The Economist's Apprentice

In which a little girl confronts the world and battles the anti-humans.

Thursday, August 04, 2005

Limited Beachfront Property and Population Growth

There is only one Ocho Rios in Jamaica. Given that the amount of pristine beach front property is limited, it might happen that eventually it will all be occupied and that increases in population will decrease the percentage of people that can enjoy it. Surprisingly, the fact that natural paradise is limited, actually highlights an additional benefit of population growth.

As the wealth and the population of the U.S. grows, eventually Ocho Rios might hit its tourist capacity. In this case, increases in U.S. population would not increase the number of tourists in Jamaica, but it would increase the satisfaction experienced by the tourists. Why? Because the individuals who become Ocho Rios tourists would shift towards those that value the beach experience more highly. My daddy has been to Ocho Rios even though he is not a hardened beach bum. If the population of the U.S. had been twice as great, the number of devoted beach bums would have been doubled. Fanatics of planter's punch might have outbid my daddy for that hotel room. This shows how increased population helps make the most out of limited resources like beachfront property.

Of course, for now there are still new islands to commercialize. Real estate developers will probably see to it that there are plenty of beach front hotels for me to visit when I get older.


At 7:12 PM, Blogger Miss Anne Thrope said...

But how can you equate utility with the satisfaction of money-backed preferences? What if those who would derive the most satisfaction from beach happen to be poorer than average, and become unable to afford it?


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