PAM_4380_march_2_2011 - March 2, 2011 Prelim #1: Friday 4...

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March 2, 2011 Prelim #1: Friday 4 shorter questions (True-False-Uncertain) 3 longer questions Empirical methods Prohibitions Today (not on exam) smoking bans & externalities Root causes/ Coase theorem
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Externalities from Second Hand Smoke "In 2005, it was estimated that exposure to secondhand smoke kills more than 3,000 adult nonsmokers from lung cancer, approximately 46,000 from coronary heart disease, and an estimated 430 newborns from sudden infant death syndrome. In addition, secondhand smoke causes other respiratory problems in nonsmokers such as coughing, phlegm, and reduced lung function." (2006 Surgeon General’s Report) One study estimated that food service workers face a 50% higher risk of dying from lung cancer, partly due to their workplace exposure to secondhand smoke (Siegel 1993)
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Are smoky public places really a market failure? Smoking bans seem to address a clear market failure: the negative externalities created by secondhand smoke Nobel-laureate Ronald Coase: external costs arise due to Poorly defined and/or enforced property rights and/or
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PAM_4380_march_2_2011 - March 2, 2011 Prelim #1: Friday 4...

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