Donning Coase-Coloured Glasses: A Property Rights View of Natural Resource Economics

18 Pages Posted: 7 Oct 2004

See all articles by Terry L. Anderson

Terry L. Anderson

PERC - Property and Environment Research Center

Abstract

Economic analysis of natural resource and environmental issues inappropriately places too much emphasis on Pigouvian externalities and too little on Coasean property rights and transaction costs. The crucial questions are who has what property rights and what are the transaction costs associated with these property rights. Asserting an externality implicitly assumes a set of property rights and hence a distribution of the social costs, but it is precisely a lack of property rights that allows decision makers to ignore social costs. By viewing natural resource and environmental problems through a Coasean lens, we better focus our attention on how property rights evolve, how they influence transaction costs, and how those transaction costs affect the potential for bargaining to minimise social costs.

Suggested Citation

Anderson, Terry L., Donning Coase-Coloured Glasses: A Property Rights View of Natural Resource Economics. Australian Journal of Agricultural & Resource Economics, Vol. 48, No. 3, pp. 445-462, September 2004. Available at SSRN: https://ssrn.com/abstract=595073

Terry L. Anderson (Contact Author)

PERC - Property and Environment Research Center ( email )

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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