Monday, 30 November 2015

Who Says that Markets 'Fail' to Price in Externalities?

Good little vignette here that pleases me on so many levels.

1.  It is clear that house, aka land, prices suffer a reduction compared to similar locations if they are on a busy road.  That is the market is pricing in the externality.  Well.  Well.  Who'd a thunk it?

2.  DA is just another rent seeking homeownerist looking after No. 1.

3.  What's more DA appears to be using her position to further the scheme that will enhance her personal land value. Allegedly.  It cheers me up no end to see that cronyism is alive and well in JC's acolytes.


I was so gleeful at fatties cronyism and hypocrisy that I did not set out this post as well as I should have done - as MW pointed out.

Obviously the cost of the externality is not falling on the traffic using fatty's street.  But there is a lower price for living in that street.  And since that price will rise when the traffic is magiked away by said fatty's mates there is clearly some price discounting going on by the market because of the traffic blight. I call that the market succeeding, albeit not in the way that actually penalises the polluters for their externality.



Mark Wadsworth said...

No, pollution is an externality from the point of view of the motorist, not the point of view of the polluted person or land.

But yes, she's a fat Homey shit like the rest of them.

Bayard said...

"cronyism is alive and well in JC's acolytes."

If JC managed to take the cronyism out of politics, he'd be gone so fast that there'd a pop as the air rushed in to fill the vacuum.