Fascinating case of failed Coasian bargaining

How much would you pay in order not to listen to loud street music while working in your office?

The Washington Post (our new hometown paper) has an interesting story on this:

The band’s brassy riffs at 15th Street and New York Avenue NW always delight the hordes of tourists heading toward the White House. But the very spot that’s proved so profitable for Spread Love to pull in tips has also earned it the enmity of employees at two major Washington institutions: the Treasury Department and the law firm of Skadden, Arps, Slate, Meagher & Flom.

Apparently, the economists in charge of our nation’s financial stability and the attorneys who represent many of our country’s corporate high-rollers and white-collar criminal defendants are struggling to focus inside their offices because the band is so loud. They are hearing Spread Love spreading its love too much.

So the office workers offered to pay the band $200 a week. The band members declined, saying that they typically make that amount in an hour (unverified) from tourists.

The band’s director insists that they can sell the office workers a little quiet, if the price is right (just how much do the office workers value a little quiet while working? And what’s the band members’ opportunity cost of not spreading love?)

Apparently the band’s act is totally legal, as DC’s noise regulations are subordinate to individuals’ first amendment rights.

Also, notice how in certain instances government policies can create value for specific subsets of citizens by simply allocating “property” rights.

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