why is the market for long term care insurance so small abstract long term care represents one of the largest uninsured financial risks facing the elderly in the united states we present evidence of supply side market failures in the private long term care insurance market in particular the typical policy purchased exhibits premiums marked up substantially above expected benefits it also provides very limited coverage relative to the total expenditure risk however we present additional evidence suggesting that the existence of supply side market failures is unlikely by itself to be sufficient to explain the very small size of the private long term care insurance market in particular we find enormous gender differences in pricing that do not translate into differences in coverage and we show that more comprehensive policies are widely available if seldom purchased at similar loads to purchased policies this suggests that factors limiting demand for insurance are also likely to be important in this market our evidence also sheds light on the likely nature of these demand side factors

strategic offering for a wind power producer as a result of subsidies and technological maturity renewable electricity producers have grown in some jurisdictions to clearly dominant positions in the market under this context we propose an offering strategy for a wind power producer with market power that participates in the day ahead market as a price maker and in the balancing market as a deviator uncertainty pertaining to wind power production and balancing market price is represented through a set of correlated scenarios the proposed model is a stochastic mathematical program with equilibrium constraints mpec that can be recast as a tractable mixed integer linear programming milp problem which is solvable using available optimization software results from an illustrative example and two case studies show the effectiveness of the proposed model

recent advances in the valuation of ecosystem services and biodiversity recent interest in the economics of biodiversity and wider ecosystem services has been given empirical expression through a focus upon economic valuation this emphasis has been prompted by a growing recognition that the benefits and opportunity costs associated with such services are frequently given cursory consideration in policy analyses or even completely ignored the valuation of biodiversity and ecosystem services is therefore increasingly seen as a crucial element of robust decision making and this has been reflected in a growing body of related research we provide a critical review of some of this research considering the valuation methods applied to date and focussing upon their limitations in respect to certain categories of ecosystem services particularly cultural services and the applicability of the extant literature to new settings substantial questions also remain at the interface of natural science and economics and we consider the potential contribution of the conceptualization of ecosystems as assets as a response to this challenge as part of this review we also highlight the role which large scale ecosystem assessments have played as an impetus to extending the valuation evidence base and the way in which frameworks and assessments of how ecosystems contribute to human wellbeing might be translated into policy thinking and decision analyses

intraday trading of wind energy in this paper we tackle the problem of a wind power producer participating in a short term electricity market that allows for the continuous but potentially illiquid intraday trading of energy considering the realistic case of a wind farm operating in the western danish price area of nord pool we build a simple but effective algorithm for the wind power producer to fully benefit from the elbas intraday market we then investigate the sensitivity of the obtained benefits to the maximum volume of energy the wind power producer is willing to trade in the intraday market the ultimate aim of the trade either to decrease energy imbalances or to increase profits and to the installed capacity of the wind farm our numerical results reveal that the wind power producer can substantially increase his revenues by partaking in the intraday market but with diminishing returns to scale a result that we attribute to the low liquidity of elbas

critique and transformation on the hypothetical nature of ecosystem service value and its neo marxist liberal and pragmatist criticisms abstract ecosystem service valuation esv attempts to transform the opposition of human economic necessity and ecological conservation by valuing the latter in terms of the services rendered by the former however despite a number of esv inspired sustainability initiatives since the 1990s global ecological degradation continues to accelerate this suggests that esv has fallen far short of its goals of sustainable social transformation a failure which has generated considerable criticism this paper reviews three prominent lines of esv criticism 1 the neo marxist criticism which emphasizes the fictitious character of ecosystem commodities 2 the liberal criticism through friedrich hayek s concept scientistic objectivism and 3 the pragmatist criticism of value monism although each form of criticism provides insight into the limitations of esv all share esv s inability to discern what kind of social transformation is possible unable to provide an account of their own immersion in social and historical context these approaches operate in the hypothetical in light of these shortcomings this paper advances a critical theory approach which we contend provides conceptual tools uniquely well suited to more adequately address the question of social transformation

bringing wind energy to market wind energy is a rapidly growing source of renewable energy generation however the current extra market approach to its assimilation into the electric grid will not scale at deep penetration levels in this paper we investigate how an independent wind power producer might optimally offer its variable power into a competitive electricity market for energy starting with a stochastic model for wind power production and a model for a perfectly competitive two settlement market we derive explicit formulae for optimal contract offerings and the corresponding optimal expected profit as wind is an inherently variable source of energy we explore the sensitivity of optimal expected profit to uncertainty in the underlying wind process we also examine the role of forecast information and recourse markets in this setting we quantify the role of reserves in increasing reliability of offered contracts and obtain analytical expressions for marginal profits resulting from investments in improved forecasting and local auxiliary generation the formulae make explicit the relationship between price signals and the value of such firming strategies

a stated preference valuation of the non market benefits of pollination services in the uk using a choice experiment survey this study examines the uk public s willingness to pay to conserve insect pollinators in relation to the levels of two pollination service benefits maintaining local produce supplies and the aesthetic benefits of diverse wildflower assemblages willingness to pay was estimated using a bayesian mixed logit with two contrasting controls for attribute non attendance exclusion and shrinkage the results suggest that the uk public have an extremely strong preference to avoid a status quo scenario where pollinator populations and pollination services decline total willingness to pay was high and did not significantly vary between the two pollination service outputs producing a conservative total of 379m over a sample of the tax paying population of the uk equivalent to 13 4 per uk taxpayer using a basic production function approach the marginal value of pollination services to these attributes is also extrapolated the study discusses the implications of these findings and directions for related future research into the non market value of pollination and other ecosystem services

gender role attitudes and the labour market outcomes of women across oecd countries this paper uses data from the world value surveys 1990 1995 1999 to investigate the impact of gender role attitudes and work values on women s labour market outcomes across 25 oecd countries anti egalitarian views are found to display the strongest negative association with female employment rates and the gender pay gap these views are however softening among recent cohorts on the other hand perceptions of women s role as homemakers which are likely formed in youth and linked to religious ideology are more persistent over time they could be implicated in the recent slowdown of the gender convergence in pay finally the unavoidable clash between family values and egalitarian views that takes the form of an inner conflict for many women the so called mother s guilt is another obstacle in the path towards greater gender equality in the labour market copyright 2005 oxford university press

multiple dimensions of private information evidence from the long term care insurance market we demonstrate the existence of multiple dimensions of private information in the long term care insurance market two types of people purchase insurance individuals with private information that they are high risk and individuals with private information that they have strong taste for insurance ex post the former are higher risk than insurance companies expect while the latter are lower risk in aggregate those with more insurance are not higher risk our results demonstrate that insurance markets may suffer from asymmetric information even absent a positive correlation between insurance coverage and risk occurrence the results also suggest a general test for asymmetric information

economic valuation of the vulnerability of world agriculture confronted with pollinator decline there is mounting evidence of pollinator decline all over the world and consequences in many agricultural areas could be significant we assessed these consequences by measuring 1 the contribution of insect pollination to the world agricultural output economic value and 2 the vulnerability of world agriculture in the face of pollinator decline we used a bioeconomic approach which integrated the production dependence ratio on pollinators for the 100 crops used directly for human food worldwide as listed by fao the total economic value of pollination worldwide amounted to 153 billion which represented 9 5 of the value of the world agricultural production used for human food in 2005 in terms of welfare the consumer surplus loss was estimated between 190 and 310 billion based upon average price elasticities of 1 5 to 0 8 respectively vegetables and fruits were the leading crop categories in value of insect pollination with about 50 billion each followed by edible oil crops stimulants nuts and spices the production value of a ton of the crop categories that do not depend on insect pollination averaged 151 while that of those that are pollinator dependent averaged 761 the vulnerability ratio was calculated for each crop category at the regional and world scales as the ratio between the economic value of pollination and the current total crop value this ratio varied considerably among crop categories and there was a positive correlation between the rate of vulnerability to pollinators decline of a crop category and its value per production unit looking at the capacity to nourish the world population after pollinator loss the production of 3 crop categories namely fruits vegetables and stimulants will clearly be below the current consumption level at the world scale and even more so for certain regions like europe yet although our valuation clearly demonstrates the economic importance of insect pollinators it cannot be considered as a scenario since it does not take into account the strategic responses of the markets

bee pollination and productivity growth the case of alfalfa the spread of commercial pollination has received little attention in the literature analyzing the growth in u s agricultural productivity between world war i and 1960 growers of most fruits nuts and seeds came to realize that intensive bee pollination was essential to achieve high yields alfalfa seed growers were among the last groups to adopt commercial pollination this article examines the dramatic impact that concentrating bees in alfalfa seed fields had on yields which resulted in the restructuring of the alfalfa industry the fourth most valuable commodity grown in the united states in the 1950s

bidding strategy of virtual power plant for participating in energy and spinning reserve markets part i problem formulation this paper addresses the bidding problem faced by a virtual power plant vpp in a joint market of energy and spinning reserve service the proposed bidding strategy is a non equilibrium model based on the deterministic price based unit commitment pbuc which takes the supply demand balancing constraint and security constraints of vpp itself into account the presented model creates a single operating profile from a composite of the parameters characterizing each distributed energy resources der which is a component of vpp and incorporates network constraints into its description of the capabilities of the portfolio the presented model is a nonlinear mixed integer programming with inter temporal constraints and solved by genetic algorithm ga

where is the value in valuing pollination ecosystem services to agriculture abstract current national and global scale monetary valuation of pollination services do not accurately estimate the contribution of wild pollinators to agricultural production first ecosystem wild pollination services remain largely bundled with those of managed pollinators this problem is compounded by the fact that the dependency of crops on pollination a key parameter used in current valuations does not reflect variation in pollinator density crop cultivars and growing conditions that exist in practice over half of the 153 billion of estimated global pollination service value in 2005 is based on estimates of pollinator dependency from crops with fewer than three field studies that measure actual levels of pollinator activity and corresponding fruit set the resulting uncertainty may be most distorting when applied to widely planted intensive oilseed crops furthermore current valuations are underpinned by simplistic assumptions regarding the likelihood of pollinator decline and the impact on agricultural prices although efforts to motivate wild pollinator protection through their ecosystem service value remain highly circumscribed by conceptual and empirical limitations we identify the need to go beyond technical solutions and develop a critical framework that could account for why pollinator conservation has come to be predominantly justified in these terms to begin with

trading wind generation from short term probabilistic forecasts of wind power due to the fluctuating nature of the wind resource a wind power producer participating in a liberalized electricity market is subject to penalties related to regulation costs accurate forecasts of wind generation are therefore paramount for reducing such penalties and thus maximizing revenue despite the fact that increasing accuracy in spot forecasts may reduce penalties this paper shows that if such forecasts are accompanied with information on their uncertainty i e in the form of predictive distributions then this can be the basis for defining advanced strategies for market participation such strategies permit to further increase revenues and thus enhance competitiveness of wind generation compared to other forms of dispatchable generation this paper formulates a general methodology for deriving optimal bidding strategies based on probabilistic forecasts of wind generation as well as on modeling of the sensitivity a wind power producer may have to regulation costs the benefits resulting from the application of these strategies are clearly demonstrated on the test case of the participation of a multi mw wind farm in the dutch electricity market over a year

the macroeconomic cost of catastrophic pollinator declines we develop a computable general equilibrium cge approach to assess the macroeconomic impacts of productivity shocks due to catastrophic losses of pollination ecosystem services at global and regional scales in most regions producers of pollinator dependent crops end up benefiting because direct output losses are outweighed by increased prices while non agricultural sectors experience large adverse indirect impacts resulting in overall losses whose magnitudes vary substantially by comparison partial equilibrium analyses tend to overstate the costs to agricultural producers understate aggregate economy wide losses and overstate the impacts on consumers welfare our results suggest an upper bound on global willingness to pay for agricultural pollination services of 127 152 billion

family ties and the crowding out of long term care insurance insurance for long term care ltc has developed only moderately compared to other areas of welfare which has been explained variously as the result of market failures public misconceptions of the risk of ltc needs and intergenerational contracts this paper offers a cultural explanation for the limited ltc insurance development in europe it argues that family ties by enhancing informal care giving duties inhibit individuals expected public and private insurance coverage the empirical analysis of the paper exploits cross country and sub group variability of a representative database of european union member states containing records on ltc coverage and family structure drawing upon two measures of familistic culture or family ties we find a negative association between family ties and expected coverage of ltc for different sub samples these results are robust to a set of checks for different definitions of family ties and controls and for a sub sample of first and second generation migrants policy implications suggest that widespread expansion of ltc coverage might need to accommodate existing familistic cultural norms to avoid insurance crowding out

exploring the role of economic incentives and spillover effects in biodiversity conservation policies in sub saharan africa abstract a vast array of empirical work investigates the issue of biodiversity conservation but the focus is often limited on the search for possible causes of biodiversity erosion biodiversity conservation policymaking is still understudied in this study this gap is empirically addressed on a sample of 48 sub saharan countries over the 1990 2009 period taking the ecoregion protection score provided by the center for international earth science information network ciesin as a measure of biodiversity conservation policies it is sought whether economic incentives such as biodiversity targeted international transfers as well as tourism revenues have an impact on biodiversity conservation policies moreover spillover effects are also hypothesized owing to the public good character of biodiversity conservation policies international financial assistance as well as tourism are found to have an effect on biodiversity conservation policymaking our results also evidence complementary spatial spillover effects between biodiversity conservation policies

spot and reserve market equilibria and the influence of new reserve market participants abstract there is a broad consensus that the energy transition planned in europe demands a sufficient number of flexibility providers this contribution proposes to analyse effects of reserve flexibility from chp encompassing both the price effects on spot and secondary reserve markets in an endogenous market equilibrium model through the analysis of contrasting cases it highlights how the specific nature of chp plants and in particular their heat restrictions lower the cost at which they contribute to the reserve and spot markets due to implied must run conditions a somewhat stylized fundamental market model based on input data for germany in 2016 is used to analyse the price effects of reserve flexibility from combined heat and power chp entering both markets additionally the impact of changes in the reserve market auction design in germany is investigated from june 2018 on secondary reserve in germany is auctioned in four hour tenders instead of the previous weekly peak off peak auction design we therefore compare the results under such an alternative auction regime with the same demand our approach leads to spot prices at a similar mean level compared to historical data with mean absolute error mae values in a range from 6 0 to 6 6 mwh for all cases the reserve price levels in this approach also compare to mean historical price levels yielding mae values in the range of 2 6 7 1 mw h for positive and 0 8 2 2 mw h for negative reserves the price lowering effect of flexibility provision from chp is clearly identifiable underscoring the importance of explicit modelling of heat demand restrictions a change of the reserve tender regime towards 4 hour tenders further lowers positive reserve prices in all cases finally a short term future scenario of the german power sector is investigated in order to estimate the development of reserve markets with current market developments finding that in the short term future price lowering effects from chp are likely to be overcompensated by higher spot price volatility due to rising fuel and emission prices

valuing ecosystem services on the basis of service providing units a potential approach to address the endpoint problem and improve stated preference methods abstract standardized methods are required to measure ecosystem services in order to value them in this paper we argue that the service providing unit spu concept may help achieve this objective by promoting the systematic quantification of the key components of nature that provide services e g population density of a key pollinator and linking these with measurable outcomes for human well being we discuss and provide examples of the potential role of the spu concept in improving economic valuation of ecosystem services further we suggest the concept may contribute to addressing the endpoint problem which can be defined simply as the inability of researchers to communicate the implications of environmental change in a way that is understood by a broad cross section of society the endpoint problem is of particular relevance to stated preference approaches and we discuss the capacity of the spu concept to refine these approaches we argue that the concept enhances interdisciplinary collaboration promoting more validated well informed valuation applications it also has the potential to minimize warm glow effects and put the notion of marginal changes in the provision of ecosystem services in a new light

the rational nonpurchase of long term care insurance only a tiny fraction of the nonpoor population currently purchases private insurance coverage against long term care ltc costs studies generally attribute the failure to purchase private coverage to unawareness by potential purchasers of the benefits of coverage and a misperception that medicare currently covers long term care i explore alternative reasons for failure to purchase coverage by well informed expected utility maximizing risk averse individuals for whom ltc is associated with a large increase in mortality and for whom family members represent an alternative source of care there may be no demand for ltc insurance even if it is made available at actuarially fair premiums because the main consequence of coverage is to enhance the expected value of one s estate

opportunity cost bidding by wind generators in forward markets analytical results wind generation must trade in forward electricity markets based on imperfect forecasts of its output and real time prices when the real time price differs for generators that are short and long the optimal forward strategy must be based on the opportunity costs of charges and payments in real time rather than a central estimate of wind output we present analytical results for wind s optimal forward strategy in the risk neutral case the optimal strategy is determined by the distribution of real time available wind capacity and the expected real time prices conditioned on the forward price and wind out turn our approach is simpler and more computationally efficient than formulations requiring specification of full joint distributions or a large set of scenarios informative closed form examples are derived for particular specifications of the wind price dependence structure in the usual case of uncertain forward prices the optimal bidding strategy generally consists of a bid curve for wind power rather than a fixed quantity bid a discussion of the risk averse problem is also provided an analytical result is available for aversion to production volume risk however we doubt whether wind owners should be risk averse with respect to the income from a single settlement period given the large number of such periods in a year

adding realism to the agglomeration bonus how endogenous land returns affect habitat fragmentation abstract the agglomeration bonus has been shown to be a potentially successful policy to reunite fragmented habitat and increase conservation enrollment in laboratory testbed experiments yet one key criticism has been that land prices have been assumed exogenous and fixed in these experiments in the field voluntary conservation enrollment by landowners will likely affect the value of the surrounding land this endogeneity of land values suggests a discrepancy between results from laboratory experiments and true landowner decisions under a given policy we address this concern by using an experimental design that accounts for the endogenous effect on surrounding land values from habitat conservation based on estimated returns from an actual landscape in eastern wyoming as a case study we show that without incorporating endogenous land values traditional laboratory experiments likely will underestimate the amount of habitat fragmentation resulting from basic conservation policies without agglomeration bonuses we also find that a low cost agglomeration bonus can work to reunite this fragmented habitat even under endogenous land value conditions our research indicates that through voluntary conservation decisions by private landowners a more cost effective bonus scheme can create contiguous habitat across privately held land even when incorporating realistic endogenous land values

automatic responses of crop stocks and policies buffer climate change effects on crop markets and price volatility abstract climate change has the potential to affect crop prices and price volatility however the economic models used in prior assessments largely do not include known automatic stabilizing factors crop storage can stabilize prices and u s crop policy tends to provide support that moves opposite prices we quantify effects of circa 2050 climate forcing on the inter annual variability of u s corn belt corn and soybean yields using statistical crop models and climate scenarios from regional and global climate models climate change generally reduces mean yields and increases the inter annual variability of yields in the midwestern u s using these yield impacts and an economic model with automatic market stabilizers we find only modest increases in price volatility although individual producers and states are negatively affected by the yield reductions the aggregate effect for all corn and soybean producer returns can be positive because of price increases moreover agricultural policies based on price levels or revenue variation offset some of the impacts of market variation on farm income our results differ from other recent results and temper concerns that increasing climate instability necessarily translates to greater uncertainty about agricultural commodity uses including as food and biofuels in the near future

pool strategy of a price maker wind power producer we consider the problem of a wind power producer trading energy in short term electricity markets the producer is a price taker in the day ahead market but a price maker in the balancing market and aims at optimizing its expected revenues from these market floors the problem is formulated as a mathematical program with equilibrium constraints mpec and cast as a mixed integer linear program milp which can be solved employing off the shelf optimization software the optimal bid is shown to deliver significantly improved performance compared to traditional bids such as the conditional mean or median forecast of wind power distribution finally sensitivity analyses are carried out to assess the impact on the offering strategy of the producer s penetration in the market of the correlation between wind power production and residual system deviation and of the shape of the forecast distribution of wind power production

simple but sound methods for estimating the value of changes in biodiversity for biological pest control in agriculture abstract recent meta analyses indicate that an increase in the number of natural enemy species raises the overall effectiveness of biological control of insect pests in agricultural settings although economic valuations of biological pest control in agriculture show an impressive cost savings from this ecosystem service no direct estimate of the value of biodiversity for biological control has been attempted we apply a basic microeconomic model for estimating the value of changes in the richness of arthropod natural enemies or in functional diversity for biological pest control for two sample crops using experimental results reported in the ecological literature market based outcomes were driven by changes in crop yields associated with experimental reductions in natural enemy species richness and modified by supply shifts and price elasticities we show how our simple model differs from common approaches used in the ecological literature and explain why this alternative model more accurately estimates societal well being for consumers and producers participating in these crop markets we conclude by discussing the additional research and data needed to make economic valuation of ecosystem services in agricultural settings more feasible rigorous and realistic in the future

operational strategies for a portfolio of wind farms and chp plants in a two price balancing market in this paper we explore the portfolio effect of a system consisting of a combined heat and power chp plant and a wind farm the goal is to increase the overall profit of the portfolio by reducing imbalances and consequently their implicit penalty in a two price balancing market for electricity we investigate two different operational strategies which differ in whether the chp plant and the wind farm are operated jointly or independently and we evaluate their economic performance on a real case study based on a chp wind system located in the western part of denmark we present a comprehensive mathematical model for describing the different heat and power production units of the chp plant and suggest different ways of determining its operation in a setup with two trading floors a day ahead market and a balancing market we build a simulation framework that runs in a rolling horizon fashion so that forecasts for heat demand wind power production and market prices are updated at each iteration we conclude that the portfolio strategy is the most profitable due to the two price structure of the balancing market this encourages producers to handle their imbalances outside the market

bidding strategy of virtual power plant for participating in energy and spinning reserve markets part ii numerical analysis this paper is to evaluate the presented model in part i for bidding strategy of virtual power plant vpp with centralized control in a joint market of energy and spinning reserve service two test vpps are introduced and different scenarios are considered for markets prices at first the participation of vpp in only energy market is studied then the spinning reserve market is taken into consideration and the bids of vpp in a joint market of energy and spinning reserve service is studied under different scenarios of markets prices and the results are analyzed in all cases the results show the effectiveness and the quality of the procedure and validate the proposed model

ageing in place exploring elderly people s housing preferences in spain the greater visibility of societal ageing and higher share of individuals with disabilities have created new challenges for housing and urban policies housing needs can influence individual choice of living environment and the willingness to undertake housing improvements this is especially relevant in southern european countries where the family is still the main provider of care for the elderly this study makes an empirical analysis of the underlying preferences for housing and perceptions of housing suitability in the event of dependency in old age drawing upon a new representative database of the spanish population it explores whether preferences are stable for different age groups and different levels of individual affluence calculated in terms of income and housing assets the study found preferences for ageing in place which became stronger as individuals grew older the effect of affluence or the wealth effect was considerable acting independently and exhibiting higher health needs

influential publications in ecological economics revisited we revisit the analysis of costanza et al 2004 ecological economics of influential publications in ecological economics to discover what has changed a decade on we examine which sources have been influential on the field of ecological economics in the past decade which articles in the journal ecological economics have had the most influence on the field and on the rest of science and on which areas of science the journal is having the most influence we find that the field has matured over this period with articles published in the journal having a greater influence than before an increase in citation links to environmental studies journals a reduction in citation links to mainstream economics journals and possibly a shift in themes to a more applied and empirical direction