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 of deadly force and the effect of watchdogs.The town called a meeting to discuss the situation with Ms. Brewton. The meeting became quite heated and at one point a resident threatened Hawes life. The meeting left it clear to Ms. Brewton that Hawes was not wanted in her house, which was located a mere 200 feet from a school bus stop. To resolve the conflict, at least three families pooled their money together and paid $250,000 to buy Ms. Brewton’s house. The families arrived at the dollar amount by taking the average of two state-approved appraisals on the twenty-seven acre land and house. The neighbors put $50,000 down and took out a mortgage on the remainder to insure that a convicted sex offender is not among them.Bilateral Problem:When analyzed from an economic perspective, it is clear that the problem of what to do to prevent Hawes from moving in is reciprocal. According to Coase, the traditional question would be if Hawes inflicts harm on the residents of Dilley how should Hawes be restrained. The real question is who should be allowed to harm whom to avoid the more serious harm. To analyze which harm is greater, both sides must be taken into account. The neighbors are attempting to avoid the potential harm to their neighborhood. With Hawes arrival, t...
