Coase & Property Rights
Northwestern University - Mark Witte
Who is who?
Econ 370 - Witte
Three market based ways of
Pigou 1920: Tax brings efficiency, "Polluter pays"
Coase 1960: Efficiency from
Land and Location
Von Thunen concentric circle of farm production the farther you get from the city, the
more expensive it becomes to transport crops BUT the price of land decreases!
Can be generalized to rent in a city it may be more convenient and times
Coase Theorem: Problem with Polluter Pays Principle Is it clear who
is the producer of the pollution?
Does my noise harm you, or does your excessive need for quiet
Externalities and Coase, one of the most influential articles in the fie
Suppose that we are considering revising how we use Mt. Rushmore. We could leave it
as it is, go green and restore it to its natural state, or we could develop it as a ski resort.
How we feel about what choice we make depends a lot on what happens