Barry C. Field

The Optimal Commons

Much of the work on problems of open-access and common-property natural resources has been focused on deducing and documenting the pathologies of inefficiency to which these resources are prone. Another important job has been deriving policy conclusions; the main one being, perhaps, that productivity will improve in proportion to the speed with which a change is made to individual, or something that behaves like individual, ownership. In making these prescriptions our kit bag of institutional forms contains depressingly few items; in fact, it contains just two: common and individual. We have a situation analogous to one we had in the 1950s, when all goods were divided into two types: private and public. But the space between these two goods types was soon filled in with an infinity of intermediate forms. It is only fair that we fill up the comparable space in the property institutions continuum.

External Costs from Increased Island Visitation: Results from the Southern Thai Islands

Recreational development on islands is often subject to open-access conditions. In the absence of control over aggregate visitation levels, external effects among visitors would lead to visitation rates that were too high, relative to efficient rates. Information on the extent of these externalities would be invaluable in developing visitation management plans. In this study the authors surveyed 1,625 visitors to southern Thai Island resorts and estimated the extent of these external effects using a revealed preference analysis of visits to beaches with different characteristics. Our results show that externalities and resource degradation are substantial in this setting and that welfare losses from open access are relatively large.

On the Production of Homeland Security Under True Uncertainty

Homeland security against possible terrorist attacks involves making decisions under true uncertainty. Not only are we ignorant of the form, place, and time of potential terrorist attacks, we are also largely ignorant of the likelihood of these attacks. In this paper, we conceptualize homeland security under true uncertainty as society’s immunity to unacceptable losses. We illustrate and analyze the consequences of this notion of security with a simple model of allocating a fixed budget for homeland security to defending the pathways through which a terrorist may launch an attack and to mitigating the damage from an attack that evades this defense. In this problem, immunity is the range of uncertainty about the likelihood of an attack within which the actual expected loss will not exceed some critical value. We analyze the allocation of a fixed homeland security budget to defensive and mitigative efforts to maximize immunity to alternative levels of expected loss. We show that the production of homeland security involves a fundamental trade-off between immunity and acceptable loss; that is, for fixed resources that are optimally allocated to defense and mitigation, increasing immunity requires accepting higher expected losses, and reducing acceptable expected losses requires lower immunity. Greater investments in homeland security allow society to increase its immunity to a particular expected loss, reduce the expected losses to which we are immune while holding the degree of immunity constant, or some combination of increased immunity to a lower critical expected loss.

Regional Energy Substitution - Results from a Dynamic Input Demand Model

In this note we report results of a study of energy substitution in manufacturing, using twodigit data disaggregated by region in a dynamic, disequilibrium model of firm input demand. The question of regional differences in the impacts of energy price changes is an important one. National energy policy is worked out in a climate of great conflict among regions, based on real or imagined differences in the perceptions of the role of energy in production. For example, it has become commonplace to hear that the older regions, such as the Northeast, will be hurt more by energy price increases than newer regions, such as the Southwest. In a previous paper we presented results of estimating regional models with a static, full equilibrium manufacturing cost function [6]. We used pre-1974 data, which may have reflected something close to long-run equilibrium positions for firms. It seems valuable, however, to analyze data from a slightly later period with one of the more recently developed models that permit firms to be out of long-run equilibrium. This could yield substantially greater understanding of the direction and speed of induced input adjustments undertaken by firms of the different regions in response to the large price changes of the 1970s.