Here’s an odd story from Tennessee:
A local neighborhood is furious after firefighters watched as an Obion County, Tennessee, home burned to the ground.
The homeowner, Gene Cranick, said he offered to pay whatever it would take for firefighters to put out the flames, but was told it was too late. They wouldn’t do anything to stop his house from burning.
Each year, Obion County residents must pay $75 if they want fire protection from the city of South Fulton. But the Cranicks did not pay. The mayor said if homeowners don’t pay, they’re out of luck.
Obviously the more densely populated your town the less you’re going to want to sign on for this madcap experiment in quasi-privatized provision of government services. But part of what’s odd here is the mayor’s refusal to provide ex post firefighting services at any price. Since putting a fire out is much cheaper at the margin than rebuilding a burned-down house, it should be easy to set a pricing scheme that doesn’t entail any substantial adverse selection issues.
I think there’s a surprising amount of inefficiency in the world deriving from the fact that people with various competencies—fighting fires, organizing rock concerts, cooking tasty food—don’t really understand optimal pricing.
Previous in TP Yglesias
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