Property Rights

Property Rights

A bundle of entitlements defining the owners rights, privileges, and limitations for use of resources

Public Goods

A good whose consumption is indivisible -one persons consumption of a good does not diminish the amount available to others Example: warning systems, landscapes, genetic diversity *are NOT goods supplied by the public

Exclusivity

All benefits and cost accrued as a result of owning and using the resource accrue to the owner and only the owner

Universality

All resources are privately owned and all entitlements are completely specified

Transferability

All rights can be transerred in voluntary trades

Conservation Easements

An agreement between landowner and the "holder" of the conservation easement under which the landowner voluntarily restricts certain uses of the property to protect natural, productive, or cultural features

Consumer Surplus

Difference between WTP as given by the demand curve and amount actually paid as given by the price

Producer Surplus

Economic rents above the firms cost of production

Positive Externalities

Gardens, Landscapes

Coase Theorem

One of the most used ideas of economics by professions outside of economics, used by judicial branch, Economic inventive based approach, Does not matter who gets the rights we will reach society's efficient point

Conservation Reserve Program

Pays farmers to retire land from production Yearly compensation

Transferable rights

Permits set equal to the level of pollution desired

Negative externalities

Pollution, water, air, noise etc

Private Market

Private firms- best interest to protect ecosystem services

Real source of wealth

Production and exchange

Enforceability

Property rights should be secure from involuntary seizure from others

Endangered Species Act

Provision that limit the action of both government and private landowners whose property provides critical habitat for listed species

Property rights the government reserves

Right to tax, right to police, right of eminent domain, right to take estate if no heirs and will

Market equilibrium

Supply=Demand

Ecosystem Goods/ Services

The benefits people obtain from ecosystems Necessary to support and maintain life and support economic activities Many of these services lack adequate substitutes Classification: Provisioning, Regulating, Cultural, Supporting services

Transaction

Two bundles of property rights are exchanged

Purchase of Development Rights

Type of easement owner sells the rights to develop the land

Property rights characteristics

Universality, Exclusivity, Transferability, Enforceability

Types of actions

Voluntary actions, Government persuasion, command and control, private markets, and market type incentives