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Posts Tagged ‘Economy of Scale’

Can Mass Transit Save the Environment? Right Wing or Left Wing, Here's a Post Everybody Can Hate

A major rationale — perhaps the major rationale — touted by supporters of mass transit is that by reducing our output of greenhouse gases and other pollutants, transit can help save the environment. The proposition seems intuitive and even obvious: by no longer encasing each traveler in thousands of pounds of difficult-to-move metal, surely transit is more energy-efficient. Plenty of analyses prove this. But then again, Aristotle, who was revered as the infallible font of truth for more than 1,000 years, proved that heavier objects fall faster than lighter ones and that women have fewer teeth than men. Might studies that demonstrate transit is greener be similarly wrong?

They might. The reason is that many studies of energy efficiency by mode often make questionable and — depending on the author’s point of view — self-serving assumptions. The main trick is to look at autos with but one passenger and compare them to transit vehicles in which every seat is full. (For example, see this.)

But in the real world, this is emphatically not the case.

Economies of Scale in the Cocaine Industry

Brian Palmer of Slate reports that cocaine prices have dropped significantly in the past three decades due to economies of scale. As drug traffickers have become more organized (in processing, transport, and retail networks), the price of cocaine has plunged:

Since [the end of the 1980s], the price has dropped more slowly, down to approximately $140 for a gram of pure cocaine in 2007. (That’s almost 80 percent less than it cost in 1982.)