Good blog. The theory of negative externalities is really silly if not supplemented by an ethical theory which makes clear which externalities may or may not be taxed. It is the same reasoning with public goods too. Pretty girls in public streets are positive externalities, yet I doubt many would advocate to subsidies them going out to e…
Good blog. The theory of negative externalities is really silly if not supplemented by an ethical theory which makes clear which externalities may or may not be taxed. It is the same reasoning with public goods too. Pretty girls in public streets are positive externalities, yet I doubt many would advocate to subsidies them going out to ensure the optimum supply. Or tax the obese and ugly to keep them inside.
I agree, but that still understates it. As poor as the measurement and justification of a reaction to an externality may be, there is no mechanism to try to measure the private costs of a tax or subsidy. At best it is incomplete. We can at least think of a model of market behavior that urges people to prioritize what is most important to them. Is there anything similar when it comes to externality?
To be fair the market already rewards attractiveness. For women, and only for women, a healthy body weight is correlated with a higher salary, because male (and possibly also female?) bosses will hire or promote hot workers, all other things being equal.
Well, sure, but that only captures the benefit to people who interact economically with them. The positive externality is *on top of that*, to the other people who get to see them in public places for free.
Good blog. The theory of negative externalities is really silly if not supplemented by an ethical theory which makes clear which externalities may or may not be taxed. It is the same reasoning with public goods too. Pretty girls in public streets are positive externalities, yet I doubt many would advocate to subsidies them going out to ensure the optimum supply. Or tax the obese and ugly to keep them inside.
I agree, but that still understates it. As poor as the measurement and justification of a reaction to an externality may be, there is no mechanism to try to measure the private costs of a tax or subsidy. At best it is incomplete. We can at least think of a model of market behavior that urges people to prioritize what is most important to them. Is there anything similar when it comes to externality?
I disagree.
Imagine if there was a referendum on whether the government should be required to hire beautiful women to go out.
I would guess that the vast majority of people would vote against this measure.
There are two reasons:
1. Many people hate seeing beautiful women on the road.
2. Many people think that the government's money is better spent elsewhere.
So this example is seriously wrong.
To be fair the market already rewards attractiveness. For women, and only for women, a healthy body weight is correlated with a higher salary, because male (and possibly also female?) bosses will hire or promote hot workers, all other things being equal.
Well, sure, but that only captures the benefit to people who interact economically with them. The positive externality is *on top of that*, to the other people who get to see them in public places for free.