Maximizing the Net Benefits of Pollution
Read this section about how to apply the Coase Theorem to solve environmental problems.
5. The Measurement of Benefits and Costs
Saying that the efficient
level of pollution occurs at a certain rate of emissions, as we have
done so far, is one thing. Determining the actual positions of the
demand and marginal cost curves that define that efficient solution is
quite another. Economists have devised a variety of methods for
measuring these curves.