Texanomics

A student writes that she had a problem: An armadillo died in her family’s front yard, and its odor was attracting vultures. (If it had died in the midst of a field of bluebonnets, this would have achieved the trifecta of Texas wildlife!) The odor and the vultures (not the cleanest of birds) created a negative externality, and the Homeowners’ Association was getting after her parents. Her father was squeamish about cleaning it up, but he hit upon a solution: He offered my student double her usual weekly allowance if she would remove the beast. This compensating wage differential was sufficient to induce her to supply her labor for the task, and the offending armadillo was removed. (HT: KT)