Trump on water and scarcity

This video clip of Trump talking about water in CA prompted this post.  Trump says that CA has "plenty of water" and ships a lot of water to the sea.

We many have "plenty of water" but water is still scare. We cannot freely use all we want where and when we want it.Water does not miraculously irrigate farms or flow into houses to use. Someone must drill for it, dam it, and construct pipelines to carry it. Heck, we can't even get water we want to drink freely. Why else would anyone pay 7-11 to purchase a bottle of water?

When something is scarce, obtaining more of it creates an opportunity cost. Part of the opportunity cost of diverting more water from rivers to farms and houses is the reduction of fresh water into the sea and the environmental impact of the reduction. I think that the EPA has determined that for at least some rivers any further diversion of water would adversely affect the three-inch fish Trump mentions.

Do we need death panels?

Scarcity of health care implies rationing of health care. Here are a couple of opinions that discuss the best ways to ration health care.

http://www.nytimes.com/2012/09/17/opinion/health-care-reform-beyond-obamacare.html?smid=tw-share&_r=2

http://www.nytimes.com/2012/08/22/business/economy/rationing-health-care-more-fairly.html?_r=2&pagewanted=all

What happens when the cost of injuring someone < cost of killing them?

Here is a gruesome example of the effect of incentives: http://managerialecon.blogspot.com/2015/09/whats-marginal-incentive-to-commit.html

Incentives

Is Last-come first-served more efficient than first-come first-served?

Some Danish researchers say that the change alters incentives and reduces time wasted standing in line. The change, for instance, would remove the need for K-ville.

Is heroism rational?

Is a decision made instinctively rational? See http://www.nytimes.com/2015/08/30/opinion/the-trick-to-acting-heroically.html?smid=pl-share&_r=0.

Label = Choice

Two cheers for sweatshops.

This article from the NYT shows that sweatshops may be the best alternative for many of the workers.

Opportunity cost of your time

Work & Family. Do You Know What Your Time Is Really Worth?
by: Sue Shellenbarger
Jul 22, 2015
Click here to view the full article on WSJ.com
Click here to view the video on WSJ.com 

TOPICS: Opportunity Costs

SUMMARY: There are new ways to look at the value of time, allowing people to make more thoughtful choices.

CLASSROOM APPLICATION: Instructors can use this Work & Family column to introduce issues involved in determining opportunity cost of time. They can also use the column to highlight the types of mistakes people make in time-use decisions.

QUESTIONS: 
1. (Advanced) Why does putting a dollar value on your time require more than dividing your pay by hours worked?

2. (Advanced) What are examples of inconsistencies in decisions about the use of time?

3. (Introductory) Should people factor opportunity cost into their time-use decisions?

Hospitals are rational. Is that good for patients and taxpayers?

Hospitals Discharge Patients to Maximize Medicare Payments, Study Finds
by: Anna Wilde Mathews and Christopher Weaver
Jun 09, 2015
Click here to view the full article on WSJ.com

TOPICS: Health Economics

SUMMARY: New research in Health Affairs confirms a Wall Street Journal analysis that found a pattern of long-term-care facilities discharging patients at lucrative times.

CLASSROOM APPLICATION: Students can evaluate the effect of Medicare payment rules on hospital discharge decisions. Instructors can present the Medicare-hospital relationship as a principal-agent problem with hidden information (in which the hospitals have private information about the health status of patients).

QUESTIONS: 
1. (Introductory) What is the evidence that long-term-care hospitals are responding to the financial incentives in their discharge decisions? Is this evidence refutable?

2. (Advanced) What is the principal-agent problem with hidden information? Is the case described in the article one of these problems?

3. (Advanced) Should Medicare use a step function (i.e., payment thresholds) to determine hospital reimbursements?

Reviewed By: James Dearden, Lehigh University

What would I be doing instead?

Research. Writing a paper or analyzing data from a recent experiment.