THREE POSSIBLE SOLUTIONS

1) Hiring a beach clean up crew
2) Raising littering fines
3) Banning non recyclable items i.e. plastic bags, bottles, wrappers, etc. 




The Chosen Solution
Solution number 1 would be the best overall because it has the possibility of meeting all three criteria of a low cost, not interfering with the tourists, and being popular with the public. By hiring a clean up crew in for the beach, litter would almost always be eliminated and thus attracting more tourists to the beach. This positive externality would increase business incomes and property values in the beachfront area. I would chose this solution over the other two because it is the simplest for the town. If anything, there would be a small increase of the townspeople's taxes but otherwise, there would be almost no interference. The solution of banning non disposable items would impact the beach goers an unbearable amount and the increase of fines just would not be as effective at cleaning litter than a daily clean up crew.

Why would some people be opposed to this solution?

Some people may oppose hiring workers to clean up the litter because to pay for their work, townspeople's taxes may raise.


Externalities of this Solution

Negative Externalities

Household Level: Beach cleaners would work either very early in the morning or late at night. If they made a lot of noise, this could affect the people in beachfront apartments and condos by keeping them awake/waking them up early.

Business Level: Beach cleaners may dispose of the waste they pick up into trash barrels outside of businesses, causing them to look messy and thus not attracting beach goers during the busy beach day.

Government: The government could have a free-rider problem with this solution because all of the beach goers from out of state do not have to pay the heightened taxes for the labor of the beach cleaners.

Rest of the World: The rest of the world would be free-riders if this solution was enacted because they don't have to pay the taxes the townspeople do so the beach will be clean.

Positive Externalities:

Household Level: The cleaner beach during a resident's open house sale could allow for higher resale value because the beach is nice.

Business Level: Because the beach is cleaner, it could attract more tourists leading to more purchases from beach side businesses.

Government: Because of the possible increase of business purchases by the increased number of tourists, the government would collect more money from taxes.

 

 

 

 

What incentives do individuals, businesses, and government have to act on each possible solution?

 

Individuals would not have to go to clean the beach themselves, allowing them to use less effort and time. Businesses would want to chose this one so that the beach would undoubtedly be clean all of the time, attracting more tourists who purchase more from their stores/restaurants. The government would want to act on this solution because the taxes they receive from the businesses who receive more money from tourists would even out the amount they spend on the workers labor so it is as if they don't pay for the clean beach.