Wednesday, April 29, 2009
iPods, Decibels and Externalities
Occasionally, I would get to observe some interesting happenings while traveling on MRT trains. Sometimes, there are couples, on the train, behaving intimately and absorbed into their own contructed reality. And there are also people listening to their favourite music on their iPods or MP3 players. In addition, there are also people who have to tolerate listening to music 'forced' upon them by fellow commuters listening to their iPods, standing or sitting in close vicinity. I am not trying to suggest here that those listening to their iPods are sadistic who love to impose on others the music they like. However, I believe, in the attempt of trying to cancel out the noise of the train moving on the tracks and also the noisy chattering of other commuters (and thus, being able to better appreciate the music playing on their iPods) people listening to their iPods may have played their iPods too loudly so much so that the music they are listening to are audible to their fellow commuters (I have met with one extreme case in which I was able to hear loud and clear what the person beside me was listening to on his iPod).
While listening to their iPods at high decibel maybe enjoyable for the listener, it may inflict negative externalities (external cost) on people around the listeners who feel that they are seemingly ‘forced’ to listen to the music, as they may find the music they are ‘forced’ to listen annoying or irritating, and hence decrease their enjoyment of travelling on MRT train.
To illustrate, assume that on a fictional scenario there are only two passengers on a train: Ms. Melody (listening to her iPod at high decibel) and Mr. Wolverine (who is 'forced' to listen to the loud music until he alights the train).
If Ms. Melody lowers the volume of her iPod to a level that would only be audible to herself and not to Mr. Wolverine, their enjoyment of their ride on the train would be the same, assuming all other things being equal.
On the other hand, if Ms. Melody continues listening to her iPod at a volume which makes the music she is listening audible not only to herself but also to Mr. Wolverine, it might result in a decrease of Mr. Wolverine’s enjoyment of the ride (as Mr. Wolverine might find the music annoying and irritating) and hence, inflict a negative externality on him. At the same time, Ms. Melody enjoyment of the ride might increase. The increase in the level of enjoyment might be due to being able to enjoy the music without having to listen to the noise of the moving train and noises from other sources.
The follow illustrates the enjoyment levels, in monetary value*, of the two passengers when Ms. Melody is listening to her iPod at low decibel and also at high decibel in monetary terms.
*Assuming we could assign a value to the enjoyment level of the two passengers in the scenarios described above.
At Low Decibel At High Decibel
Mr. Wolverine’s Enjoyment of the train ride | $20 | $10 |
Ms. Melody’s Enjoyment of the train ride | $20 | $50 |
In the table above, it can be seen that Mr. Wolverine’s enjoyment of the ride has decreased by $10, in other words, Ms. Melody’s act of listening to her iPod at high volume has generated an external cost of $10 on Mr. Wolverine.
Since, lower the volume of her iPod would also cause her enjoyment of the train ride to decrease, Ms. Melody has no motivation to lower the volume on her iPod, even though listening to her iPod at high volume inflicts an external cost on her fellow commuter.
However, things can be made better. Ms. Melody can offer Mr. Wolverine $20, for allowing her to continue listening to her iPod without lowering the volume, and hence increasing his enjoyment of the ride to ($10 + $20) $30 (which is better than when Ms. Melody had lowered the volume on her iPod). In addition, Ms. Melody get to continue enjoying the music on her iPod without lowering the volume. Both Mr. Wolverine and Ms. Melody are better off than when Ms. Melody had simply lowered the volume on her iPod. A win-win situation if you asked me.
By Zhi Qiang
Labels: externality
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