Driving in Dublin

With cities throughout the world making attempts to increase the speed of city centre traffic because of congestion, Dublin City Council have announced plans to slow down traffic in a large area of the city centre.

The map above shows most of the areas that will be subject to the new speed restrictions.  Click the image to enlarge.  The pink shaded areas were the original extent of the 30kph zone.  The yellow areas reflect the new extended 30kph sone from 31st of January.  Is this a worthwhile initiative?

Tweet

Keynes versus Hayek - The Rap

In this short news segment Lord Skidelsky and Russel Roberts discuss the opposing views of John Maynard Keynes and Friederich von Hayek.  We also get a early preview of rap Roberts is writing on the Keynes versus Hayek debate.



The rap is now completed and has been posted to ever reliable Youtube and is available below the fold.
Tweet

Tragedy of the Fishes

In 1968 Garret Hardin published a highly influential article in Science called The Tragedy of the Commons.  A PDF reprint of the article is available here.

You can read Chapter Ten from John McMillan's super book on markets, Reinventing the Bazaar, here.  The chapter deals with externalities and considers three examples of externalities

• Driving and Congestion
• Overfishing and Decling Fish Stocks
• Wages in Sport and Competitive Balance

McMillan describes how market forces can be harnessed to correct externalites.  He looks at the congestion pricing cure to traffic jams and looks at the various input and output methods used to try and address overfishing.  Get an understanding of the commons problem by playing The Tragedy of the Bunnies online.

An excellent artice was on conservation methods in fisheries was published in The New York Times Magazine a few years ago.  A Tale of Two Fisheries looks at formal and informal conservation methods.  Some quotes from it are used by John McMillan.  For example:
Tweet

Intelligent Tolls

When a driver uses a busy road he is imposing a delay cost on all other drivers.  However, as road users we do not take the costs we impose on others into account, thus roads like most common resources are over used and society is worse off.

Road pricing is a method to try and internalise the costs drivers impose on others and to encourage more efficient use of the road network.  London use a congestion charge for cars entering the centre of London, and makes some mild claims about it's effectiveness.  The problem with the London congestion charge is that it is too blunt a tool.  It is a fixed charge that does not respond to demand and increased congestion.  When roads are moving freely the congestion charge should be low, when roads are choked the charge should be high to encourage drivers to find alternatives.  This is the basis of Vickrey congestion pricing.

Singapore is one of the best examples of Vickrey pricing in action.  Here is a recent report from the Financial Times and the video below the fold gives a television news report on the charges.
Tweet

Water, water everywhere, but no one stops to think

When the "Big Freeze" peaked about 10 days ago the response of many households was to leave taps running in an effort to prevent pipes freezing and cutting off the water supply to the house. For the individuals in question, this was an entirely rational thing to do. The benefit was continued access to water and no cost to themselves.

However, society incurred a huge cost of this action through what we would call a consumption externality. The cost to society of all the water wasted as thousands of taps were left running. There is no individual incentive to conserve water in Ireland. Remarkably for a country that rarely suffers from a shortage of rain we are in the midst of a water shortage. People leaving taps running during the cold spell now means that we are rationing water.
Tweet