The cost of streetlighting
Ask any student to give an example of a public good and the default answer seems to be “streelighting” - I will pass on whether streetlighting for urban roads and motorways meets precisely all of the defining characteristics of a public good (it surely comes close!) - but this BBC online magazine article provides an interesting follow up question for students - how much does it cost to provide such services on a daily basis. Perhaps a good example to use when discussing the costs and benefits of providing public goods?
The Costs of Cutting Carbon
Susan Watts from Newsnight has this excellent short video on some of the findings of the Committee for Climate Change and some of the costs and benefits of meeting stringent carbon reduction targets.
Last week the Financial Times ran a special feature on Climate Change and Business. Their climate change series is available here.
Cheap drinks and government intervention
This BBC clip covers an announcement in the Queen’s Speech about policy proposals contained within a new Crime and Policing Bill to curb the flood of cheap drinks promotions offered by pubs and clubs which the government believes contributes to binge drinking. The Telegraph reports that
“Retailers will not be able to sell any alcohol cheaper than the price of buying one item of it, no matter how many more a customer buys. It means there will be a ban on offers such as two for ones, three bottles of wine for £10, or discounted multipacks of beer where the overall cost is cheaper than the sum of the individual bottles or cans contained.”
A seasonal hat tip to Ben White for spotting the article and for suggesting a number of economic concepts and policy issues that the article might be used to illustrate in a group discussion:
Pricing Incentives and price discrimination
Importance of price elasticity of demand e.g. if minimum drinks prices are imposed
Market Failure - externalities from consumption, alcohol disorders and de-merit goods
Regulation and Legislation - effectiveness and costs of regulatory policies
Risks of government failure including the law of unintended consequences
Social Issues
Economies of Scale - Giant Wind Farms
This BBC article on the granting of permission for a giant wind farm off the coast of North Wales might be a good example of the importance of economies of scale in making renewable sources of energy more cost efficient. And heading to the web site of the Gwynt y Môr Offshore Wind Farm accesses some resources on the potential costs and benefits of a scheme that might provide electricity for up to 500,000 homes. If construction goes to plan, the wind farm will start to produce power from 2012.
Standing on the shoulders of giants
It strikes me that we have probably already reached a critical mass for a wide and ever-growing range of open source software products. The BBC’s iPlayer is now cross-platform. Google is based almost entirely on open source software. And Specsavers, one of Britain’s largest private companies with a network of over 1,000 stores (growing at two a week) has built its entire infrastructure on open source. What is true for Specsavers also holds for Pepsi Co and Pixar. Mozilla Firefox, Linux, Moodle and Apache web servers have come of age and are sympotmatic of an age of collaborration and rapid innovation within the open source community.
read more...»Back to the cave or a brave new world?
I popped over to a meeting of Eton’s Geography Society tonight to hear a talk from Mike Mason, the climate change entrepreneur and founder of Climate Care the carbon offsetting business which has recently been swallowed up by JP Morgan Chase to form part of their JPMorgan’s Environmental Markets group.
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Sky news focuses on the NHS
I usually have Sky news running in the background and this week their newsroom has been running a series of reports on the condition of the National Health Service and the financial pressures facing state health care in a world of ever-changing health needs and wants, the emergence of new treatments and the daily inevitability of health care rationing. Many of the features are ideal for those using health care as a case study in scarcity, resource allocation, cost benefit analysis, positive and normative economics and market demand and supply of health services. Here is the main link Among the articles and videos is an emotional one with the darts legend Andy Fordham, who is battling to have a liver operation.
End tobacco smoking by 2025?
Could we end the smoking of tobacco in the Uk within a generation. On first glance it looks like one of those utterly grandiose targets that New Labour used to launch (and re-launch) such as abolishing Child Poverty by 2020. But this ultra-ambitious target comes from the Royal College of Physicians who argue that radical measures are needed to curb smoking. They argue that “The primary objective of regulation of smoked tobacco should be to make smoking and smoked tobacco products as unappealing, unattractive, unaffordable and unavailable as possible, as quickly as possible.”
The measures include:
Increase the tax on tobacco by 10% every year
License tobacco retailers and prohibit the sale of smoked tobacco in premises where children are admitted
Crack down on tobacco smuggling, and apply Class A drug penalties for tobacco smuggling and under-age sale
Encourage sale of low cost single day nicotine packs, available from any retail outlet
Permanently exempt medicinal nicotine from VAT
Provide free medicinal nicotine for all smokers on the NHS, not just those on a smoking cessation programme
What do you think?
Ending Tobacco Smoking in Britain is available here
Does Manchester need a congestion charge?
Is the question asked by the Independent in their Big Question this morning. More can be found here. I rarely travel to Manchester save for Tutor2u student workshops and the occasional sporting event. Last time I was there I stayed on the 22nd floor of the Hilton building - an impressive addition to the Manchester skyline and was afforded a great view of the Manchester tram system in action. I wasn’t aware that traffic congestion was that bad in the city centre, although they seem to be digging up half of the main roads. But this will be a superb example to use for teachers wanting an example of cost-benefit analysis and the arguments of different stakeholders.
More here from the BBC news
Flood defences, cost benefit and opportunity cost
Money spent on flood defences both here in the UK and overseas raises plenty of interesting questions relating to the use of cost benefit analysis and the opportunity cost of public money. What are the external costs and benefits of flood defence schemes? Are flood fences a pure public good? Who should pay for them? There have been several excellent news articles and video clips on this issue on the BBC web site in recent days - here is a selection
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