Describe a transaction that would benefit the fishers
Course:- Econometrics
Reference No.:- EM131134617

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Stream Preservation. Consider a trout stream that is threatened with destruction by a nearby logging operation. Each of the 10,000 local fishers would be willing to pay $5 to preserve the stream. The owner of the land would incur a cost of $20,000 to change the logging operation to protect the stream.

a. Is the preservation of the stream efficient from the social perspective?

b. If the landowner has the right to log the land any way he wants, will the stream be preserved?

c. Propose a solution to this problem. Describe a transaction that would benefit the fishers and the landowner.

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