Ideas for Research Projects

From time to time I get an idea for a research project in economics that I am never going to do. The purpose of this page is to offer those ideas to other people--in particular, doctoral candidates looking for a thesis topic--in the hope that they might find them useful.

Economics of Regulation: Low Flow Toilets

Many locations, including the city I live in, now mandate low flow toilets--toilets that use less water when you flush them. Judging by my experience, low flow toilets get stopped up much more often than conventional toilets. This suggests three interesting questions.

1. Do low flow toilets use less water or more?

When a toilet gets stopped up, the process of unstopping it often involves multiple flushing. On average, does this use more water than the toilet saves?

One way of answering the question would be to try to compile data on actual usage. Another and perhaps more promising approach would be a multiple regression, fitting per capita residential water consumption to a variety of variables, with a dummy for whether or not the municipality requires low flow toilets and how long it has required them for.

2. Do low flow toilets cost more or less?

Water is cheap. Plumbers are expensive. So even if the answer to the first question is that low flow toilets decrease water use, as seems likely, they could easily increase total costs. Here again, one approach would be some kind of survey designed to see how often toilets clog and plumbers have to be called in, at what cost. An alternative would be a statistical study of the use of both water and plumber's services in municipalities that do or do not require low flow toilets.

3. Why were the requirements imposed?

Question 2 suggests an obvious conjecture--that low flow toilets were imposed, at least in part, in response to political pressure from plumbers, to increase the demand for their services. Is there any evidence to support that conjecture?

Testing Smith's Explanation of the End of Feudalism


Wine, Beer and Diamond Shoe Buckles

Adam Smith, in The Wealth of Nations, proposes a simple and ingenious explanation for the end of feudalism. It goes as follows:

Consider Europe in the early Middle Ages. You are a lord controlling territory. What can you do with the resulting income? There is, after all, a limit to how much you can eat and drink. You therefor use a considerable part of your income to support retainers--people who owe their living to you, look up to you--we all like feeling important--and will, if necessary, fight for you. Every lord has an army--more or less for free, since he has nothing better to do with his income--hence the political system is a decentralized one, where the King is really the leader of a coalition of lords.

Over time, trade develops, along with an increased division of labor. Now the wealthy lord has another way of spending his income--directly on himself. He supports fewer retainers and buys diamond shoe buckles instead. His income is still supporting lots of people--someone has to mine, cut and set the diamonds. But they are dispersed about the world, not assembled in his hall. His private army shrinks--because maintaining it now means giving up something else. The political system shifts from feudalism to monarchy.

It's an interesting conjecture. How might one test it?

Consider two lords. One controls territory best suited to produce local subsistence goods--wheat, beer, cattle. The other controls territory well suited to produce goods for foreign trade--wine, say. In order for the beer lord to buy diamond shoe buckles, he has to bear the cost of exporting produce in exchange. Buying retainers, on the other hand, involves no similar transport costs, since the retainers are in the same place where their food is buying produced.

The wine lord is already engaged in the export industry, since his land produces more wine than he and his people drink. He could use the resulting income to import beer and wheat to support retainers. But doing so involves paying two transport costs--wine out, wheat back. Diamond shoe buckles involve only one transport cost, since the buckles themselves are high value to weight goods with negligable cost of transportation.

Hence the relative cost of retainers his higher for the wine lord than for the beer lord. Hence, if Smith is correct, we should have seen feudalism last longest in places poorly suited to producing export goods, well suited to producing subsistence goods. For similar reasons, we should have seen feudalism last longest in places where transport costs were high--most obviously places far from good water transport, which in the Middle Ages was typically much less costly than overland transport.

The theory is, at least in principle, a testable one. It has been waiting more than two hundred years for someone to test it.

[More Coming]

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