VOX  CEPR Policy Portal

Concerns are often raised about increasing spatial segregation by education level in societies. This column uses a study in the Netherlands to show that as preferences for locally provided public goods with a high fixed cost, such as train stations, differ widely between educational groups, spatial sorting by education and an increase in local density can actually raise the social benefits from investments in such infrastructure. However, since the highly educated benefit disproportionally, this leads to serious political economy problems.

Good architectural design is a public good, but economists and policymakers lack robust evidence on the impact of well designed architecture on location value when planning spaces. This column verifies the worth of preserving and designing good architectural spaces by analysing the changes in property prices across conservation and non-conservation areas in England. It finds that good design in buildings has a substantial positive impact on location value. 

Ethnic divisions have been shown to adversely affect economic performance and political stability, particularly in Africa. However, the underlying mechanisms remain poorly understood. Using experimental data from Kenya, this column studies whether one potential mechanism – co-ethnic bias – affects altruism. Strikingly, most tests yield no evidence of co-ethnic bias, suggesting that other mechanisms must be driving the negative association between ethnic diversity and economic and political outcomes in Africa.

If governments supply public goods that market forces will not, they ought to assign monetary values to those goods so that they can prioritise projects. This column discusses the difficulties of estimating those values using happiness surveys. Using a new method, it estimates that people value a one-standard-deviation improvement in air quality at $40.

Scott Barrett of Johns Hopkins University talks to Romesh Vaitilingam about his research programme on disease eradication and other global public goods. He discusses the enormous benefits from the eradication of smallpox in 1977 and the constraints on current efforts to eradicate polio; as well as the economics of global public goods more generally, including protecting the Earth from asteroids and climate change. The interview was recorded at the American Economic Association meetings in New Orleans in January 2008.