ECON 155 Lecture Notes - Lecture 9: Waze, Marginal Cost, Marginal Utility

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22 May 2018
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Chapter 5 February , 8
Zoning
o Claims that FARs (height limit on buildings) make urban residents worse off by pushing the excess
population out
o Less green space for residents
o In Houston, there is no zoning. You can identify where industries locate by race, ethnicity, income, and
transport lines
Race
o The stadard odel treats the soial ad politial as idepedet spheres that itervee fro the
outside
Wealth ad privilege also itervee fro the outside ad distort the arket
To accurately characterize cities, we must include all these independent variables
o Eliminating zoning does mean that zoning disappears, race ethnicity, income, and class are how cities are
zoned (ie: Oakland, Richmond, Houston have the same distribution)
Public space
o Cityscapes are being shaped by publics who elect to create public greenways, demand zero-waste recycling,
and educate homeless
o These interventions lead to the misallocation of resources
o In Berkeley, it is easy for outsiders to poke fun at our liberal approach to economics but they include many
variables
Congestion
o Neighborhoods that enjoy more amenities endure a higher marginal cost from traffic diverted to them than
neighborhoods with fewer amenities
o This results in traffic in lower income communities
o Example: the Waze app needs to include wealth (housing value, income) into their GPS system in order to
restrict traffic into rich neighborhoods
o Along our metropolitan indifference curve, then each commuter and neighborhood would enjoy the exact
same marginal costs and enjoy the same marginal benefit as every commuter (ie: those who live in SF enjoy
the same marginal cost as those who commute the greatest distance to SF)
o Cogestio does’t easure hoie, ut other ostraits. The odel has issed the fact that these
different population and endure longer commutes are constrained by other factors (ie: income)
o Our congestion model can include: public health, education, housing, all of which would prove the model
more rigorous and informative
Tolls
o Some forms of governments (tyrannies, despotisms, oligarchies) can govern traffic in this manner. Some
cities also adopted this centralized, bureaucratic, top-down approach
o A republic operates under constraints all the time. However, our republic has been occupied by private
households or enterprises
o Private households control traffic flow and where all families live
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