Invoking the Coase Theorem for Fracking Noise
From Kevin Williamson's excellent article in National Review "The Truth About Fracking":
"There are other workaday environmental problems endemic to fracking: For the three to five days a frack lasts, it’s loud — really, really loud, because it’s basically a construction site, with a vast array of pumps and compressors and giant margarita mixers blending sand into the water, and a big battery of generators to run it all. There’s not much to be done about the noise, though you’re typically not fracking real close to densely populated areas.
A few firms have hit upon the novel approach of simply offering nearby homeowners money to go away for the week, expenses paid, or at least putting them up in a hotel for the duration. (An idled fracking rig might cost you $1 million a week — you can afford to pay a lot of HoJo bills to keep that from happening.)
This is a good example of the Coase theorem, which predicts that bargaining can lead to economically efficient outcomes when externalities (like noise in this case) are present and transaction costs are low.
HT: Gayle Pooley