Steve Marcus/Reuters

Lessons in celebrity location theory.

Members of the Kingdom of Bahrain recently attempted to prevent Kim Kardashian from visiting, citing her "bad reputation." It's not the first place that's tried to keep out the Kardashians. 

After being denied rentals in a host of areas in and around fashionable South Beach, Miami, the Kardashian sisters — Kim and Kourtney — set up shop for their new reality television seriesKourtney and Kim Take Miami, in the North Miami community of San Souci. 

Gossip pages follow these locational foible play-by-plays like some follow sports seasons, but here on Cities, we see them as providing curiously illuminating lessons in urban economics and location theory.

According to reports in the Miami press, San Souci has been less than enchanted with its new neighbors — or more precisely, with the circus that comes with them: not just family members, friends, production crews, stylists, publicists, and other assorted hangers-on and sycophants, but the huge crowds of fans and paparazzi. "They have dozens of cars parked all over the place," one exasperated resident told The Miami Herald. "I’m trying to sell a lot next door, and I can’t get buyers on the property." (In an ironic turn of events, the city recently gave the sisters "Keys to the City" in anticipation of production revenues, according to The Huffington Post.)

Here we have the first basic lesson in urban economics — "negative externalities." Negative externalities are the unpriced consequences of certain behaviors or decisions, such as buying a home downwind from a smoke-belching factory or next door to a rowdy bar — or granting a reality show the right to film within a community.

As economist Todd Gabe points out, the most cogent lesson it teaches has to do with the economics of "efficient locations."

A government solution [such as zoning] could separate the incompatible land uses of a Kardashian reality show and residential housing, but the limited number of parties involved makes this a classic case for a market-based solution through Coasian bargaining. The neighborhoods that refused entry to Kim and Kourtney...had the original property rights and evidently the Kardashians did not value the location enough to pay-off the residents, so they set up shop elsewhere.

The Kardashians exercised their property rights in San Souci through their "notice of filming," which locals could have rejected by paying Kim and Kourtney to move elsewhere. Since the negative impact to San Souci residents (reflected by what they would be willing to pay to keep the Kardashians out) is less than the benefit Kim and Kourtney receive from filming the show there, we have an efficient outcome.

Of course, if the San Souci residents had the right to a neighborhood free of the paparazzi, the Kardashians would pay the neighbors to compensate them for their inconvenience.

But, regardless of which party has the property rights, the efficient location is San Souci.

The Kardashian's locational foibles are far from unique. This celeb-versus-place conflict is starting to feel all too familiar — remember last summer's filming of Jersey Shore in Italy. In our celebrity-obsessed culture, you can certainly expect more of it in the future.

Top image: Kim Kardashian (L) and Kourtney Kardashian at the grand opening of the Kardashian Khaos store at the Mirage Hotel and Casino in Las Vegas on Dec. 15, 2011. (Steve Marcus/Reuters)

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