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By Mike Moffatt, About.com Guide to Economics since 2002

Exactly.. Coase Doesn't Apply to Air Pollution

Thursday May 15, 2008
Eclectecon takes the bait:
The Coase Theorem holds ONLY if transaction costs are low or zero. They clearly are not in the case of air pollution.
Exactly. So on the topic of air pollution, lets never hear of Coase's theorem again - as we did here, here, here, here, here, here, here, etc. etc.

Comments

May 16, 2008 at 2:49 am
(1) Gabriel says:

You might make a (silly) case that it applies at the international level (inter-national). The UN is, allegedly, one mechanism meant to deal with the transaction costs of multilateral, international coordination.

May 16, 2008 at 3:46 am
(2) haynes says:

What about the case of non uniformely mixing air pollutant?

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