Recycle -- or not? A case from New York City
and is replicated here as part of the SERC Pedagogic Service.
This case can be used in introductory or intermediate micro courses. Externalities are among the important concepts covered in introductory economics courses. As such, I like to reinforce and deepen the students' understanding of this concept through discussion and analysis of a real-world example. I use a case about New York City to do so.
Context for Use
Description and Teaching Materials
NYC Recycles -- or Not (Acrobat (PDF) 34kB Apr6 09)
Teaching Notes and Tips
I will distribute the case a week prior to its use. With it I will distribute a "reading guide" that asks the students to read carefully and to write down both the dollar costs and the opportunity cost of the New York City recycling program. I will also ask them to write down the benefits of that program. This will not be collected and graded, but will be used by the students as they discuss in class.
During the class period.
I can place this case discussion either at the beginning of my discussion of externalities or after the exposition of the theoretical concept: the class organization will differ slightly, but it will be useful either way. I will plan to spend 30 minutes on the topic.
The initial 5 minutes will be devoted to identifying the major economic issues raised and ensuring that everyone understands the salient facts. I could begin, for example, with the question: Why did Mayor Blumenthal establish a moratorium on recycling? The students can then use their notes to provide a list of the nominal costs of recycling, and can establish that trash collection is the opportunity cost of recycling. We can also distinguish paper from other materials, since the moratorium is a partial one. Finally, we'll review the distinction between private cost and social cost, private benefit and social benefit, and we'll find examples in the case of each.
The next 10 minutes will be small-group work: each group of five students will prepare an argument either for lifting the moratorium or for keeping it in place – I'll assign the topic to groups randomly.
In the next 10 minutes we'll have a meeting of the Mayor's council – representatives of each side will argue the case before a group of five students serving as the Mayor. The arguments must be economic in nature. We'll vote as a group on the appropriate direction forward.
In the final 5 minutes we'll summarize what we've learned about the social costs and benefits of recycling.
Graded assessment can also be based on the case. My preferred method is to hand out a short written assignment at the end of the in-class discussion for submission at the next class period.