Due to the
deterioration of McCormick Bridge’s deck, the Virginia Department of
Transportation has reduced the weight limit for vehicles allowed to cross the
bridge. This decision has had
effects on people throughout Charlottesville due to its many uses.
“The bridge
carries as many of 2,000 pedestrians per hour, as well as transit vehicles,
U.Va. service vehicles, bicycles and emergency equipment, according to a 2010
report prepared for the University by Carol R. Johnson Associates, Inc.,
landscape architects from Boston.”
In class we
discussed negative and positive externalities and the resources we have to
combat these market failures: internalizing the externality or using government
regulation. The deterioration causing the new weight limit on McCormick Bridge
has had the effect of not allowing UTS buses, commercial trucks, and emergency
vehicles to pass. This imposes a negative externality on students because UTS
buses cannot pass through central grounds. It also poses a negative externality
on the businesses that used to drive their vehicles through grounds, and on
patients of the Uva hospital (as well as Uva hospital drivers). A positive
externality, however, has been imposed on Professor Coppock, who can now enjoy
his office without hearing noisy buses outside. The externality has been
dealt with institutional regulation to protect the users of the bridge.
1 comment:
In regards to externalities, I think it is important to emphasize which good is being consumed (or produced) and how the consumption of that good negatively effects those external to the consumption. In this example, the good is the bus trip through central grounds via the McCormick road bridge. The consumers are the bus riders. The riders impose a negative externality on other users of the bridge and the drivers who use the section of road under the bridge by risking its collapse. Users of the road under the bridge have a higher chance of dying in a bridge collapse if the busses are allowed to use the bridge. Low tonnage users of the bridge have a higher chance of getting to the bridge and discovering they need to find an alternate route around the mangled wreckage of the collapsed bridge and crashed bus; causing them to be late for their business in central grounds. The busses would also impose a daily negative externality on Professor Coppock by driving noisily past his window.
Closing the bridge to high tonnage vehicles attempts to deal with these externalities, but does so in a rather arbitrary manner. The lawmakers don't have the valuations by all parties on the good and the externality. If the bridge was privately owned, the owner could set tolls for high tonnage vehicles to offset potential for legal settlements to those killed and the cost of rebuilding. Since the low tonnage users of the bridge and professor Coppock would prefer to not have high tonnage users on the bridge at all, they could try to negotiate for the bridge to be closed altogether to high tonnage use by outbidding the money the bridge owner would make from allowing high tonnage users on the road. This Coasean solution could theoretically lead to a more efficient outcome, since all parties would compete to have the bridge used at its highest valuation.
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