Friday, March 25, 2005

If people just want to think

Why haven't I elaborated my thinking about the controversy surrounding the gas price hike, in this blog? Because it's near useless. Have tried to talked many times and have answered many questions. But only two or three persons are willing to listen. You go find any newspaper or simply open your newsgroups. People even make stupid jokes on the issue. One of them goes like this: "In order to reduce the number of the poor, raise the gas price". And the readers laugh cynically. Yes, those who got no intention to even think. Who are not even open to a possibility that the silly "joke" might be true. Try it: just add this condition: "... and transfer the money from the less-entitled rich to the more-entitled poor". See? I can understand people's sympathy to the poor. But I can't stand those who use them to gain popularity. Some of them claim to practice "economics for the people" (for lack of better translation); while they simply rephrase "Pancasila" here and there (no, not a bit of stuff like Amartya Sen's). If this is popularity contest, I'd switch the channel to Indonesian Idol.

This is getting pestiferous!

Thursday, March 24, 2005

Midterm Exam: Environmental and Natural Resources Economics

  1. We have discussed about the two opposing views of the future: optimistic- and pessimistic models. Summarize their claims briefly. Since they talk about the future, we cannot satisfactorily decide which one is right now. (The “famous bet” between Ehrlich and Simon might just be a pure coincidence – well, it was a bet!). So, what criteria do you think we might propose for evaluating the predictions of the two views?
  1. Economists have been valuing the environment. Do you think it is ethical? Why or why not? Why do we need valuation? What are the limitations of environmental valuation methods offered by economists?
  1. Sustainable development is a matter of sharing costs and benefits between generations. True or false? Why? We don’t know what our grandkids really want, but we sometimes assume that they would like the forests to be preserved, instead of a huge shopping mall to replace the forest. Why do we do this kind of “paternalism”?
  1. One of the practical implementations of Coasian approach in environmental policy is marketable pollution permits. Do you believe market can take care of the environmental problems? Why? In case you do, tell me how. Another thing, is it ethical to look at the pollution as a factor of production? Give me your argument.
  1. In discussing the issue of population bomb, we talk about the economics of population control. Now tell me what you know about the economics of childbearing. Gary Becker says, children are durable goods. Maintaining them incurs costs and benefits. So, optimize! Comments?
  1. Read the small box in Tietenberg page 293. Yes, it’s about the “Harbor Gangs of Maine”. It seems to me that informal arrangement can be sufficient to ensure efficient harvesting. Am I right or wrong? Why?
  1. We have talked about environmental injustice. It is the condition where those who bear the negative externalities of environmental deterioration are also those who are poor. But hey, this is like what’s happening everywhere. Can you think of a rich community that is willing to bear the negative externalities? If you can imagine one, why do you think the relatively rich people want to do that?

Monday, March 07, 2005

Ticket for gas

My insightful sister was wondering. Why doesn't the government just sell tickets with different nominal values to the BBM consumers? Those with high income should buy one ticket 5 times as much as those with low income, for example. The problem with this type of mechanism is, as I told her, monitoring. Mr. Rich will ask Mr. Poor next door to buy tickets for him. With some incentives, Mr. Poor will do it happily. Moral hazard and adverse selection at play. (Still this is worth elaborating. After all, even the compensation mechanism offered by the government is not free from such problems).

My sister responded again:
I got the point of difficulty in monitoring. In fact what I was particularly wondering is how to make people that use public transport, regardless of being poor or rich, pay bbm/liter less than those use private cars. The justification made is simply that people using public transport use up much less space of the road and do not get as much convenience as people using private vehicle. I am fully aware of the absurdity of effort to identify who the poor or rich are in Indonesia.
I mentioned about ticketing for buses through which government gives subsidy to the public transport users, i.e: users buy bus tickets at Rp. X, then the bus operator can reimburse the tickets at Rp X+Y. ticketing system has been applied for KRL (have no info of how it works). Unfortunately, as you said, for ticketing, there is always an issue of ticket faking. Now, what about allocating oil stations for buses where oprators can get cheaper bbm?

To which I replied:
Nice thoughts. On your last question. We sure hope the bus drivers do not have some evil pact with some guy somewhere: fill up their tanks repeatedly, and go sell somewhere else at higher prices. Arbitrage at play.
And I told her, please keep stimulating such good ideas; and don't get tired by economists' skeptical starting points in looking at things -- they are skeptical.

BBM and sustainable development

Finally someone looks at the BBM fiasco from sustainable development perspective. Very well done, Bang. Thanks for educating that to public.
That's an SMS I sent to this great person (I have no idea if this site is official or not) in response to his article today in Kompas.

Sunday, March 06, 2005

Libertarianism vs Conservatism

Mises Economic Blog brings this debate into the blogosphere. Agree with them, this is a must read. Beware, don't confuse liberalism and libertarianism. Also, keep in mind that American conservatism/libertarianism are different with those of Europeans. Especially when it comes to economics. Why is Friedman "conservative" but libertarianically opposes big government? Political Compass may have some answer -- think about "liberal conservative".

Somehow, I am relieved that I don't need to resort on either one. I have my own principle and so far so good.

Friday, March 04, 2005

Malaysia, you're getting into my nerve!

Malaysia is off the line. Alright, on that illegal migrants thingy, the blame might be on us. But just because of that, doesn't mean you can annex my country! Get off!!

IMF is loosing its focus, too

Attending the IMF's presentation yesterday, I was amazed. It was supposed to be "The Role of IMF in the Globalization". As it turned out, it was simply a roadshow promoting their "new focus": poverty reduction. Say what? Are these guys now trying to takeover the job from its neighbour across the street?