Theory and Measurement of Economic Externalities

1st Edition - January 28, 1976
Editor: Steven A. Y. Lin
Language: English
eBook ISBN:
9 7 8 - 1 - 4 8 3 2 - 7 1 4 7 - 7

Theory and Measurement of Economic Externalities provides information on some analytical and empirical developments in the field of externalities. This book presents the function… Read more

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Theory and Measurement of Economic Externalities provides information on some analytical and empirical developments in the field of externalities. This book presents the function of turning out producer's goods in the form of better knowledge, analytical formulation, and approaches for application to current problems. Organized into five parts encompassing 12 chapters, this book begins with an overview of the notion of externalities in connection with analyses of economic welfare. This text then discusses the relationship between publicness and external diseconomies when either consumption or production or decision sets are nonconvex due to a high degree of externalities. Other chapters consider disproving the pessimistic conclusions concerning tax–subsidy schemes. This book discusses as well the solutions for the allocation of resources in an economy with public goods and interdependent preferences. The final chapter deals with a general framework for estimating externality production functions. This book is a valuable resource for economists.

List of Contributors

Preface

Part I Introduction

Part II The Nature of Externalities

On the Nature of Externalities

I. Introduction

II. Externality as Absence of Markets

III. Publicness of External Diseconomies

IV. Exclusion at a Cost

V. Pecuniary Externalities

VI. The Definition of Externalities

VII. Remedies

References

Discussion

I. What Are Externalities?

II. Some Theoretical Observations

III. A Discussion of Remedies

IV. Conclusion

References

The Problem of Social Cost: Fifteen Years Later

I. Introduction

II. The Coase Theorem

III. Transactions Costs and the Definition of Externality

IV. Optimal Liability

V. Transactions Costs and the Incidence of Liability

References

Discussion

References

Part III Externalities in Collective and Decentralized Decision Making

Externality Taxes and Subsidies

I. The Model

II. An Optimal Tax-Subsidy Algorithm

III. Theorems on Taxes and Subsidies

IV. Conclusions

References

Discussion

References

Information, Incentives, and the Internalization of Production Externalities

I. Introduction

II. The Coordination of External Decisions of Many Firms

III. A General Solution of the Coordination Problem

Appendix: On the Uniqueness of the Truthful Message Equilibrium

References

Discussion

Reference

A Generalized Cost Allocation Scheme

I. Decomposition of a Game

II. Generalized Value of a Game

III. Definition of Weights

IV. Incremental Values

V. Value, Imputations, and the Core

VI. A Cost Allocation Example

VII. Conclusions

References

Discussion

Part IV Externalities in General Equilibrium

Collective Choice and the Lindahl Allocation Method

Introduction

I.

II. The Existence of Lindahl Equilibrium

III. Special Lindahl Equilibria

IV.

V.

VI. Conclusion

References

Discussion

References

Pairwise Optimality, Multilateral Optimality, and Efficiency with and without Externalities

I. Introduction

II. The General Equivalence Theorem for Exchange with Externalities

III. Production-Exchange Economics

IV. Interindustry Production

V. An Example of Nonequivalence

VI. Pareto Optimality for Societies with Bilateral Externalities

VII. Pareto Optimality with Multilateral Externalities

References

Discussion

Noncooperative General Exchange

I. Background

II. A New Approach with Applications to Externalities

III. The Basic Model

IV. The Edgeworth Box

V. Variants

VI. Two Theorems

References

Discussion

Part V Measurements of Externalities

The Measurement of Individual Congestion Costs: An Economic Application to Wilderness Recreation

I. Introduction

II. A Generalized Model for the Measurement of Congestion Effects

III. Experimental Design and Sampling

IV. Estimated Willingness to Pay Functions

V. Conclusions

References

Discussion

An Economic Model of Airport Noise Pollution in an Urban Environment

I. Scaling Individual Reaction to Noise

II. The Demand for Housing and the Implicit Demand for Quiet

III. Equilibrium in the Housing Market

IV. The Empirical Model

References

Discussion

Fiscal Externalities, Taxes, and Suburbanization

I. Introduction

II. An Urban Model with Property Taxes

III. Empirical Results

IV. Conclusion

Appendix: Notation

References

Discussion

References

Externality Production Functions

I. The Theory of Externalities in Production

II. Framework for Estimation of Externality Production Function Specification of the Generalized Joint Production Model for Empirical Estimation

References

Discussion

Index