Friday, May 2, 2014

Week 8: The Opportunity Costs of Paving Paradise

Week 8 began with one of my all-time favorite songs "Big Yellow Taxi".  It's a song that I grew up with and one that our very musical family sings at almost every family gathering when the guitars come out, so I know the lyrics very well.  The overall message that I always took away from it came from the line "you never know what you've got til it's gone".  In other words, as human beings, we often don't appreciate what we have or realize how much it's really worth to us until we have lost it.  When that loss is more or less permanent, we and the people who come after us are often left to ponder the consequences of our actions.  Were the right choices made?  Is the situation better now, or are things worse?

Because I'm very familiar with Joni Mitchell, the artist who wrote the song, I know that she meant it as a commentary on how we take our beautiful planet for granted in favor of urbanization, money-making opportunities and convenience.  After all, she has long been an environmental activist, participating in the Greenpeace movement even in its early stages.  

But, looking at the lyrics in class forced me to look at the issue from a different perspective.  Development has never occurred without urbanization (Bertinelli & Black 2004).  In fact, 80.2% of the total population in high income countries lives in urban areas compared to 28.2% in low income countries as of 2012 (The World Bank 2014).  As much as the hippie in me hates to admit it, parking lots do serve a purpose.  It's actually difficult to imagine a high-income society without any, even ones with well-functioning public transit systems.  The truth is that it is much easier for people to drive from point A to point B in their own cars.  It's more convenient, it saves time and can help people to be more productive since they can do what they need to do according to their own schedule.  In the end, it comes down to whether the trade is really worthwhile.  To figure that out, we need to know more about the opportunity costs and perform a cost benefit analysis.  

To start, what is an opportunity cost?  The definition according to Todaro and Smith 2009 is: 

"In production, the real value of resources used in the most desirable alternative-for example, the opportunity cost of producing an extra unit of a manufactured good is the output of, say, food that must be forgone as a result of transferring resources from agricultural to manufacturing activities.  In consumption, the amount of one commodity that must be forgone in order to consume more of another."(p.833)

In essence, a resource used in one capacity is a resource taken from elsewhere and opportunity cost is the sacrifice that is made in one area to accomplish something else .  When we make a decision to do one thing over another, for instance, go to university instead of work, the opportunity cost would be the earnings that we are missing out on during that time that we spend studying.

The opportunity costs of development in the song include:

  • Trading paradise for a parking lot, a hotel, a boutique and a "swingin' hot spot" (probably a nightclub or bar).
  • Giving up birds and bees to use pesticides like DDT so that we can have pristine-looking apples with no spots.
  • Taking down trees (probably for other purposes such as creating space for buildings or using the wood for products) and putting the ones that are left into a museum that we can charge people admission for (business opportunity).

Part of the challenge in performing a cost benefit analysis prior to making those decisions is highlighted in the song "you don't know what you've got til' it's gone".  In truth, it's difficult to predict exactly what the broader impact will be of choosing the parking lot over paradise and therefore to know which will be more beneficial.  That is why it's so hard to know where to draw the line when it comes to choosing urbanization over the environment.  We obviously have a responsibility to try to coexist with the other species and natural systems in our surroundings so that we do not completely destroy the processes that keep our planet liveable.  Once we alter the components of an ecosystem, for instance remove all of the trees and/or displace entire populations of animals (sunk cost), it's very difficult to reverse those changes and return everything to the way that it was if it turns out that the trade was not worthwhile.  But, we also want to thrive as a species and industrialization has allowed for unprecedented progress and development in human societies.   

Here's a review of some of the benefits of urbanization:
  • Development and all that goes along with it. 
  • Better access to healthcare and education services because of increased proximity.
  • Lower mortality and birth rates and increases in life expectancy.
  • Different job markets and more employment prospects.
  • Higher levels of female participation in the workforce outside of the home as a result of increases in job opportunities, which can help promote female independence and reduce gender inequality.
  • Shorter travel distances and therefore less time wasted in transit allowing for more time to be devoted to other things such as doing work, reading, recreational activities, etc.
  • All of these factors lead to higher levels of productivity, which increases income, spending, savings, investment and therefore economic growth in the country (after a temporary period of negative growth at the beginning of the demographic transition when life expectancy increases)
  • Increased income also means that people have more money to spend on keeping themselves and their families healthy (less of a burden on the healthcare system) so that they can continue to be productive.

 And the negative aspects of urbanization:
  • Reduced living space for plants and wildlife leading to a complete shift in the area's ecosystem.
  • Poor air quality and smog due to increased use of motor vehicles with combustion engines in a small, congested area and fewer trees to convert carbon dioxide to breathable oxygen.  This can lead to higher rates of breathing problems and lung conditions such as pneumonia, chronic obstructive pulmonary disease and asthma, thereby negatively affecting the health and wellness of those living in urban areas (Ramin 2009).
  • Urbanization leads to vast stretches of pavement that cover the soil and the uprooting of vegetation, both of which serve to absorb and retain water, thereby increasing the likelihood of flooding (Ramin 2009).
  • The high motor vehicle usage that goes along with urbanization increases the number of motor vehicle injuries and deaths, placing added pressure on healthcare systems and increasing the populations mortality and disability rates.
  • If large masses of people migrate into urban areas in a short period of time for work and a better life, a lack of sufficient proper housing can result in overcrowding and the spread of informal dwellings or "slums" (90% of which are in developing countries) (WHO 2014).  The World Health Organization estimates that close to a billion people reside in slums and that if current trends continue, that number will increase to 2 billion in 30 years time (Ramin 2009).

 The proliferation of slums brings with it an additional set of problems:
  • Living conditions in slums are very poor as there are generally no basic services such as regular waste removal, water and sewage systems (including drainage) or electricity (Ramin 2009).  The densely-populated environments combined with the reduced capacity for proper hygiene and sanitation, provide the perfect breeding ground for illness and the spread of communicable disease (Ramin 2009).  
    • Mosquito-borne illnesses such as malaria, yellow fever and dengue are an issue because stagnant water is conducive to mosquito breeding. 
    • Lack of access to clean water, hygiene and sanitation (including the proper containment and treatment of waste from pit latrines from drinking wells) can cause outbreaks of water-related diseases such as dysentery, typhoid, cholera, cryptosporidium and e.coli, especially during heavy rainfall and flooding (Kimani-Murage & Ngindu 2007; Ramin 2009).  A study involving urban slum-dwelling children in Kenya also reported an increased prevalence of soil-transmitted helminth infections, even with frequent deworming (Suchdev et al. 2014).  These diseases contribute to malnutrition and dehydration (Suchdev et al. 2014).
    • The close proximity due to overcrowding increases transmission of diseases that are spread by droplets that are sneezed, coughed or breathed into the air (i.e. tuberculosis, pertussis and influenza) (Ramin 2009; WHO 2014).
  • Populations living in slums are profoundly affected by extreme levels of poverty.  They often reside in households where the traditional family structure has dissolved (single-parent or no parent households, perhaps with several cousins, grandparents or family friends living there as well) (WHO 2014).  
  • Despite their proximity to city centers and the increased employment opportunities and services therein, these groups still experience high levels of unemployment and poor access to health services (possibly due to adverse economic circumstances and social barriers and prejudices promoting exclusion) (WHO 2014).
  • The rampant extreme poverty makes it very difficult for people living in slums to afford nutritious food and clean drinking water.  This situation is exacerbated when supplies are limited (as they often are in these settings), resulting in very high prices.  In fact, the cost of one liter of water in East Africa is 5-7 times what North Americans typically pay (Commission on Social Determinants of Health, cited in Ramin 2009).
  • A study performed in India showed that changes in behavior such as smoking and increased alcohol consumption, etc were associated with living in urban slum communities and increased the risk factors for non-communicable diseases in all age groups (Anand et al. 2007).
  • Personal safety and security are issues in urban slums as the housing is poorly constructed and subject to structural failure and therefore does not provide much protection from the elements or criminal behavior (WHO 2014).  
  • Slums tend to report higher rates of crime and many young people growing up in those conditions who have never seen the world outside of the slum see no other way than to participate in illegal activities (Fraser 2011; WHO 2014).
  • People residing in slum dwellings do not have secure, guaranteed occupancy or any real rights as tenants as they are technically living in those areas illegally (WHO 2014).  Therefore, they can easily be forced to vacate their homes without contest, notice or compensation.
  •  All of these factors (lack of access to healthcare and clean water, high transmission of illness, poor nutrition, etc) combine to have severe negative implications for the health of individuals living in slums, particularly children.  In fact, the rates of child mortality in Nairobi are 2.5 times higher among slum populations than elsewhere in the city (Commission on Social Determinants of Health, cited in Ramin 2009).  Ill health during childhood could impede proper growth, development and learning, which in turn will likely hinder adult health and output.  A study from Uganda published in 2012 reported that children attending school in slums were 1.7 times more likely to suffer from stunting than those in rural schools (Francis, Kirunda & Orach).  Ultimately, the detrimental effects of living in a slum almost certainly perpetuate the cycle of poor health, limited productivity and poverty.

Moving forward it will be increasingly important to decipher and balance how much urbanization is necessary to promote and sustain development and how many changes might have catastrophic environmental repercussions.  It will also be imperative to actively address the issue of rapid unregulated urbanization and limit its undesirable consequences.  Otherwise, the cost of urbanization may very well outweigh the benefits.



Anand K, Shah B, Yadav K, Singh R, Mathur P, Paul E & Kapoor SK 2007, 'Are the urban poor vulnerable to non-communicable diseases? A survey of risk factors for non-communicable diseases in urban slums of Faridabad', The National medical journal of India, vol. 20, no. 3, pp. 115-120.  Available from: <>. [2 May 2014].

Bertinelli L & Black D 2004, 'Urbanization and growth', Journal of Urban Economics, vol. 56, no. 1, pp. 80-96.  Available from: <>. [2 May 2014].

Francis L, Kirunda BE & Orach CG 2012, 'Intestinal Helminth Infections and Nutritional Status of Children Attending Primary Schools in Wakiso District,  Central Uganda', International Journal of Environmental Research and Public Health, vol. 9, no. 8, pp. 2910-2921.  Available from: <>. [2 May 2014].

Fraser B 2011, ‘Growing up in Rio’s favelas’, The Lancet, vol. 377, no. 9779, pp. 1735-1736.  Available from: <>. [15 May 2014].
Kimani-Murage EW & Ngindu AM 2007, 'Quality of Water the Slum Dwellers Use: The Case
of a Kenyan Slum', Journal of Urban Health, vol. 84, no. 6, pp. 829-838.  Available from: <>. [2 May 2014]. 

Ramin B 2009, 'Slums, climate change and human health in sub-Saharan Africa', Bulletin of the World Health Organization, vol. 87, no. 12, pp. 885-964.  Available from: <>. [2 May 2014].

Suchdev PS, Davis SM, Bartoces M, Ruth LJ, Worrell CM, Kanyi H, Odero K, Wiegand RE, Njenga SM, Montgomery JM & Fox LM 2014, 'Soil-Transmitted Helminth Infection and Nutritional Status Among Urban Slum Children in Kenya', The American Journal of Tropical Medicine and Hygiene, vol. 90, no. 2, pp. 299-305.  Available from: <>. [2 May 2014].

The World Bank 2014, Urban Population (% of total): Data: Graph: Low Income and High Income Countries.  Available from: <>. [2 May 2014].

The World Health Organization (WHO) 2014, Global Health Observatory: Slum residence.  Available from: <>. [2 May 2014].

Todaro MP & Smith SC 2009, Economic Development, 10th edn, Addison Wesley: Pearson Education Limited, Harlow.

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