Transactions costs and the optimal instrument and intensity of air pollution control

Conclusions To what extent do the transactions costs of implementing alternative instruments for pollution control affect the choice of the optimal instrument and the efficient intensity of control under that instrument? In a comparison of Least-Cost Regulatory Standards and Revenue-Neutral Pigouvian Taxes, it is the higher transactions costs of implementing the taxes that make Pigouvian Taxes the more costly of the two instruments. However, a more practical comparison of instruments is between Politically Feasible Standards, Marketable Discharge Permits, and Revenue-Raising Pigouvian Taxes. Here, the relationship between the transactions costs of implementation and total pollution costs are in an almost linear inverse relationship. The lower the pollution costs associated with a particular instrument, and therefore the more desirable the instrument, the higher the transactions costs of implementation. Other factors such as political distortion and welfare gains prove to be more important than the transactions costs of implementation.Assuming that variable transactions costs decrease with the optimal level of pollution for regulatory standards but increase with the optimal level for market oriented instruments, an accounting of transactions costs results in less stringent control in the case of regulatory standards and more stringent control in the case of market oriented instruments. However, the percentage effect is very small. Moreover, it is smaller in both cases if marginal pollution damage rises with the level of pollution, as it is usually presumed to do, rather than remain constant as assumed in this paper for purposes of aggregation. A major conclusion of this paper is that Pigouvian Taxes are the superior instrument for pollution control when the raising of public revenues is a desired objective. However, the various conclusions of this paper should be viewed as tentative because the data on which they are based are no longer current. Moreover, the critical estimates of transactions costs are somewhat dubious. It is hoped that new data will be collected for answering the questions raised in this paper. When this is done, a more powerful approach, one that obviates the need for the artificial, one-dollar-damaging, aggregate pollutant, would be an expanded linear programming model in which the transactions costs are treated as separate coefficients of the individual pollution control methods. Separate sets of such coefficients, each corresponding to a different policy instrument such as Least-Cost Regulatory Standards, Revenue-Neutral Pigouvian Taxes, etc., would enable the investigator to directly derive solutions that specify the optimal policy instrument as well as the optimal set of pollution control method activity levels.I am grateful to William Ascher, Murray Weidenbaum, and two anonymous referees for helpful guidance on the paper.     

Recent developments in medicine and law

This article addresses important developments in the field of medicine and law during the period of September 2000 through August 2001. It does not discuss every reported case or piece of legislation but surveys some of the more significant developments in the medicine and law arena.     

The Nasty Business of Aging

Hartog, Hendrik. 2012 . Someday All This Will Be Yours: A History of Inheritance and Old Age . Cambridge MA: Harvard University Press. Pp. 353. $29.95 cloth. This essay explores the contribution of Hendrik Hartog's Someday All This Will Be Yours to an understanding of old age policy and the aging experience more broadly. It starts by discussing how Hartog's study contributes to a modern understanding of the legal structure surrounding old age. It then discusses how the narrative is colored, in part, by looking at the cases from a caregiver's perspective, and explores the implications of this perspective. Finally, it suggests avenues for building on Hartog's work by using modern legal cases to explore how courts today perceive the moral and legal obligations surrounding the duty to provide care.