San Antonio is paying bars, clubs and restaurants to keep the noise down (how might this relate to the Coase Theorem?)

The city’s Noise Mitigation Reduction Program just handed out grants of up to $7,500 each for sound-reducing curtains, doors and windows and the like.

By Marc Duvoisin of The San Antonio Express-News. Excerpt:

"Nightclubs, bars and honky-tonks often have fraught relations with their residential neighbors. Just ask the folks who live and do business along St. Mary’s Strip.

Sometimes, the neighbors complain that customers are monopolizing street parking. Sometimes, it’s the noise that has them at wit’s end.

The city of San Antonio is trying to do something about the latter. It’s distributing money to bars, restaurants, clubs, recording studios and other small businesses across the city to help them keep the noise down and let the neighbors catch some shut-eye.

The Noise Mitigation Grants Program aims to help “noise-amplifying small food and beverage businesses better equip their locations to reduce externally emitted sound.”"

This reminds me off THE COASE THEOREM.

It is an economic idea from the Nobel Prize winning economist Ronald Coase. It should not matter who has the property right in determining the most efficient outcome.

There does not need to be any special rules made by the a board or city council. Let the bars and the residents negotiate. If it really matters to the residents, they will pay the bars to not play music or erect barriers to reduce the noise to an acceptable level.

If the residents placed a $200 value on having quiet and if paying the bars $100 to not play music or erect effective barriers, then this will happen if the parties are allowed to negotiate.

Or if the bars placed a $300 value on having music, they could pay the residents $250 to not protest (that is more than they value the quiet).

Either way, we get a policy where the benefit outweighs the cost and that is efficient. 

One problem is that there are many parties involved and negotiation can be difficult in that case. But there is no guarantee that the government can find the best solution. They would have to know how much residents value the quiet, how well the purchased barriers work, keep track of how well they are working once they are installed, make sure the bars don't misspend the money and so on.

Related posts:

Trees vs. Solar Power? (2008)

Does the Coase Theorem tell us what to do about the noise from pickleball? (2022)

The Economy’s Odometer Is Broken

The pace the economy can grow at without overheating depends on how productive it is. But productivity figures have turned into a real mess.

By Justin Lahart of The WSJ. Excerpts:

"American workers shook off their winter blues and got more productive in the second quarter. But don’t be too quick to proclaim that a new era of productivity has emerged.

The Labor Department on Thursday reported that U.S. productivity, as measured by what a typical worker produces in a typical hour, grew at a seasonally adjusted 3.7% annual rate last quarter from the prior quarter. That came on the heels of a 2.1% decline in the first quarter, a 1.6% increase in the fourth quarter last year and…well, you get the picture. Productivity figures, which have always been volatile, have been a complete mess since the pandemic hit.

That in turn presents a problem for the Federal Reserve: If it doesn’t have a good sense of what productivity is doing, it doesn’t know how fast the economy can grow without inviting too much inflation."

"One reason the U.S. economy has been so successful, historically, is that through its embrace of innovation America delivered efficiency gains that allowed workers to produce more. But in the years before the pandemic—really, since the collapse of the dot-com bubble—productivity growth has been mediocre."

"Not long after the pandemic struck, there were hopes that the ways workers and businesses met that challenge would kick-start higher productivity growth. People became more adept at videoconferencing, for example, which meant they could spend less time traveling to client meetings, and more time doing something meaningful. Restaurants embraced QR codes for menus and bills. And indeed, through the end of 2021, it looked as if there was a big step up in productivity.

But in a lot of it was a mirage, driven by the massive job losses and other distortions the pandemic created. Take hotels and motels, for example. In 2021—the latest period Labor Department data is available for—their productivity jumped by 25.2%. But while they might, in fact, have gotten more efficient, this was probably because there weren’t as many people working room service, the front desk and so on—a situation that, while temporarily bearable for guests, wasn’t sustainable."

The % of 25-54 year olds employed held steady at 80.9% in July. Highest since April 2001 when it was also 80.9%. Average hours worked down slightly

One weakness of the unemployment rate is that if people drop out of the labor force they cannot be counted as an unemployed person and the unemployment rate goes down. They are no longer actively seeking work and it might be because they are discouraged workers. The lower unemployment rate can be misleading in this case. People dropping out of the labor force might indicate a weak labor market.

We could look at the employment to population ratio instead, since that includes those not in the labor force. But that includes everyone over 16 and that means that senior citizens are in the group but many of them have retired. The more that retire, the lower this ratio would be and that might be misleading. It would not necessarily mean the labor market is weak.

But we have this ratio for people age 25-54 (which also eliminates many college age people who might not be looking for work).

The percentage of 25-54 year olds employed was 80.9% in July, unchanged from 80.9% in June. It was 80.6% in Jan. 2020 just before Covid. The 80.9% in June was the highest since the 80.9% in April, 2001. It rose 5 straight months before falling in May.

It was 80.6% in Jan. 2020 and 69.6% in April 2020.  Click here to see the BLS data. The unemployment rate was 3.5% in July falling from 3.6% in June. It was 3.6% for all of  2022.  Click here to go to that data

60.397% of the adult population was employed in July (that is people 16 years old and older). 

60.342% of the adult population was employed in June. So we had an increase there. But it was 60.437% in April.

 

Here is the timeline graph of the percentage of 25-54 year olds employed since 2013.

 

Now since 1948

 

Now hours worked. This comes from the St. Louis FED. See Average Weekly Hours of All Employees, Total Private. It was 34.4 in June and fell to 34.3 in July.