Sitting on your Hands as an Alternative to Money
The old adage money can’t buy happiness apparently was never learned in the small town of Dilley, Oregon. Jonathan Hawes is a convicted sex offender who was released into society after serving a five-year prison sentence. Upon his release from prison he planned to move into his mother Wendy Brewton’s house in Dilley, Oregon. Under Megan’s Law, police are required to notify neighbors when a convicted sex offender is classified as predatory. Before Hawes was classified, Ms. Brewton’s daughter alerted neighbors of Hawes’ imminent arrival. This upset the small community of 300 to 400 people. Suddenly, neighbors began researching the use ...view middle of the document...
With Hawes arrival, they are on heightened alert for their children’s safety. This constant fear brings down the property values in the neighborhood because of its undesirable nature. Hawes is also harmed by not being able to move into familiar surroundings that he has a legal right to move into. In the end, the neighbors decided that the harm was great enough to warrant paying Ms. Brewton to not allow Hawes to move in.
Oregon has long had some of the most stringent sex offender laws. Even before the federal enactment of Megan’s law, convicted sex offenders in Oregon were required to post a black and yellow sign titled “Sex Offender Residence.” in their window. Now as part of Megan’s law, all registered sex offenders released from prison must meet certain living requirements as part of their parole/probation. Even after release, parole officers and psychiatric counselors strictly observe sex offenders. According to parole officer Bob Severe, the intended residence met the requirements because it was on an isolated twenty-seven acres. Upon release from prison, there are some restrictions on where a sex offender can live, but generally their civil rights are intact. Megan’s law amounts to a second sentence to sex offenders; however neighbors would argue that any inconvenience on the life of a sex offender is clearly outweighed by the neighbors' right to know that a potentially dangerous ex-convict has moved in next door.
How the Solution was derived:
In order for the transfer of property to take place, both parties must feel like they are maximizing their utility (put in a win-win situation). The final solution derived at is a maximization of utility because it is better than alternative solutions. Assuming Hawes had moved in, none of the parties would be better off. Everybody involved would live in constant fear. The neighbors would fear the terrible things Hawes might do to children and Hawes would fear what things the neighbors might do to him.
The final purchase price reached in this situation was the average of two assessments made on the property. However, the hatred the families felt toward Hawes meant that the families’ subjective value of the land was actually much higher than the sale price. The families were willing to do everything possible to keep the neighborhood safe, thus raising the subjective value placed on keeping Hawes out. Whereas, Ms. Brewton knew that if Hawes was to move in, her subjective value would be lower because of the constant threats and probable increase in security. When examined, the parties negotiated a division of the surplus between the two subjective values placed on the property by the parties.
Under this division of the surplus, the solution reached is probably Kaldor-Hicks efficient and potentially Pareto superior. For something to be Kaldor-Hicks efficient, individuals made better off by the transaction have to be made sufficiently better off...