Wednesday, 19 February 2020

Are rights always right?

The Winter 2020 issue (vol. 34, no. 1) of the Journal of Economic Perspectives contains an article that looks at The Consequences of Treating Electricity as a Right, by Robin Burgess, Michael Greenstone, Nicholas Ryan and Anant Sudarshan (pp. 145-69).

Abstract
This paper seeks to explain why billions of people in developing countries either have no access to electricity or lack a reliable supply. We present evidence that these shortfalls are a consequence of electricity being treated as a right and that this sets off a vicious four-step circle. In step 1, because a social norm has developed that all deserve power independent of payment, subsidies, theft, and nonpayment are widely tolerated. In step 2, electricity distribution companies lose money with each unit of electricity sold and in total lose large sums of money. In step 3, government-owned distribution companies ration supply to limit losses by restricting access and hours of supply. In step 4, power supply is no longer governed by market forces and the link between payment and supply is severed, thus reducing customers' incentives to pay. The equilibrium outcome is uneven and sporadic access that undermines growth.
Making something a "right" can have negative unintended consequences.

Saturday, 8 February 2020

Bernie Sanders and the disastrous rent control plan

Rent controls really are a bad idea.
There isn’t much disagreement among economists about what a national rent control policy would do to harm renters, housing prices, housing stock, and the incentive to build new housing. Nonetheless, Bernie Sanders persists. Ryan Bourne comments.

Monday, 13 January 2020

Sir Roger Scruton (1944-2020)

From Uncommon Knowledge comes this interview of Sir Roger Scruton by Peter Robinson.
Sir Roger Scruton was an English writer and philosopher who published more than fifty books in philosophy, aesthetics, and politics. His book discussed in this episode was How to Be a Conservative; it was published in 2014. He is a fellow of the British Academy and a fellow of the Royal Society of Literature. He teaches in both England and America and is a senior fellow at the Ethics and Public Policy Center, Washington. DC. He is currently teaching an MA in philosophy course for the University of Buckingham. Sir Scruton was knighted in 2016 by Queen Elizabeth II for his “services to philosophy, teaching and public education.”

Saturday, 21 December 2019

Empirical literature on the firm

From LearnIOE comes this video of Professor Peter Klein discussing the empirical literature on the firm.
The research literature on the economic theory of the firm has greatly expanded in the last several decades. But what is not as well known is that there is a growing empirical literature to go along with that theoretical body of work. In this video, Professor Peter Klein summarizes some of the empirical work that has been done so far and discusses its advantages and weaknesses. He hopes to inspire some of you to do additional empirical research in this area.

Thursday, 19 December 2019

The year in review: from the IEA

From the IEA in London comes their annual review of the last year:
Find out in our round-up of 2019, who the IEA’s Director General Mark Littlewood, Associate Director Kate Andrews and Head of Lifestyle Economics Christopher Snowdon’s Person of the Year is, the trio’s Favourite Film of the Year is, their Political Moment of the Year and their Top Prediction for 2020