Monday, August 2, 2010

Were You Raised in a Barn?

For those of you who haven't been asked "Were you raised in barn?" it's a popular saying with parents of children who leave doors open. I wonder if some parent is shouting it now at store owners across the US who leave their doors open in the summer to let the breeze of AC entice customers into their stores.

Well one man from Bowie Maryland made a video of several stores at his local mall that left their doors open on a 100 degree day(see the Youtube video below or read this Washington Post Article)

Under most circumstances whenever people consume more of something the price is going to go up, so by fining stores that leave doors open, we might be able to lower electricity prices although the impact is likely to be small.

Another reasons that it might be better for stores to close their doors is that using energy creates pollution as power plants have to burn more coal and natural gas to provide the extra AC. This pollution impacts even people who don't shop at the Bowie mall (we call this an externality) many economists even relatively conservative ones think this is a bad result. For example Greg Mankiw a former economic advisor to Bush has long been a proponent of the Pigou Club, which proposes creating taxes on gas and electricity use to put the cost of the pollution on the user.

I'm agree with the Pigou Club, but I also like shout "Where You Raised in a Barn?". The good news is I can do both.

Finally, I apologize if I offended anyone who was actually raised in a barn, I hope this video will show that I actually think barn folk are great people.

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