Results for “water” 831 found
From hot water to cold air
My post on hot water (and followup here) is drawing more hot air than I expected. Daniel Davies over at Crooked Timber is often very good so I am frankly surprised that he gets this one very wrong. Davies thinks the argument falters if you assume the landlord has monopoly power.
Even if there is a slight oversupply of rental units for sale, time is almost always on the landlord’s side, because waiting is typically much more inconvenient for the party that has to wait without a house to do wait in [sic]. In general, when tenants and landlords are negotiating over the potential Pareto gain that could be made from renting the house, the landlord ends up capturing most or all of the surplus. The hot water and habitability laws are simply aimed at skewing things a bit in favour of the tenant and putting a floor on how bad a deal the tenant can end up accepting.
Wrong. Assume that a rapacious landlord owns the only apartment in the entire universe and you want it. The landlord is therefore going to extract all of your consumer surplus. Without the hot water the apartment is worth $500 a month to you – so that’s the rent. With the hot water it’s worth $550 – so that’s the rent. There is no skewing in favor of the tenant because the law doesn’t change the landlord’s bargaining power one iota. All it does is raise the landlord’s costs so that he may, in fact, quit the business making you worse off.
Daniel has not absorbed the lesson of my post, the rent will go up. He would have an argument if we added rent controls thereby squeezing the landlord from both ends. [Addendum: Glen Whitman gets the analysis exactly right.]
On a different note, many people have focused undue attention on hot water, something that most of us (in this country) really do want in an apartment. The principles involved, however, don’t change much with the good. If you like, think air conditioning instead. Eric Kilby kindly sends me an editorial from a few years ago in the Philadelphia Inquirer (registration required). Here’s what it says:
The zoning board under Thomas Kelly, president of Sheet Metal Workers Local 19, has required some developers of subsidized housing to install central air conditioning – a pricey, discouraging requirement for what are supposed to be low-cost projects. AC, in case you haven’t guessed, is installed by sheet-metal workers.
Hot water (again)
I think my law students understood my first-class example about contracts, incentives and hot water. But Kevin Drum, Matt Yglesias and others are having some difficulties. No problem. I will make it simpler. Suppose we have a law that says that at the end of every year landlords must rebate their tenants $50 for every month of rent paid. Good for tenants, right? Perhaps in the very short run but in the near future we can expect to see rents rise by $50 per month and the old equilibrium will be restored in all essentials. Now suppose that instead of being required to rebate the $50 the landlords are required to spend the money on shoes for the tenants. Now both tenants and landlords are almost certainly worse off since the tenants would almost certainly have used the rebate to buy something other than shoes. The hot water example hardly differs.
Of course, we could add in some other features that might make the law a good idea. Suppose, for example, that hot water encourages bathing which reduces the transmission of disease. Tenants won’t take the external benefit of hot water into account and thus hot water will be underprovided – a hot water requirement or better yet a subsidy might be justified in this situation.
An alternative explanation for laws like this is that they are supported by people who want to keep the poor out of their neighborhood – this is an externality argument also but one quite different from that above. Whatever the explanation, note that these arguments are quite different than the naive one which assumes that the requirement transfers wealth from the landlord to the tenant. Contracts are multi-dimensional, force one part to change and the others will adjust. More bonus points: What implications does this have for the study of price controls?
As I told my students, understanding the basic analysis is the first-step on the path to wisdom, it is not the end of the path. But you have to understand the first step if you are going to reach the final destination.
Water on Mars
Maybe there was once water on Mars. Maybe not. Reuters reports:
“We think Opportunity is now parked on what was once the shoreline of a salty sea on Mars,” said Steve Squyres, principal investigator for the science payload on Opportunity and its twin Mars exploration Rover, Spirit.
On March 2, astronomers announced that the Red Planet was “drenched with water” at some point. But the rovers’ analysis of Mars rocks has now produced the first concrete evidence that liquid water might actually have flowed on planet’s surface.
“If you have an interest in searching for fossils on Mars, this is the first place to go,” said Ed Weiler, NASA’s associate administrator for space science.
Love that alliteration–the shoreline of a salty sea. It conjures up images of beachcombers and cottages or at least seashells and seaweed with terns turning in the sunlight. Seems like a bit of a stretch. NASA thinks they’ve found not just moisture, not just a few molecules of H2O but a sea with rocks drenched with salty spray, rocks lovingly shaped by streaming water. Pardon my skepticism, but it seems that NASA has just a bit of interest in stretching the results. Notice that even Reuters uses the word “might.”
This hasn’t dampened any of the enthusiasm. Here’s one analysis headlined “Mars water discoveries loom huge” that compares the finding to Galileo’s discoveries.
…the sheer disclosure of the presence of water on a planet other than our own is monumental. It ranks with the moment, nearly 400 years ago, when Galileo Galilei peered through his telescope and discovered spots on the sun, mountains on the moon and four tiny bodies circling Jupiter.
Those revelations, which today are taken for granted, also were monumental in their day. Prior to their disclosure, people confidently — even fervently — believed Earth was the immovable center of the universe, surrounded by all the heavenly bodies, each of which was a perfect, featureless sphere. Galileo’s announcement was considered so shocking at the time he was charged with heresy by the Roman Catholic Church.
Opportunity’s findings have been treated more matter of factly, with NASA officials holding a news conference and bubbling over with enthusiasm at the images Opportunity has transmitted, and members of the media duly reporting the information and displaying the rover’s images.
Yet the importance of this finding cannot be overstated.
Until now, we have known for sure of only one planet on which liquid water has flowed — and water is absolutely essential for supporting life as we know it. There are no chemical processes that will permit the formation of the long, complex organic molecules composing living organisms other than in the presence of water.
It is an extremely simple rule: No water, no life. As long as Earth was the only planetary body containing liquid water — and, more particularly, seawater — then it was the only place in the universe where life was possible.
Now, suddenly, there are two.
Is this a huge discovery? Huge for NASA, certainly, eager to send people to Mars in search of fossils or at least an abandoned sailboat.
I’m in the middle of Simon Morris’s Life’s Solutions: Inevitable Humans in a Lonely Universe. I suspect Morris is unimpressed with the latest Martian chronicle. He argues that it is very likely that we’re alone in the universe. The first part of the book that makes this claim is fascinating with quirky writing and lots of good information. The rest of the book argues for the inevitability of humanity evolving. The writing and narrative of the second half is less spritely and slower going but the first part of the book is very much worth a look.
Rich nations can conserve water
Efforts to conserve water – from low-flush toilets to more efficient power plants and crop irrigation – are working so well that Americans use less of it than they did 30 years ago, a report issued Thursday by the federal government says.
The flat trend in consumption came even as the USA’s population grew and electricity production, the largest user of water, increased.
The study from the U.S. Geological Survey says consumption is largely unchanged since 1985 and is 25% less than the 1970s, when it peaked.
Here is some more evidence:
The biggest savings have been by industry. And that is a result of water-saving technology driven by energy-saving and environmental protection laws passed in the 1970s. Utilities that once needed huge amounts of water to cool electrical generating plants in “once-through” fashion now conserve water by recirculating it in a closed loop.
The report says the USA consumes 408 billion gallons a day. Homes and most businesses use 11% of that. Nearly half, 48%, goes to power plants. Watering crops takes 34%. The remaining 7% includes mining, livestock and individual domestic wells.
Here is the full story, which also ranks states by water use. Here is the original report. On a global scale, agriculture accounts for 70 percent of water use, which indicates further room for conservation. It is indeed a problem that rich nations use ten time more water per capita than poor ones. But in a time when people are talking seriously of nanotechnology, can cheap desalinization be so far on the horizon? Read here on a recent Israeli effort.
Water privatization
Lynne Kiesling offers a lengthy discussion of water privatization, with useful links. I have long thought that water is one of the tough cases for market economics. It is hard to imagine having two sets of pipes built to your home and thus it is difficult to see how competition would operate. Even Milton Friedman, to the best of my knowledge, never came out for laissez-faire for water. An obvious option is to have the pipes regulated, but allow competing carriers within a single piping network. You then have to regulate access to the piping network, and regulate the pricing of that access. Furthermore you must make sure that some institution has sufficient incentive to maintain the value of the piping network, comparable issues have proven problematic in the case of electricity. Managed competition may prove a better form of regulation than municipal ownership, or a vertically integrated natural monopoly, but it is regulation nonetheless. And unlike with electricity, it is hard to see decentralized provision of water becoming the norm anytime in the near future. Electricity offers options such as batteries, solar power, and private generators. Water without pipes is simply hard to live with, get ready to carry buckets on your head.
Nonetheless a good case can be made for the private provision of water, with unregulated pricing, in very poor developing countries, such as much of Africa. Let any private supplier sell water at any price the market will bear. Yes this sounds drastic, but the harsh reality is that otherwise many Africans have no access to piped water in the first place. Even a monopoly price is better than carrying that bucket on your head, and don’t forget that well water can cost ten or twenty times the price of piped water. I recall once reading that if the cure for AIDS were a simple glass of clean water, many Africans still would have no chance.
The problem remains that charging for water is problematic in many developing countries. Property rights are poorly defined and people are not used to paying for municipal services. If you set up water piping to the very poor and tried to collect fees in return, many people simply would not pay and legal recourse would be unclear. What can you do, report them to a credit bureau? Attach their wages? You can see the problems. Right now we know that progress in the water sector will be slow at best.
Will strong AI raise or lower interest rates?
That is the topic of my latest Bloomberg column. Here is one excerpt:
First, as a matter of practice, if there is a true AI boom, or the advent of artificial general intelligence (AGI), the demand for capital expenditures (capex) will be extremely high. Second, as a matter of theory, the productivity of capital is a major factor in shaping real interest rates. If capital productivity rises significantly due to AI, real interest rates ought to rise as well.
Think about capex in a world of AI. The scurry to produce more high-quality semiconductor chips will continue. Those investments are not easy or cheap. But the demand for investment will not stop there. The more that AI is integrated into lives and business plans, the higher will be the demand for computation. That will induce a significant expansion of energy infrastructure.
Again, those are not cheap investments. Northern Virginia, for example, is now facing a major dilemma along these lines, and not only because of AI. The region is home to major data centers, and now needs the equivalent of several large nuclear power plants to meet projected energy demands.
And that could be just the beginning of the rise in capex. AI is already driving some advances in the pace of scientific discovery, a trend that can be expected to continue. Imagine, for instance, if AI made water desalination cost-effective in many parts of the world. All of a sudden there would be more demand to develop more parts of California, Arizona and Nevada. The US would build more real estate, using more energy in the process. Saudi Arabia, the UAE and many other places might do the same, boosting overall demand for investment yet higher.
Demand for space travel and satellite launches seems to be rising as well, partly because of AI. Software innovation is driving a lot of progress on the hardware side. Less optimistically, AI-driven warfare and drone combat may rise in importance, as already is true in Ukraine and the Middle East. This is bad news that will nevertheless drive further investment.
Note that in the longer run:
Still, it makes sense to be prepared for a reversal of the long-run trend of falling real interest rates — at least for several decades, until AI-driven progress creates more wealth to replenish stocks of savings, lowering real rates once again.
The most interesting general question is, if strong AI really is taking off, what is the best way of earning money from that reality? Please apply the theory of tax incidence to any and all possible answers.
Netherlands fact of the day
The country, which is a bit bigger than Maryland, not only accomplished this feat but also has become the world’s second largest exporter of agricultural products by value behind the United States. Perhaps even more significant in the face of a warming planet: It is among the largest exporters of agricultural and food technology. The Dutch have pioneered cell-cultured meat, vertical farming, seed technology and robotics in milking and harvesting — spearheading innovations that focus on decreased water usage as well as reduced carbon and methane emissions…
The country has nearly 24,000 acres — almost twice the size of Manhattan — of crops growing in greenhouses. These greenhouses, with less fertilizer and water, can grow in a single acre what would take 10 acres of traditional dirt farming to achieve. Dutch farms use only a half-gallon of water to grow about a pound of tomatoes, while the global average is more than 28 gallons.
Here is the full article, via S. The article is interesting throughout. However here is a more recent piece on the Dutch nitrogen revolt.
Saturday assorted links
1. 101 things Leila would tell her past self.
2. “The colonel was then carried to the Dotonbori river and tossed into the murky water.”
3. Leadership lessons from Shakespeare’s Henriad.
4. Good thread on the Apple case.
5. Where do the major African economies stand? And fellowship in Tanzania.
Friday assorted links
1. Virginia stadium deal might be dead.
2. More blue cities are backing anti-crime measures.
3. Mark Skousen reviews GOAT for Economic Affairs.
4. Lengthy JEL survey article on the productivity slowdown (AEA gate).
5. Weak showers do not necessarily save water.
6. Tehzeeb live sessions (music from Pakistan).
7. The secret door is the new trend? (NYT)
Saturday assorted links
1. Dutch waterworks.
2. Pseudo-currencies in Argentina.
4. Recommendations for understanding Eastern and Central Europe.
5. Ross D. on Ukraine aid (NYT).
6. BYD will set up an EV factory in northern Mexico. I am curious to see the policy response to that one.
Emergent Ventures winners, 32nd cohort
Anson Yu, Waterloo, telemetry devices that can detect compromised hardware devices to protect our electrical grid and other critical infrastructure.
Anshul Kashyap, Berkeley, neurotech and vision, to visit the Netherlands for work and research reasons.
Kieran Lucid, Dublin, Irish videos about YIMBY and aesthetics, at the site Polysee.
Matin Amiri, Antwerp, Afghanistan, and San Francisco (?), building digital clones.
Snowden Todd, USA and Honduras and South Korea, to write a book on South Korean fertility issues.
Anthony Jancso, Accelerate SF, San Francisco, for general career development.
Denisa Lepadatu, Romania and Bremen, trip to Prospera to pursue longevity research.
Jamie Rumbelow and Henry Dashwood, London, British company to ease land rights/permissions.
Anastasia Vorozhtsova, Columbia University, to study Russian education and the Russian state.
Rohan Selva-Radov, Oxford, general career development, and to develop a dating/matching service for young people.
Olga Yakimenko, Vienna, movie-making.
Rucha Benare, Dublin, Pune area, art and biology.
Brooke Bowman, San Francisco, Vibecamp.
Ruxandra Tesloianu, Cambridge/Romania, travel grant and career development, bio space, science, and meta-science.
Ukraine cohort:
Serhii Shadrin, to study at University of Chicago, and to study information manipulation and media.
Le Sallay Academy, school for Ukrainian refugees, including in France and Serbia, Sergey Kuznetsov and Aleka Molokova.
Here are previous winners of Emergent Ventures. Here is Nabeel’s software for querying about EV winners.
The economics of illicit sand markets
Very few people are looking closely at the illegal sand system or calling for changes, however, because sand is a mundane resource. Yet sand mining is the world’s largest extraction industry because sand is a main ingredient in concrete, and the global construction industry has been soaring for decades. Every year the world uses up to 50 billion metric tons of sand, according to a United Nations Environment Program report. The only natural resource more widely consumed is water. A 2022 study by researchers at the University of Amsterdam concluded that we are dredging river sand at rates that far outstrip nature’s ability to replace it, so much so that the world could run out of construction-grade sand by 2050. The U.N. report confirms that sand mining at current rates is unsustainable.
And:
Most sand gets used in the country where it is mined, but with some national supplies dwindling, imports reached $1.9 billion in 2018, according to Harvard’s Atlas of Economic Complexity.
Companies large and small dredge up sand from waterways and the ocean floor and transport it to wholesalers, construction firms and retailers. Even the legal sand trade is hard to track. Two experts estimate the global market at about $100 billion a year, yet the U.S. Geological Survey Mineral Commodity Summaries indicates the value could be as high as $785 billion. Sand in riverbeds, lake beds and shorelines is the best for construction, but scarcity opens the market to less suitable sand from beaches and dunes, much of it scraped illegally and cheaply. With a shortage looming and prices rising, sand from Moroccan beaches and dunes is sold inside the country and is also shipped abroad, using organized crime’s extensive transport networks, Abderrahmane has found. More than half of Morocco’s sand is illegally mined, he says.
Of course these are usually unowned, unpriced resources:
Luis Fernando Ramadon, a federal police specialist in Brazil who studies extractive industries, estimates that the global illegal sand trade ranges from $200 billion to $350 billion a year—more than illegal logging, gold mining and fishing combined. Buyers rarely check the provenance of sand; legal and black market sand look identical. Illegal mining rarely draws heat from law enforcement because it looks like legitimate mining—trucks, backhoes and shovels—there’s no property owner lodging complaints, and officials may be profiting. For crime syndicates, it’s easy money.
Here is the full Scientific American piece by David A. Taylor.
Monday assorted links
1. Noah Smith on the California Forever Project.
2. Corporations defending DEI.
3. More on ice deposits on Mars? (speculative)
4. Larry speaks the truth about Harvard.
5. “A rich literature explores gender differences between men and women, but an increasing share of the population identifies their gender in some other way. Analyzing data on roughly 10,000 students and 1,500 adults, we find that such gender minorities are less confident and provide less favorable self-evaluations than equally performing men on a math and science test.” Link here.
6. These two cicada broods will emerge at the same time (NYT).
7. “Dana-Farber Cancer Institute is reviewing more than 50 papers, including work of the hospital’s CEO.” (WSJ) That is at Harvard.
Is real estate in Roatan undervalued?
By a lot. I was briefly on the island, and also visited Próspera there (I thank my hosts for their time and efforts, and I believe Vitalia will be posting my session with them on-line, much of it covering life extension and crypto).
I have been to plenty of both Latin America and the Caribbean, and I was struck by how safe the island is. Most anything of significance is priced in dollars, and you can pay with dollars, even in small restaurants. The core language is English, although Spanish seems to be increasing rapidly, due to migration from the mainland, itself a good sign for Roatan. Population is about 100,000 on a small island, but I didn’t encounter any traffic problems. Electricity and water seemed to be reliable. The local seafood is of very high quality.
At the top end I found this home selling for over 3m. I was in Jonesville, an extremely charming small town right on the water with picture-perfect views. Here are some home and lot prices. Below 400k at the top end, something wonderfully placed for below 90k, and empty lots in the 70k range.
Much of the Caribbean I don’t find so attractive, as it can be too dry or scrubby, but Roatan is truly beautiful. The views from some parts of Próspera are among the best Caribbean views I have seen.
From conversation, I infer that better direct flight service and better facilities for private planes are holding back real estate prices in Roatan. Neither of those seem to be insurmountable problems. Maybe the Honduras label puts some people off?
For dining, by the way, eat the Garifuna offerings at Punta Gorda, such as Garifuna Living Foods.
Wednesday assorted links
1. Donation suggestions for economic growth.
3. Tiny homes in Austin (NYT).
4. Casey Handmer on alleviating water scarcity in the US Southwest.
5. Using an LLM as your operating system? And the video is here, I have been predicting this.
6. Hillsdale College update (NYT).