Linklist: August 24, 2011

Richard’s Real Estate and Urban Economics Blog: Cost and benefit: “I listened to a colleague of mine on Friday discuss how nothing adds to our carbon footprint like flying-and I have little doubt that he is right. Mark Twain one wrote, “Travel is fatal to prejudice, bigotry, and narrow-mindedness.” I am pretty sure that is right too.”

Richard’s Real Estate and Urban Economics Blog: Two cents (or maybe a nickle) on Texas.: “In an ideal world, we would run some regressions explaining Texas’ growth, but we haven’t sufficiently up-to-date data to do that.  We do know that some things matter in general for growth: climate (which I don’t think even Rick Perry is claiming credit for); fraction of the population with a BA, and, if I may refer to work I did five years ago, availability of air transportation. Texas does well in two out of three indicators: since World War II, people and jobs have moved to warmer places such as Texas, and Dallas is a hub for two airlines and Houston is a hub for one.  Texas is below average, however, in the share of adults with BAs and graduate degrees. “

Knowledge Problem: Raising MPG standards, part 1: Morris is not persuasive in his claim that CAFE works: “At the Freakonomics blog, transportation scholar Eric Morris favors President Obama’s recent deal to dramatically raise CAFE standards (Corporate Automobile Fuel Economy standards) by 2025. A gasoline tax would be far superior public policy, he said, but it won’t work politically. Because he thinks CAFE standards do work, technically and politically, he said we should go with this “second-best solution.” … the average of measured “car” and “truck” CAFE levels (labelled “both” in the chart) fell faster than either the car or truck level. How is it possible that the average of two data series fell faster than either of the component data series? Because “both” is a weighted average, and as gasoline prices stayed low consumers limited by their options in the more-tightly-regulated automobile category simply switched into light trucks (i.e., minivans and SUVs). Automakers, too, feeling constrained by CAFE standards, pushed consumers to make that shift. What exactly are the policy benefits from driving consumers out of station wagons and into SUVs and minivans of similar fuel economy performance? CAFE “worked” when it has a supporting high gasoline price environment, but I suspect that the gasoline prices were doing most of the heavy lifting.”

Knowledge Problem: Raising MPG standards, part 2: Morris well explains the relative advantages of raising the gasoline tax : “Sure, we can counter a call for higher gasoline taxes with a long list of negative consequences. The point is that an energy tax is relatively speaking transparent and efficient. However harmful a higher gasoline tax is, a CAFE regulation aiming at the same effects would be ten times (rough guess) more costly.”