Glamour at UCLA's Institute of the Environment

This was quite a fundraising  event for the UCLA Institute of the Environment.  It shows that UCLA may be able to raise $ in places not called Sacramento.  As I have said before, give free markets a chance!

The KPCC Radio Show on Climate Adaptation

In case you missed it, here is the video  from last night's KPCC discussion about adaptation to climate change.  I enjoyed my trip to Pasadena and made several new friends with folks in the audience.  As Basic Books prepares to release the paperback version of Climatopolis, I'm encouraged that serious talk about the microeconomics of adaptation has started to take place.   My 2010 book received a lot of negative press for the wrong reasons.  At that time, "adaptation" was a dirty work that was equated with defeatism.  Environmentalists didn't want to hear from a free market environmentalist.  After the 2012 Election, people have calmed down and are willing to have a spirited debate about new ideas for achieving the win-win of economic growth and adapting to the new threats that we have unleased.  

Yahoo Offers 4 Natural Experiments

The 1990s were the golden age of the "natural experiment".  Today, the NY Times reports that Yahoo is offering ambitious young researchers three natural experiments to study at the same time.  The young CEO of that company has mandated free food in the Yahoo cafeterias.   Economics makes 4 lofty predictions about the effects of the free food.

• Yahoo employees will eat more during the work day (the law of demand)
• Yahoo workers will gain weight (hyperbolic discounting, unless workers reduce their food consumption at other points in the day when they face the marginal cost of purchasing their own food).
• Yahoo employees will talk more face to face and this will lead to new ideas at the firm (social interactions is good for idea permutation)
• Yahoo will be able to attract and retain better workers at the same wage (compensating differentials)

This blog post is meant to show you how a non-experimental science runs experiments even when we don't have the resources or the subject pool to run a field experiment.  The old "double-difference" is a powerful research tool.

The Truth Hurts

At a recent UCLA Ziman Real Estate Center Conference, this flattering photo was taken of the back of my head.




Say what you want about me but I can take a punch.

Are Green Cities Elitist?

What do cities such as Boston, Boulder, CO, New York City, Seattle, San Francisco, Portland and London have in common?   These green cities are aesthetically pleasing and housing is quite expensive.  What happens to the urban poor and middle class in such cities?  Did the incumbent land owners in such cities intentionally pursue "green city" policies to simultaneously improve their city's quality of life and to gentrify their city in order to shape who their neighbors would be?  I believe that the answer to this question is "yes" but this is difficult to conclusively demonstrate.  You can read my 2011 Journal of Urban Economics or my 2010 Journal of Housing Economics paper on this broad subject.

A similar dynamic is now playing out in Africa in Nigeria's mega city Lagos.   Here is a good quote from the NY Times Article: 

"Under Lagos’s energetic governor, much lauded in the international financial media, this crowded megalopolis of high rises, filthy lagoons, fierce traffic jams and sprawling slums, home to perhaps 21 million people, has proclaimed its ambition to become the region’s, if not Africa’s, premier business center.

Infrastructure and housing projects abound, including a light-rail network whose trestles already vault crowded neighborhoods, and a vast upmarket Dubai-style shopping and housing development built out into the Atlantic Ocean, inaugurated last week by former President Bill Clinton. A new Porsche dealership has opened in the financial district.

In this gleaming vision, the old Lagos of slums has an uncertain future. Two-thirds of the city’s residents live in “informal” neighborhoods, as activists call them, while more than one million of the city’s poor have been forcibly ejected from their homes in largely unannounced, government slum clearances over the last 15 years, a leading activist group says.

The government is clearing slum land, evicting the poor squatters and erecting new shiny skyscrapers.  This is  progress but is it fair?  What will become of the squatters?  What is the intent of the government?  Did these squatters have de facto property rights to the land?     Will these individuals gain better employment opportunities as the shiny city is built?  What happened to the Coase Theorem here?

We need longitudinal data to trace out how the urban poor's residence location, work location and income dynamics are affected by urban gentrification.