it s not now or never implications of investment timing and risk aversion on climate adaptation to extreme events abstract public investment into risk reduction infrastructure plays an important role in facilitating adaptation to climate impacted hazards and natural disasters in this paper we provide an economic framework to incorporate investment timing and insurance market risk preferences when evaluating projects related to reducing climate impacted risks the model is applied to a case study of bushfire risk management we find that optimal timing of the investment may increase the net present value npv of an adaptation project for various levels of risk aversion assuming risk neutrality while the market is risk averse is found to result in an unnecessary delay of the investment into risk reduction projects the optimal waiting time is shorter when the insurance market is more risk averse or when a more serious scenario for climatic change is assumed a higher investment cost or a higher discount rate will increase the optimal waiting time we also find that a stochastic discount rate results in higher npvs of the project than a discount rate that is assumed fixed at the long run average level

a cook s tour towards a framework for measuring the social impact of social purpose organisations for over 50 years operational researchers have advocated that operational research or could be considered as a useful set of ideas and methods for the benefit of society however this aspiration while still chiming today has yet to realise its full potential this paper focuses on organisations whose remit is to alleviate social problems and therefore have a social purpose they are under considerable pressure to demonstrate the impact of the work they do however showing the value of these organisations is not easy the paper contributes to this research gap by developing a framework for measuring the impact of social purpose organisations this is accomplished by bringing together current research on sen s capability approach and configurational theory and arguing for an integrative view to show the value of social purpose organisations

a political economic analysis of congressional voting patterns on nafta this paper delves into the question of the determinants of congressional voting on nafta it uses a logit model to examine both house and senate votes and is able to use district specific estimates in the former it finds only very limited support for the thesis that narrowly defined employment gainers and losers were important determinants of congressional voting patterns though some substantial support that districts that were highly agricultural or already possessed a substantial hispanic population and skilled labor force and had the most to gain from the general effects of nafta lead to a positive effect on the probability that a member of the house would vote affirmatively contributions from labor unions lowered the likelihood of affirmative votes political partisanship and ideological positions apparently had little effect on the votes a representative s political capital had a marginally significant effect on the probability on an affirmative vote but it performed positively in the senate and negatively in the house

the kyoto protocol a review and perspectives international concern about climate change has led to the kyoto protocol negotiated in 1997 which contains legally binding emission targets for industrialized countries to be achieved during the commitment period 2008 2012 while proponents of the protocol celebrate it as a breakthrough in international climate policy opponents criticize that its approach namely setting targets and timetables for emission reductions is seriously flawed this paper provides a critical assessment of the protocols potential performance and discusses amendments to foster its effectiveness and efficiency it concludes that even without any effective emission reductions in the initial commitment period the ratification of kyoto is important for the further policy process of climate protection the kyoto protocol has established a flexible broad based international mechanism that provides a valuable starting point for shaping efficient climate policies in the future

rogoff s conservative central banker restored we show that delegation of monetary policy to a weight conservative central banker can be desirable although the government can also use an inflation contract an employment target an inflation target or any combination of these to control the central banker the key feature of our model is a stochastic inflation bias arising when wage setters receive some information about a supply shock prior to signing nominal wage contracts weight conservatism is found to be desirable if fully state contingent delegation is not possible and the stochastic inflation bias cannot be eliminated by optimal choice of the delegation parameters

conservative central banks and nominal growth exchange rate and inflation targets a framework is developed in which inflation biases with different target variables are compared a nominal growth target measured in consumer prices may yield less stabilization bias than a nominal income growth target exchange rate and inflation targets result in less stabilization bias than an income growth target the more important the terms of trade stabilization persistence in output causes excessive stabilization of productivity shocks and of shocks to the terms of trade under discretion an inflation weight conservative central bank is more likely under an inflation target than under an exchange rate target and less likely under a nominal income growth target

reconciling sustainability and discounting in cost benefit analysis a methodological proposal abstract the incorporation of the intergenerational equity objective has rendered the traditional cost benefit analysis cba approach obsolete for the evaluation of projects presenting an important number of environmental externalities and for those whose impacts extend throughout a long period of time based on the assumption that applying a discount rate rewards current consumption and therefore that it is only possible to introduce a certain intergenerational equity in a cost benefit analysis in this work we propose an approach to discounting based on a different rationale for tangible and intangible effects we designed two indicators of environmental profitability a the intergenerational transfer amount ita which quantifies in monetary units what the current generation is willing to pass on future generations when an environmental restoration project is carried out and b the critical environmental rate cer measures the implicit environmental profitability these concepts were tested through an empirical case study pertaining to the assessment of an erosion control project in the southeast of spain the results yield traditional profitability indicators that are higher and probably closer to the real values set by the contemporary society the information provided by the environmental profitability indicators proposed renders more transparency to the quantification of the levels of intergenerational equity applied thereby facilitating the difficult reconciliation of the cba technique with the objective of sustainability

i struggled with this money business respondents perspectives on contingent valuation abstract in the long running debates about the validity and legitimacy of contingent valuation cv very little research has engaged directly with respondents during or after the survey to explore what individuals willingness to pay wtp figure meant this paper presents the results of qualitative research with respondents to a cv survey carried out as part of the appraisal of a specific nature conservation policy in the uk the results show that respondents questioned the validity of their wtp figures through discussion of the difficulties they experienced in framing a meaningful reply significant difficulties included problems in contextualising what the scheme was and how much it might be worth in both monetary and non monetary terms an inability to work out a value for one scheme in isolation from others in other parts of the uk and feelings that values for nature were not commensurable with monetary valuation turning to the legitimacy of cv participants in the research challenged claims that cv is a democratic process for ensuring that public values are incorporated in policy decisions recognizing that hard economic choices have to be made in order to achieve nature conservation goals participants argued for a decision making institution where local people could contribute to environmental policy decisions through dialogue with scientists and policy makers in the final part of the paper this project is compared with three studies that have also used qualitative approaches with respondents during and or after a cv survey the paper concludes that more context specific qualitative research with respondents is needed to explore further the conclusion that cv may not be a good methodology for capturing complex cultural values for nature and landscape

optimal inflation targets conservative central banks and linear inflation contracts comment inflation targeting regimes like those of new zealand canada the united kingdom and sweden are interpreted as having explicit inflation targets and implicit employment targets without employment persistence an inflation target conservative central bank eliminates the inflation bias mimics an optimal inflation contract and dominates a rogoff weight conservative central bank with employment persistence a state contingent inflation bias and a stabilization bias also arise a constant inflation target and a constant inflation contract are still equivalent a state contingent inflation target combined with a weight conservative central bank can achieve the equilibrium corresponding to an optimal rule under commitment copyright 1997 by american economic association

measuring the existence value of wildlife what do cvm estimates really show two research programs are brought together to contribute to the growing body of work on alternatives to standard welfare based approaches to environmental valuation and policy the first is the theoretical literature undermining the new welfare

exchange rate volatility international trade and resource allocation a perspective on recent research abstract recent research on the effects of exchange rate volatility is discussed and directions for future research are explored the need to pay more attention to the effects of diversification and firms characteristic is emphasized it is suggested that while international risk has risen substantially since floating the differential between international and domestic risk may not this could help explain the failure of international trade to fall drastically and suggests that exchange rate volatility has been more a reflection than an independent cause of underlying instability

ecological public functions and fiscal equalisation at the local level in germany abstract the concept of sustainability requires the acknowledgement and appropriate financing of ecological economic and social public functions at all levels of government whereas the significance of socio economic functions has a comparably long tradition in federal systems the respective consideration of ecological functions is still waiting to be fully realised the aim of this article is to analyse the roles fiscal federalism and fiscal instruments can play in addressing ecological public functions assigned to decentralised jurisdictions in federal systems for this purpose an investigation of intergovernmental fiscal relations and their significance for the local level is carried out by way of example for the federal republic of germany based on a status quo analysis of the various german fiscal equalisation laws at the local level the article presents options for systematically integrating neglected ecological functions and indicators into the existing legal framework the empirical analysis shows that end of the pipe and infrastructure related ecological functions are already strongly integrated by way of conditional grants however precautionary functions such as nature and resource conservation issues are still largely absent therefore a comprehensive consideration of ecological public functions in germany calls for the integration of nature conservation issues and respective indicators into the system of intergovernmental fiscal relations

prices versus quantities comparing economic efficiency of feed in tariff and renewable portfolio standard in promoting renewable electricity generation abstract in order to promote renewable electricity generation several countries have been adopting a feed in tariff fit or a renewable portfolio standard rps of these two renewable energy policies investigating which one has better performance is a subject of debate this study comparatively analyzes the economic efficiency of fit and rps in the south korean renewable energy market fit was implemented from 2002 to 2011 while rps has been in force since 2012 hence a comparative analysis of the two policies is ideal the benefit cost ratio and net present value were measured from two different perspectives the government and energy producers the results showed that rps was more efficient for photovoltaic energy from the government s perspective whereas fit for non photovoltaic energy such as wind power bio energy and fuel cells however from the energy producers perspective fit was more efficient for photovoltaic energy while rps was more efficient for non photovoltaic energy

energy projects in iceland advancing the case for the use of economic valuation techniques to evaluate environmental impacts decision making in iceland has occurred without reference to economic valuations of the environmental impacts of energy projects environmental impact assessments a legal requirement for nearly all energy projects in iceland since 1994 have played an important role in identifying the environmental impacts of energy projects and proposing mitigation measures however a purely qualitative description of environmental impacts is insufficient to ensure that they are accounted for equivalently with all of the other costs and benefits of a proposed project instead as monetary information concerning the welfare gains or losses of proposed projects is not currently required to be provided to the licensing body orkustofnun there is the potential for sub optimal decision making to occur as this paper sets out a broad variety of non market valuation techniques already exist and could be applied to estimate the value of environmental benefits sacrificed to accommodate such developments these methods and their outcomes could be incorporated within mandatory cost benefit assessments for proposed icelandic energy projects communicating an estimate of the full welfare implications of approvals to decision makers and the public alike and fulfilling an oecd demand for the country to commence such processes

integrated ecological economic and social impact assessment of alternative flood protection measures in the netherlands abstract the main objective of this paper is to combine and integrate environmental economic and social impact assessment procedures in order to support decision making in the context of flood control policy in the netherlands the hydraulic hydrological ecological economic and social effects of alternative flood control policies such as land use change and floodplain restoration are evaluated using a combination of advanced quantitative modelling techniques and qualitative expert judgement the results from the ecological economic and social impact assessment are evaluated in an integrated way through cost benefit analysis cba and multi criteria analysis mca as expected these methods produce different outcomes although traditional flood control policy building higher and stronger dikes is a cost effective option investment in alternative flood control policy land use changes and floodplain restoration can be justified on the basis of both cba and mca when including the additional ecological and socio economic benefits in the long run the outcome of the mca appears to be especially sensitive to the inclusion of the qualitative scores for the expected social impacts of land use change and floodplain restoration an important research question remains how to assess integrate and trade off 1 significantly different types of impacts in a methodologically sound way in both cost benefit and multi criteria analysis and 2 significantly different types and quality of available knowledge and information about these impacts

protectionist pressures and aggregate economic conditions comment on takacs this paper explores the influence of u s macroeconomic conditions and the international trade position on protectionist pressures as measured by escape clause cases brought before the international trade commission several possible difficulties with takacs pioneering empirical study of this topic are considered it is argued that while further support is found for her principal conclusion that the state of the domestic economy is a significant determinant of such protectionist pressures the quantitative strength of such aggregate factors is less than was suggested by takacs original study

state contingent inflation contracts and unemployment persistence this paper shows that if unemployment or some other real variable follows a dynamic autoregressive process the government can still achieve its precommitment outcome in monetary policy by offering the central banker a linear inflation contract where the penalty for incremental inflation depends positively on lagged unemployment this note therefore offers an extension of recent results of c walsh 1995 to the case of persistence in real economic variables such as output or unemployment copyright 1997 by ohio state university press

the political economy of nontariff barriers a cross national analysis nontariff barriers to trade are most pervasive when deteriorating macroeconomic conditions give rise to demands for protection by pressure groups when countries are sufficiently large to give policymakers incentives to impose protection and when domestic institutions enhance the ability of public officials to act on these incentives statistical results based on a sample of advanced industrial countries during the 1980s support the argument that the incidence of nontariff barriers tends to be greatest when the preferences of pressure groups and policymakers converge more attention should be devoted to the interaction between societal and statist factors in cross national studies of trade policy

valuing public goods with the contingent valuation method a critique of kahneman and knetsch the social stakes in the use and abuse of the contingent valuation method cvm are very high recent developments in environmental law have elevated the cvm to the status of a refutable presumption in cases brought under certain statutes it is no longer adequate for economists to sniff at the continued popularity of the cvm in such cases it is instead incumbent on economists to come to some conclusions as to the domain under which the cvm may or may not be correctly applied one should not expect a simple thumbs up or thumbs down assessment in this matter such an expectation would be naive with respect to the inherent complexity of the issue not to mention the financial incentives that expert witnesses might have to breed as if controversy in an adversarial legal system in this context the strong admonitions of kahneman and knetsch 3 kk against the casual use of the cvm must be carefully examined they present what they believe to be evidence to support the claim that the cvm suffers from an embedding effect and that any reported willingness to pay wtp is best interpreted as the purchase of moral satisfaction rather than as a measure of the value associated with a particular public good i argue that their evidence is insufficient to test the implied hypotheses that it is incorrectly reported and that it is in large measure fully consistent with received economic theory

toward consilience between biology and economics the contribution of ecological economics abstract during its ten year history ecological economics has made a real difference in the way economists look at the natural world and in the way biologists look at the economy in this survey article we examine the contributions to the journal in terms of e o wilson s concept of consilience that is his argument that the methods and assumptions of any field of study should be consistent with the known and accepted facts in other disciplines in particular we examine the contributions of ecological economics to reconciling the economic theory of the consumer and producer with biophysical reality

the political economy of ec protectionism national protectionism based on article 115 treaty of rome this paper investigates the trade policy of the ec based on art 115 treaty of rome it is shown that politicians and bureaucrats take advantage of the significant discretion the procedure allows political and bureaucratic self interest are the underlying motives for national trade barriers against non member countries based on art 115 the empirical results support this hypothesis

managing risks from climate impacted hazards the value of investment flexibility under uncertainty abstract incomplete knowledge about climate change and the related uncertainty in climate prediction makes adaptation inherently difficult we introduce a real options framework to determine the optimal adaptation to catastrophic risk that takes into account climate change uncertainty the framework can be used to select the optimal adaptation project from a number of alternative projects or to determine the optimal investment sequence of the considered projects in applying the model to the management of bushfire risk at a local government area we find that the framework can significantly increase the value of adaptation investment above the current net present value and also improve upon deterministic dynamic models we also find that it is important to consider sequential investment to preserve investment flexibility under the uncertainty of climate change when decision makers can afford multiple investment projects the loss associated with the use of a simple net present value rule can be substantial and it is important to use a deterministic dynamic model or a real options model

the use of public participation and economic appraisal for public involvement in large scale hydropower projects case study of the nam theun 2 hydropower project abstract gaining public acceptance is one of the main issues with large scale low carbon projects such as hydropower development it has been recommended by the world commission on dams that to gain public acceptance public involvement is necessary in the decision making process wcd 2000 as financially significant actors in the planning and implementation of large scale hydropower projects in developing country contexts the paper examines the ways in which public involvement may be influenced by international financial institutions using the case study of the nam theun 2 hydropower project in laos the paper analyses how public involvement facilitated by the asian development bank had a bearing on procedural and distributional justice the paper analyses the extent of public participation and the assessment of full social and environmental costs of the project in the cost benefit analysis conducted during the project appraisal stage it is argued that while efforts were made to involve the public there were several factors that influenced procedural and distributional justice the late contribution of the asian development bank in the project appraisal stage and the issue of non market values and discount rate to calculate the full social and environmental costs

allocating scarce financial resources across regions for environmental management in queensland australia abstract regional governance agencies such as catchment or watershed management committees are playing a significant role in the management of natural resources these agencies often depend on central governance agencies for their revenue in australia this has created a policy dilemma for federal and state governments how should limited funds be allocated to regional groups this question is being encountered by central governance agencies worldwide based on a study from queensland australia this paper shows how multiple criteria analysis mca was used to inform fiscal equalisation of environmental funds worth a 146 6 million across 14 regions fiscal equalisation aims to equalise the ability of each region to address its natural resource management problems the mca approach allows decision makers to weight criteria and define a needs index which forms the basis for allocating funds

the clash of central bankers with labour market insiders and the persistence of inflation and unemployment this paper analyses the implications of monetary policy for the dynamic behaviour of inflation in a natural rate model characterized by endogenous unemployment persistence we present evidence for the main industrial economies that suggests that inflation displays persistence which is of the same order of magnitude as the persistence of deviations of unemployment from its natural rate we provide a theoretical explanation of this fact based on a model of the dynamic interactions between central bankers and labour market insiders the clash in the objectives of central bankers and labour market insiders is what causes both inflation and unemployment to display the same persistence in this model the analysis suggests that inflation persistence could be addressed in a welfare improving way if central banks adopted monetary policy rules that targeted unanticipated changes in unemployment rates instead of deviations of unemployment from its natural rate

valuing ecosystem goods and services a new approach using a surrogate market and the combination of a multiple criteria analysis and a delphi panel to assign weights to the attributes a new approach to valuing ecosystem goods and services egs is described which incorporates components of the economic theory of value the theory of valuation usnot vert similarappraisal a multi model multiple criteria analysis mca of ecosystem attributes and a delphi panel of experts to assign weights to the attributes the total value of ecosystem goods and services in the various tenure categories in the wet tropics world heritage area wtwha in australia was found to be in the range aud 188 to 211 million year 1 or aud 210 to 236 ha 1 year 1 across tenures as at 30 june 2002 application of the weightings assigned by the delphi panelists and assessment of the ecological integrity of the various tenure categories resulted in values being derived for individual ecosystem services in the world heritage area biodiversity and refugia were the two attributes ranked most highly at aud 18 6 to 20 9 million year 1 and aud 16 6 to 18 2 million year 1 respectively

inflation government transfers and optimal central bank independence abstract the problem of monetary policy delegation is formulated as a two stage non cooperative game between the government and the central bank the solution to this policy game determines the optimal combination of central bank conservatism and independence the results show that the optimal institutional design always requires some degree of central bank independence and that there is substitutability between central bank independence and conservatism the results also show that partial central bank independence can be optimal and that there are circumstances under which it is optimal for the government to appoint a liberal central banker

choice modelling approaches a superior alternative for environmental valuation in this paper we examine some popular choice modelling approaches to environmental valuation which can be considered as alternatives to more familiar valuation techniques based on stated preferences such as the contingent valuation method a number of choice modelling methods are consistent with consumer theory and its focus on an attribute based theory of value permits a superior representation of many environmental management contexts however choice modelling surveys can place a severe cognitive burden upon respondents and induce satisficing rather than maximising behavioural patterns in this framework we seek to identify the best available choice modelling alternative and investigate its potential to solve some of the major biases associated with standard contingent valuation we then discuss its use in the light of policy appraisal needs within the eu an application to the demand for rock climbing in scotland is provided as an illustration

german energiewende and the heating market impact and limits of policy the german energiewende envisages achieving a climate neutral building stock in 2050 by means of two major pillars of regulation first residential buildings should consume 80 less primary energy and second the remaining energy demand should be covered primarily with renewables this paper simulates the future german heating market under different policy scenarios in order to evaluate the impact and limits of recent and conceivable policies the investigation is based upon a dual model approach linking a residential heating model to a discrete choice model the major finding is that current regulations are not suitable for the achievement of governmental targets scenario calculations show that additional carbon emission reductions triggered by the current regulatory regime are falling short of expectations in terms of economic efficiency all calculated policy alternatives outperform the regulation currently in place this allows to draw the conclusion that carbon emission reductions can be achieved without a major increase in cost the model results highlight two policy implications first a rising mandatory share of renewables in the heating market is needed for target achievement and can be cost effectively second renewable obligations for heating systems must include the existing building stock to achieve the postulated political targets

what does corporate strong sustainability actually mean in the real market world a response to bjorn and ropke abstract in a recent issue of the journal of cleaner production bjorn and ropke 2018 publish an article titled what does it really mean to be a strongly sustainable company a response to nikolaou and tsalis through which they express their concerns over the methodological framework developed by nikolaou and tsalis 2018 bjorn and ropke point out some weaknesses of this methodology suggesting some possible amendments to improve it specifically they raise doubts over the selection of environmental indicators and the definition of thresholds taking into consideration the points discussed by bjorn and ropke this paper aims to analyze the relevant theoretical background on which our framework was built by clarifying the concepts of corporate strong sustainability it also underlines some misconceptions of bjorn and ropke in relation to our framework and their proposed approach as well as making some suggestions for a possible new framework for corporate strong sustainability business oriented approach which encompasses the united nation un 2030 agenda for sustainable development and the corporate strong sustainability principles

improving environmental decisions a transaction costs story abstract a multidisciplinary team of researchers made efforts to influence the design and implementation of environmental policy in australia a focus of these efforts was the development of the investment framework for environmental resources inffer in addition the team undertook a range of communication activities training user support and participation in committees and enquiries transaction costs were relevant to these efforts in a variety of ways environmental managers perceived inffer to involve relatively high transaction costs a balance was struck between the system having simplicity and low transaction costs and delivering environmental benefits transaction costs were factored into the planning and prioritisation processes developed for example public and private transaction costs are accounted for in the calculation of benefit cost ratios and in the choice of policy mechanisms there are diverse roles that transaction costs play in the processes of developing implementing and influencing environmental policy programmes a key observation is that appropriate strategic investment in transaction costs can improve decisions and increase net benefits from an environmental programme a well designed decision process can involve incurring transaction costs at one stage in order to save transaction costs at a later stage

can redd still become a market ruptured dependencies and market logics for emission reductions in brazil abstract during almost 20 years of political debate on the nature of payments for ecosystem services pes these schemes have been characterized mostly as a non market approach even though attempts to transform them into market instruments has persistently recurred in these debates one notable example is the materialization of reducing emissions from deforestation and forest degradation redd in brazil where a sustainable development discourse dominates national forest governance at the expense of a carbon commodification discourse this research paper adopts a foucauldian approach to plot the epistemological foundations of the market logics that still influence redd institutionalization in brazil to a large extent and thereby reproduce what we define as a ruptured dependence on nature more specifically we recognize ruptured dependence in the three building blocks of market instruments namely singularization monetary valuation and appropriation our analysis shows that redd institutions have retained the singularization and monetary valuation of emission reductions even though the appropriation processes have rejected the possibility of exchange and instead emphasized the national ownership of emission reductions however appropriation remains a highly politicized process that is sensitive to criticism and open to calls for alternative approaches that are closer to ruptured dependence

optimal reputation building in the new keynesian model abstract we study the optimal committed monetary policy when the private sector has imperfect information and has to infer the central banker s ability to commit the optimal policy is designed to influence learning and improve the central banker s reputation of being committed the reputation building implies that when a committed central banker first takes office he should resist the temptation to stimulate output with initially high but declining inflation he should reverse a missed inflation target rather than accommodate it and he should adopt a less accommodative inflation response to a cost push shock than a full commitment solution suggests

problems in valuing the benefits of biodiversity protection this paper considers two problems in valuing the benefits of biodiversity protection these are firstly that preferences for biodiversity protection may be lexicographic rather than utilitarian the more individuals for whom this is true the less is cost benefit analysis validated as a means of decision making for biodiversity protection since lexicographic preferences are incompatible with the kaldor hicks compensation test secondly people may be poorly informed about the meaning of biodiversity complicating the use of contingent valuation as a means of measuring preservation benefits this paper first discusses the meaning of biodiversity and trends in diversity over time we offer some empirical evidence with regard to lexicographic preferences consider the implications of having poorly informed consumers and then report the results of a contingent valuation study of biodiversity protection with varying levels of information we find that willingness to pay for biodiversity protection increases with the level of information provided

the economics of distributed energy generation a literature review the uk electricity system is likely to face dramatic technical and institutional changes in the near future current uk energy policy focuses on the need for a clean affordable and secure energy supply decentralisation of the electricity system is recognised as one means of achieving efficient and renewable energy provision as well as addressing concerns over ageing electricity infrastructure and capacity constraints in this paper we provide a critical literature review of the economics of increased penetration of distributed energy generation we find that there exists a large volume of research considering the financial viability of individual distributed generation technologies and we are necessarily selective in our review of these studies given the wide variety of technologies that the definition of distributed generation encompasses however there are few studies that focus on the pure economics of individual or groups of distributed energy generators and even fewer still based on the economy wide aspects of distributed generation in view of this gap in the literature we provide suggestions for future research which are likely to be necessary in order adequately to inform public policy on distributed generation and its role in the future of uk energy supply

cost benefit analysis and environmental policy the use of cost benefit analysis cba in british environmental policy has gone through several stages early applications of cba tended to ignore environmental impacts altogether leave them for a subsidiary impact analysis or provide only a partial monetization of impacts currently cba is the subject of renewed interest in government departments in the environment agency and among other agencies providing guidance and advice to government while the amount of cba being undertaken has increased its influence on policy making is open to question obstacles remain much cba is expensive and this means that benefits transfer is widely regarded as essential currently however the validity of much benefits transfer is questionable other problems arise from misunderstandings about the nature of economic values and the links to individuals self interest and from concerns that cba results will crowd out flexibility in decision making especially the likely context of multiple political objectives over and above economic efficiency none the less cba has begun to have influence in the setting of environmental taxes and alternative decision rules appear to suffer as many if not more shortcomings as those faced by cba copyright 1998 by oxford university press

evolutionary modelling of the macro economic impacts of catastrophic flood events this paper examines the possible contribution of evolutionary economics to macro economic modelling of flood impacts to provide guidance for future economic risk modelling most macro economic models start from a neoclassical economic perspective and focus on equilibrium outcomes either in a static or dynamic way and describe economic processes at a high level of aggregation as a consequence they typically fail to account for the complexity of social interactions and other behavioural responses of consumers and producers to disasters which may affect the macroeconomic impacts of floods employing evolutionary principles and methods such as agent based modelling may help to address some of the shortcomings of current macro economic models we explore and discuss the implications of applying consumer and producer heterogeneity bounded rationality network effects social and technological learning co evolution and adaptive policy making concepts into existing economic frameworks for the assessment of macro economic impacts of floods authors abstract

incentive contracts and elections for politicians with multi task problems abstract we consider a model with a politician facing a multi task problem while in office the reelection mechanism distorts the allocation of effort in favor of tasks whose outcomes can be measured more precisely than others we show that a combination of elections and incentive contracts can alleviate this inefficiency the incentive contract does not require direct information about the performance of the politician and is self financing across terms

debt contingent inflation contracts and targets abstract this paper analyzes fiscal and monetary policy interaction in a simple policy game with debt and output shocks seigniorage provides revenue for the government but results in an inflation bias we analyze three mechanisms designed to eliminate some or all of the biases in monetary policy an inflation performance contract inflation target both contingent on the stock of debt and a zero inflation rule the performance contract and inflation target result in higher interest rate remove all biases in monetary policy and achieve the pre commitment policy hence they are equivalent the first two solutions also yield a higher expected welfare than a zero inflation policy

does pricing nature reduce monetary support for conservation evidence from donation behavior in an online experiment abstract ecosystem services valuation attempts to determine the monetary value of the benefits provided by the natural world prior research has shown that making monetary value salient fosters self interested behavior in experimental settings vohs mead and goode 2006 reduces the intrinsic value ascribed to pro social activities such as volunteering pfeffer and devoe 2009 and reduces the efficacy of environmentally relevant interventions steinhorst klockner and matthies 2015 these findings raise concern that ecosystem service valuation information might adversely impact individual s pro environmental behaviors this study uses an experimental framework to determine whether ordinary citizens exposure to valuation information such as one might encounter in a news article or fundraising materials might influence an individual s contribution to a natural resource conservation fund the study is implemented with 250 participants from across the united states we find that participants who receive a natural resource description plus valuation treatment donate a statistically significant lower dollar amount of their experimental earnings on average than those who read the narrative alone based upon this evidence we assert that ecosystem service valuation information has the potential to negatively impact financial support for the exact resources the information is designed to promote

investigating efficiency in betting markets evidence from the greek 6 49 lotto abstract in this paper we investigate the existence of profit opportunities in the greek market for the 6 49 lotto under the assumption of random number selection we find evidence suggesting that the market is efficient because number selection is found to deviate from randomness we further investigate the existence of profit opportunities due to number unpopularity the evidence suggests that although unpopular numbers exist they are not sufficiently unpopular so as to generate positive expected payoffs

a political agency theory of central bank independence we propose a theory to explain why and under what circumstances a politician endogenously gives up rent and delegates policy tasks to an independent agency we apply this theory to mon etary policy by extending a stochastic general equilibrium model this model provides a theory of central bank independence that is unrelated to the standard time inconsistency problem which underlies all formalized theories of central bank independence we derive five key predictions of the model and show that they are broadly consistent with the data finally we show that while instrument independence of the central bank is desirable goal independence is not

the textile bill of 1985 the determinants of congressional voting patterns the following tables show the results of the probit analysis for the senate and the house a table including results for different combinations of the independent variables is included in an unpublished appendix available from the authors upon request the results of the probit analysis for the senate are shown in table 1 all the variables except exp had the expected signs however the results indicate that the two other employment variables and party affiliation are the only factors which we can say with confidence influenced a senator s decision to vote for or against this bill the coefficients reported and labeled der of prob measure the derivative of the probability of a yes vote evaluated at the means of the independent variables in question thus for example the coefficient for unemp in the top line of table 1 should be interpreted as indicating that a one percentage point increase in a state s unemployment rate will cause a 5 89 increase in the probability that the senator will vote for the bill the result for dr the party of the senator shows that in general democrats are more apt to vote for protectionist policies than are republicans this is consistant with president reagan s negative stand on the bill and his threat to veto it should it pass the amendment in question passed the senate on 24 october 1985 by a vote of 54 for to 42 against but the bill it was attached to has been postponed indefinitely the house bill which was passed on 10 october 1985 by a vote of 262 for to 159 against was vetoed by reagan on 17 december 1985 the results of the probit analysis for the house of representatives are shown in table 2 state employment data was used for the house as opposed to data for each voting district this was done for three reasons first employment data is usually reported by state or by county since counties are often divided by congressional district boundaries much personal judgement would be necessary to assign employment figures second the most recent county industry employment data is from 1981 while the data used in this analysis is from 1984 third we feel that in general logrolling is prevalent among a state s representatives for this bill the representatives from twenty six states voted as a block and in all but six states one third or less of that state s representatives voted contrary to the majority all of the probabilities are significant at the 05 confidence level representative s voting patterns are influenced by all of the included factors when unionization is added to the equation its coefficient is very small and negative although it is significant at the 05 confidence level one would expect more significance here since there are more degrees of freedom for the house analysis than for that of the senate when the data from the house and senate are pooled the results are similar to those of the house alone the null hypothesis that the data cannot be pooled was tested using a statistic with eight degrees of freedom 9 721 meaning that the null hypothesis is rejected as in the senate the state unemployment rate and the percent employed in textiles are important influences on the representative s vote and democrats in the house are more likely to vote for protectionist bills than republicans however unlike the senate the percent of a representative s campaign contributions that are donated by industry special interest groups has a significant effect on voting patterns although the point estimates for the magnitudes of the influence are very similar in both cases seventy four percent of the house received campaign contributions from these special interest groups while only 54 of the senate received contributions from these same sources this is probably because only one third of the senate was up for reelection during the time period considered while the entire house was in the process of campaigning for reelection exports also play a role in influencing the probability of a yes vote reducing this probability as employment in export industries increases but the magnitude of the coefficient is only 11 of that for textile employment the significance of this variable in the house is probably due to fear of retaliation expressed by both democrats and republicans this variable was not significant in the senate model most likely because the senate version excluded from the 1 import quota growth rate many countries who might have retaliated representatives appear to respond to a wider variety of constituent interests than do senators while senators voting patterns are only significantly influenced by their political affiliation their state s unemployment rate and the importance of textiles to their state the voting behavior of representatives is influenced by these factors as well as the importance of exports to their state and campaign contributions by textile special interest groups these results affirm the validity of the approach used by baldwin and coughlin they differ from baldwin who finds exports are not a significant influence on the house and from coughlin who does not include export employment as an explanitory variable or analyze the differences in voting patterns between the house and the senate

combining rent seeking and public choice theory in the analysis of tariffs versus quotas economists continuing criticisms of protectionism make a valuable contribution to the general interest element of the forces which operate to keep propensities to protect somewhat in check mckenzie rightly warns however that proposals by economists for giving protection in more efficient forms run the danger of increasing the total supply of protection thus we agree that serious consideration should be given to the political economy responses which may be induced before one advocates ways of doing more efficiently what one believes should not be done in the first place it does not follow however that all such policies will have net negative unanticipated consequences in the case of tariffs versus quotas we do not believe that we have yet sufficient knowledge of all of the relevant political economy considerations to predict about the full effects of legislation which allowed trade protection to only take the form of tariffs we are doubtful however that such a measure would increase the total quantity of protection through the channels outlined by mckenzie we believe that the same type of basic public choice analysis of the individual incentives to lobby which suggests that consumer taxpayers will not force the political process to operate so as to maximize aggregate economic efficiency with respect to the level of protection also suggests that the net lobbying for quotas is likely to be higher on average than the net lobbying for tariffs political effectiveness and ability to overcome free riding on the part of tariff revenue seekers is likely to be low at the margin furthermore issues of visibility and institutional structure are likely to lessen the ability of anti protection forces to lobby against quotas placed within a broader framework public choice and rent seeking theory is consistent with the empirical evidence that where quotas are used protection is high

delegating optimal monetary policy inertia abstract in a forward looking business cycle model central banks can achieve the timeless optimal commitment equilibrium even in the absence of a commitment technology if they are delegated with an objective function that is different from the societal one the paper develops a general linear quadratic method to solve for the optimal delegation parameters that generate the optimal amount of inertia in a markov perfect equilibrium and studies the optimal design of some policy regimes that are nested within this framework the squared optimal targeting rule inflation output gap growth and nominal income growth targeting and inflation and output gap contracts

consistency between contingent valuation estimates a comparison of two studies of uk national parks bateman i willis k and garrod g 1994 consistency between contingent valuation estimates a comparison of two studies of uk national parks reg studies 28 457 474 recent years have seen a significant increase in the application of the contingent valuation method to the evaluation of environmental preferences in the uk recent theoretical and methodological developments suggest that this increase is likely to be sustained for the foreseeable future this paper examines the issue of consistency across studies carried out to date in the uk attention is initially focused upon two major studies which allow the comparison of a number of findings analysis is then extended to a large number of smaller studies these comparisons suggest that the results obtained to date are both consistent and logically ordered with reference to the environmental good and the change in provision under consideration across studies bateman i willis k et garrod g 1994 la coherence des estimations contingentes une

the behavior of regulatory activity over the business cycle an empirical test this paper tests a prediction of the interest group theory of regulation which suggests that regulators generally will not force any one group to bear the full adjustment costs associated with variations in the business cycle that is the interest group model predicts that regulatory agencies will redistribute cyclical gains and losses by supplying more producer protection regulation during contractions and more consumer protection regulation during expansions i e regulatory activity which reduces consumer welfare will tend to be countercyclical intensifying when aggregate demand falls and abating as demand increases the empirical results show a countercyclical and statistically significant ceteris paribus relationship between federal trade commission enforcement efforts under the robinson patman act and several alternative measures of general business conditions since the robinson patman act is viewed widely as anti consumer the findings suggest that in cyclical downturns the commission moves to protect producers against losses by bringing more cases which limit the tendency for prices to fall this result may be rationalized under the view that during recessions the federal trade commission is in the business of transferring wealth from consumers either to protect small business or to bolster cartels on the other hand during business expansions the commission reduces its robinson patman case load and such a change in enforcement may serve to mitigate producer gains transferring wealth to consumers at the margin in any case the paper offers empirical support for the interest group model by providing evidence that the business cycle plays an important part in explaining the level and pattern of regulatory activity

inflation forecast contracts we introduce a new type of incentive contract for central bankers inflation forecast contracts which make central bankers remunerations contingent on the precision of their inflation forecasts we show that such contracts enable central bankers to influence inflation expectations more eectively thus facilitating more successful stabilization of current inflation inflation forecast contracts improve the accuracy of inflation forecasts but have adverse consequences for output on balance paying central bankers according to their forecasting performance improves welfare

what does it really mean to be a strongly sustainable company a response to nikolaou and tsalis abstract in a recent issue of this journal nikolaou and tsalis 2018 published a paper titled a framework to evaluate eco and social labels for designing a sustainability consumption label to measure strong sustainability impact of firms products in their paper the authors n t develop a method for identifying strongly sustainable companies as a basis for consumer communication n t test their method on a case study of five chemical companies and conclude that two of these are strongly sustainable essentially because they had obtained a higher number of eco labels than the average across the five companies while we agree with n t on the relevance of applying a strong sustainability perspective in the assessment of companies we are afraid that their method can lead to misguided consumer communication at the root of this concern is that n t 1 use a market average as reference to decide whether a company has a strong or weak sustainability performance and 2 use the number of eco labels as an environmental indicator we lay the foundation of this response by briefly accounting for the academic origin of the weak strong sustainability dichotomy we then present our argument against the method presented by n t this is followed by a proposal for how to improve the method finally we discuss state of the art in strong sustainability assessments of companies taking into account other existing methods that draw on the planetary boundaries concept and life cycle assessment

limits to cba in uk and european environmental policy retrospects and future prospects this paper reviews the contemporary debate and the now long standing role of cba in uk and european environmental policy appraisal epa and looks forward to possible future applications the position taken is that despite its limitations cba still has an important part to play in epa however with the increasingly contested nature of environmental and related public policies and outcomes its role will become less prescriptive and its findings more constrained by social justice and ethical imperatives future cba is more likely to continue to flourish as a component in a wider policy analysis and decision support system whatever decision support system is eventually adopted its value will be judged on how well it aids real policymakers operating iteratively in the non linear real world political economy

antidumping decisions and macroeconomic variables in the usa this paper investigates the macroeconomic factors that explain antidumping decisions in the us international trade commission johansen s cointegration test results show that there is a long run equilibrium relationship between growth of the percentage of affirmative antidumping decisions and trade balance the error correction model shows that there is a causality running from the latter to the former growth of the percentage of affirmative antidumping decisions is revealed to cause slowdown in economic growth partisan characteristics are observed in the commissioners antidumping decisions

accruing benefit or loss from a protected area location matters abstract the spatial distribution of protected area direct benefits and losses were mapped for twenty five villages around kibale national park uganda benefits included park based employment tourism revenue sharing integrated conservation and development projects and resource access agreements losses were caused by park protected animals raiding crops and preying on livestock local perceptions of benefit and loss associated with the park were collected from focus groups and a household survey valuation data were derived from interviews the survey and measurement of crop losses eight villages accrued an annual net benefit as a result of the park while 17 villages accrued a net loss net benefitting villages were located near park based employment and resource access associations involved in beekeeping households within 0 5 km of the park boundary accrued the highest losses while benefits distributed up to 15 km away the ugandan wildlife authority uwa needs to focus benefits closer to the park boundary to support those who lose most from park protected animals and away from areas with park based employment to more evenly distribute benefits around the circumference of the park attitudes toward the park appear to be shaped by loss aversion suggesting uwa and conservation agencies should focus on loss mitigation rather than benefit provision

nobel lecture the economic way of looking at behavior an important step in extending the traditional theory of individual rational choice to analyze social issues beyond those usually considered by economists is to incorporate into the theory a much richer class of attitudes preferences and calculations while this approach to behavior builds on an expanded theory of individual choice it is not mainly concerned with individuals it uses theory at the micro level as a powerful tool to derive implications at the group or macro level the lecture describes the approach and illustrates it with examples drawn from my past and current work