IPE and the Environment

Question 1

An Economist Gets Lunch by Tyler Cowen

Answer 1

(a) people prefer to be wasteful than feel wasteful
(a. i) sunk costs
(a. ii) ex: spending lots of time online trying to find a marginally cheaper pair of shoes

(b) paper v. plastic
(c) locavore (vegetarian conventional eater uses less energy than a locavore meat eater)
(d) boycotts: most effective when we are most unlikely to do them (a declining company with a good reputation)

Question 2

Policy Suggestions

Answer 2

(a) carbon tax v. regulation
(b) cut back on minimum parking requirements in suburban developments
(c) ease zoning restrictions in high density areas (fewer commuters)
(d) eliminate all subsidies to large agri-business