The Negative Externalities of Blondes

Blondes apparently make men dumber. What are the policy implications?

1. Place a tax on blond hairs, encouraging women to dye their hair another color.
2. Pay subsidies to men who are frequently surrounded by blond women. (Economists will probably point to endogeneity problems outside the laboratory.)
3. Regulation: Ban blond hair. Inevitably deal with the problem of defining the color.
4. Assign property rights over women's hair color to either women or men.

Feel free to post your own suggested policies to the comments below. This is all tounge-in-cheek of course. I would also argue the existence of an adverse effect on male intelligence suggests there is a positive externality occurring on men, one which might swamp the adverse effect on intelligence. (Hat Tip: Division of Labour)

Capitalization and Naked Twister

An article on CNN.com details the dispute in Duncanville, Texas, a suburb of Dallas that illustrates several important points about local government that we have discussed over the last two days of class. The issue is one of the homes frequently hosts "swinger" events that draws a significant number of patrons and drawn the ire of the other locals.

Retiree Jack Martin, who lives a block behind Trulock's home, said he's concerned that the parties will reduce the value of his property.

As discussed in class, homeowners concern for the value of their property drives local government behavior, and that can be clearly seen from the points in the article. The local government officials are carefully trying to toe the line on this issue by repeatedly saying they are not interested in intervening in the private life (a signal that would hurt property values), but rather trying to prevent the nuisance of noise, traffic, and parking problems occurring in the area on the nights of these events (which also hurt property values).

Final Exam & Final Homework

The Final Exam is Thursday, December 12th, from 3:00-5:00. The review sheet explains the details of the exam.

The Last Homework was due Friday, December 7th in class. I e-mailed those who have turned it in already the solutions. If you do not plan on turning the assignment in late, e-mail me and I will send it to you.

Public Choice Features in Region Focus

The current issue of Region Focus, a publication of the Richmond Bank of the Federal Reserve, has a pair of interesting articles regarding Public Choice Economics. The first is a discussion of the theory itself, which is very readable for undergraduate economists. It discusses Bryan Caplan's new book The Myth of The Rational Voter: Why Democracies Choose Bad Policies. I'm not yet on-board with his arguments, but I have not yet finished the book and I do think it is an interesting alternative way of thinking about democracy beyond the traditional median voter framework that I teach in Micro.
The second article is of interest to WVU students, as it is an interview with our own Russell Sobel about a variety of his best research: Why FEMA fails (he wrote pre-Katrina), testing for the magnitude of the incentive to drive more dangerously when safety regulations are increased, Why West Virginia is poor, and does Wal-Mart destroy small businesses.

301 Exam II

Wedneday, 10/31/2007. We will have a review day on Monday. A review sheet will be posted on the course webpage. Bring a calculator if you need one. You do not need to bring scantrons.

If I receive any good questions concerning the material in the test, I will post them as a comment under this post.

China to Regulate Reincarnation

Seriously.

Painfully Predictable

Communist China and Socialist Venezuela have just passed the U.S. in income inequality. That is, the two have greater income inequality than us.

Not unrelated, Venezuela's brilliant leader figures he'll close out a career of shutting down government checks and balances with a lifetime position has head hancho.

There was no need for Vegas to try and give odds for either of those outcomes, they're pretty much gurantees.

"The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both". ~Economist Milton Friedman