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Re: Economists on ecology (Re: GOODBY MIKE!)
auld@qed.econ.queensu.ca wrote:
in response to the argument that we are .. "running out" of resources:
Jay, the activities humans choose to undertake depend critically on the
incentives they face. The incentives they face in many cases -- and in
particular in the case of resource extraction -- depend on prevailing
and expected prices. Hence, the impact humans have on the environment
_does_ depend on the behavior of markets.
Consider an analogy. Mathematical epidemiology generally takes rates of
contact as given when modeling the spread of a disease. Economists
point out that that assumption is wrong in the case of many diseases (for
instance, AIDS): as the probability of becoming infected rises, people
will respond to the change in incentives by changing their behaviour,
thereby affecting the course of the disease. Thus, a model which failed
to account for behavioral change would give misleading predictions.
Similarly, an ecological model which fails to account for the fact that
people will change their behaviour as prices change will be misleading.
Shameless plug: people might also be interested in my paper "Choices,
Beliefs, and Infectious Disease Dynamics," Queen's Working paper #938,
October 1996.
> --
> Chris Auld Department of Economics
> Internet: auld@qed.econ.queensu.ca Queen's University
> Office: (613)545-6000 x4398 Kingston, ON K7L 3N6.
Hi,
An excellent point. Did you see that the Nobel Prize in Economics this
year went to James Mirrlees and William Vickery for their work on just
this topic: how behavior chamges in response to changes in incentives.
Look at the "Laffer Curve" thread on a.p.e
PS is your paper available "on line"?
And I will plug my web page: see "Price and Pollution"; it IS "on line"!
--
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jim blair (jeblair@facstaff.wisc.edu)
for a good time, call http://www.execpc.com/~jeblair/
References: