Friday, July 19, 2013

Common Scents: When Bacon Lovers Lobby for Property Rights

Apparently, not everyone loves the smell of bacon.
The trouble began in May, when this city's health department shut down a popular restaurant called Bacon Bacon after neighbors' complaints caused a permit delay. The neighbors' concern: the scent of bacon grease was blowin' in the wind. 
Now bacon lovers have found out, and they're raising a stink. 
Ahead of a permit hearing scheduled for Thursday, nearly 3,000 bacon advocates have signed a petition in support of Bacon Bacon. Phylis Johnson-Silk, who lives around the corner and loves the place, is making signs that say, "Bacon rules!" and "Really? You complained to the cops that you smelled bacon?"
This was from the Wall Street Journal, but there is a related, ungated article at the San Francisco Chronicle (written in May).  An interesting fact from the Chronicle piece:
A neighbor filed a discretionary review appeal a year later. That triggered an automatic hearing before the Planning Commission. Discretionary reviews can be expensive, time consuming and discouraging. In this case, Angelus said he was well aware that the ventilation needed to be upgraded, and he was ready to do it. 
"I need to do that anyway," he said. "I just wasn't going to do it until I knew it was approved." 
But he can't get the permits as long as the discretionary review hangs over the restaurant, so they're at a stalemate. On Friday, Angelus closed the cafe. 
Angelus said the new ventilation system "will totally take care of it," but Patterson said an air "scrubber" would be a better option. He said his client is willing to pay most of the cost of installing the scrubber, roughly $8,000.
The Bacon, Bacon case reminds me of Coase's Jolly Anglers example in The Problem of Social Cost (see pages 14-15).  In a nutshell, as Coase described, the Jolly Anglers were brewing beer as part of their club, but to do so, they had to ventilate their cellar.  This ventilation of the cellar introduced a fowl smell into a neighbor's yard, and the neighbor filed a suit to stop the ventilation.  In the end, the court concluded that the Jolly Anglers had the right to ventilate, essentially bestowing a right over the air (or at least smells introduced to it).  The Jolly Anglers case was in 1890.

Although the two cases are 123 years apart, the Jolly Anglers and Bacon, Bacon are quite similar.  Beyond their common smell-thy-neighbor theme, both cases are about externalities and the assignment of property rights.  In particular, who has the right to the air?  Coase's larger point in the article was that externalities -- such as the "fowl smell of bacon" -- are reciprocal in nature.  It is equally valid for the owner of Bacon, Bacon to cry out that the neighbor's complaint is infringing on his right to do business as it is for the neighbor to complain that the smell of bacon infringes on his right to fresh air.  Both parties have a right, but those rights are in conflict.

In this Coasean context, the Bacon, Bacon protests illustrate how important transaction and enforcement costs are. If it were clear who had the right to the air in the first place (Bacon, Bacon or the neighbor), the issue would have been resolved without a fuss and at lowest cost (that's the Coase Theorem), possibly through installing that $8000 air scrubber.  As it is, imperfect enforcement and the tendency to bend to the will of the Bacon, Bacon lobby implies that Bacon, Bacon protests (plus t-shirts and lobbying) are worth it.

If only the town council could commit to a decision at the outset, Bacon, Bacon would have less of an incentive to make a fuss in the first place.  Nevertheless, given the popularity of bacon, it is hard to imagine that this incentive would completely vanish.  This has been aggravated by fact that this has become a media bonanza, and has proven to be good advertising for Bacon, Bacon.  Now, that's something worth making a fuss.

No comments:

Post a Comment

Please feel free to share your ideas about this post in the open forum. Be mindful that comments in this blog are moderated. Please keep your comments respectful and on point.