All Externalities are Local...And also Reciprocal

What Tip O'Neill should have said is this: all externalities are local. Turns out that deer deterence also enfuriates neighbors.

Excerpt:

Jim Boswell, a third-generation Christmas tree farmer in central Montgomery County, insists that he's tried just about everything to stop the deer from devouring his evergreens.

But his neighbors didn't like his shooting, much less crouching in the bushes with a crossbow. Deer-repellent spray didn't work. And the local deer population, he says, has a knack for scaling six-foot fences.

In desperation, Boswell shelled out $500 for the CritterBlaster Pro, an electronic device that emits "harassment sounds" that promise to "irritate animals and bird pests so they leave - for good!" The screeching, beeping, whistles and noises that mimic animals in distress worked perfectly.

Too perfectly.

His neighbors in Skippack Township became as irritated as the deer - resulting in a $674 fine last month for Boswell for disturbing the peace. It also has triggered a court challenge that promises to test the state's Right to Farm Act and how far municipalities can go in regulating noise intended to protect crops.

"I am just trying to make a living the old-fashioned way - by farming." said Boswell, 45, whose family has been growing Christmas trees in the Skippack area since the 1940s. "I just want to sell my trees."

Like other farming states, Pennsylvania has laws aimed at protecting agriculture. In 1982, as housing developments began eating away at suburban farmland, the state enacted the Right to Farm Act to protect farmers from new residents who might complain about the smells and sounds of farming in their developing neighborhoods.

The law states that any municipality with a nuisance ordinance must exempt agricultural operations that do not have a "direct, adverse effect on the public health and safety."

Then, last year, the Agricultural, Communities and Rural Environment (ACRE) law was passed, giving farmers and the state attorney general the right to bypass local courts and go directly to Commonwealth Court to try to invalidate ordinances that unfairly restrict agricultural operations....

Boswell said farmers need the ability to protect themselves not just from crop predators, but from local officials and pesky neighbors. "It's like the Hatfields and the McCoys in this township," he said.

Boswell has nothing but praise for CritterBlaster, and he hopes to resume using it for a second season by the time the deer become a problem again in the fall.

"This thing has worked better than anything we've tried," Boswell said of CritterBlaster, which can be set to emit up to eight different "harassment sounds" at varying intervals from four speakers.

Mona Zemsky, marketing manager at Bird-X Inc., which manufactures the device, said the CritterBlaster can be played at decibel levels of up to 112 - but she said owners should be considerate.

"Not only do we have to share the environment with the deer, we have to share it with our neighbors," said Zemsky, who pointed out that many of their customers are in completely remote areas.

Boswell said that he kept the device at 55 decibels or below - at about the sound level of an air-conditioner - and that he couldn't hear it when his windows were shut.

"I was out there, and I heard it, and it certainly is annoying to me," said Skippack Township Manager Theodore R. Locker Jr., who filed the complaint against Boswell.

Neighbors said the device kept them up at night, scared their children, and drove dogs crazy.

"It sounds like hell," said neighbor Wayne Arena, who lives near the back of the 11-acre tree farm.

Arena and another Grange Avenue neighbor, Philip Burke, said the animal-in-distress sounds were the worst.

"It's a very annoying, disturbing sound that goes on all night long - I mean from dusk to dawn," said Burke, who said he sent Boswell a letter signed by 13 neighbors asking him to stop....

Burke said they all would relish some peace. But he said that Boswell shouldn't get "blanket protection" under farm-protection laws because he had encroached on their neighborhood.

"He's not the only one with rights," said Burke.

What is the right solution? That is, what would the Coase theorem dictate if there were not high transactions costs? I have always thought there is an interesting relation between Coase and Kaldor-Hicks (or Potential Pareto, or the Compensation Principle, or Cost-Benefit Analysis). The difference is that Coase makes the prediction that people bargaining will FIND the correct solution, if they are not thwarted by transactions cost. Kaldor-Hicks requires government action.

In this case, given the profit margin on a tree farm, I bet that the harm to the neighbors would be greater than the benefit of the noisemaker to the tree farm. But it would be interesting to see if the neighbors would pony up the amount of damages caused by deer. And that is what would have to happen, if the law is held to mean that the tree farmer is exempt.

In other words, maybe there should not be a tree farm there, if the noisemaker is the only feasible way to keep deer out (though I like the "crouching in the bushes with a crossbow" solution). But it is not clear that the farmer should bear the costs of the externality. Externalities are reciprocal; if the tree farm had no neighbors, there would be no problem.

So...what is the right thing to do here? Tell the neighbors to shut up? Force the farmer to turn off/down the noisemaker?

(Nod to RL, a human externality. A positive one, mind you)