PublicGoodsQuestion51Chapter51PublicGoodsPublicGoodCharacteristicsNonrivalForanygivenlevelofproductionthemarginalcostofprovidingittoanadditionalconsumeriszero.NonexclusivePeoplecannotbeexcludedfromconsumingthegood.52Chapter1PublicGoodsPublicGoodCharac52PublicGoodsNotallgovernmentproducedgoodsarepublicgoodsSomearerivalandnonexclusiveEducationParks53Chapter1PublicGoodsNotallgovernment53D1D2DWhenagoodisnonrival,thesocialmarginalbenefitofconsumption(D),isdeterminedbyverticallysummingtheindividualdemandcurvesforthegood.EfficientPublicGoodProvisionOutput0Benefits(dollars)12345678109$4.00$5.50$7.00MarginalCost$1.50EfficientoutputoccurswhereMC=MBat2unitsofoutput.MBis$1.50+$4.00or$5.50.54Chapter1D1D2DWhenagoodisnonrival,54PublicGoodsPublicGoodsandMarketFailureHowmuchnationaldefensedidyouconsumelastweek?55Chapter1PublicGoodsPublicGoodsandM55PublicGoodsFreeRidersThereisnowaytoprovidesomegoodsandserviceswithoutbenefitingeveryone.Householdsdonothavetheincentivetopaywhattheitemisworthtothem.Freeridersunderstatethevalueofagoodorservicesothattheycanenjoyitsbenefitwithoutpayingforit.56Chapter1PublicGoodsFreeRiders56Chapt56PublicGoodsEstablishingamosquitoabatementcompanyHowdoyoumeasureoutput?Whodoyoucharge?Amosquitometer?57Chapter1PublicGoodsEstablishingamos57TheDemandforCleanAirCleanAirisapublicgoodNonexclusiveandnonrivalWhatisthepriceofcleanair?58Chapter1TheDemandforCleanAirClean58TheDemandforCleanAirChoosingwheretoliveStudyinBostoncorrelateshousingpriceswiththequalityofairandothercharacteristicsofthehousesandtheirneighborhoods.59Chapter1TheDemandforCleanAirChoosi59TheDemandforCleanAirNitrogenOxides(pphm)0Dollars1234567810920002500300050015001000LowIncomeMiddleIncomeHighIncome60Chapter1TheDemandforCleanAirNitrog60TheDemandforCleanAirFindingsAmountpeoplearewillingtopayforcleanairincreasessubstantiallyaspollutionincreases.Higherincomeearnersarewillingtopaymore(thegapbetweenthedemandcurveswiden)NationalAcademyofSciencesfoundthata10%reductioninautoemissionsyieldedabenefitof$2billion---somewhatgreaterthanthecost.61Chapter1TheDemandforCleanAirFindin61PrivatePreferencesforPublicGoodsGovernmentproductionofapublicgoodisadvantageousbecausethegovernmentcanassesstaxesorfeestopayforit.Determininghowmuchofapublicgoodtoprovidewhenfreeridersexistisdifficult.62Chapter1PrivatePreferencesforPublic62DeterminingtheLevel

ofEducationalSpendingEducationalspendingperpupil$0Willingnesstopay$$1200$600$1800$2400W1W2W3AWTheefficientlevelofeducationalspendingisdeterminedbysummingthewillingnesstopayforeducationforeachofthreecitizens.63Chapter1DeterminingtheLevel

ofEduca63DeterminingtheLevel

ofEducationalSpendingEducationalspendingperpupil$0Willingnesstopay$$1200$600$1800$2400W1W2W3AWWillmajorityruleyieldanefficientoutcome?W1willvotefor$600W2andW3willvotefor$1200Them