Coasian Bargaining on Wind Turbine Noise

Michael Giberson

Preston McAfee and Tracy Lewis introduce Coasian bargaining in their economics textbook with the question, “Can I just bribe my neighbor to stop being annoying?”  The complementary question, perhaps asked by the neighbor in question, “Can I just bribe my neighbor to stop being annoyed (or at least not to complain about me)?”

The New York Times reports that a wind power developer working in eastern Oregon is offering some residents near a power project $5,000 in exchange for an agreement not to complain about the noise made by wind turbines.  Many times neighbors to wind power projects have filed nuisance complaints, and often these complaints get nowhere in part due to lack of clear property rights.  In the case of Oregon a state industrial noise ordinance gives some clarity to the property right, enabling Coasian bargaining to proceed.