complex systems and valuation abstract ecological and economic systems are undeniably complex whereas a goal of delineating ecosystem services is to make readily apparent some of the important ways in which ecosystems underpin human welfare insights are also gained by appreciating the nonlinear dynamic properties of ecosystems in this paper we review some of the relevant characteristics of complex systems ecosystems and economic systems share many properties but valuation has typically been driven by short term human preferences here we argue that as the force of humanity increases on the planet ecosystem service valuation will need to switch from choosing among resources to valuing the avoidance of catastrophic ecosystem change

effects of demand side management on chinese household electricity consumption empirical findings from chinese household survey abstract china s residential electricity demand has grown rapidly over the last three decades and given the expected continued growth demand side management dsm can play an important role in reducing electricity demand by using micro level data collected from 1450 households in 27 provinces in the first ever china residential energy consumption survey in 2012 this study estimates the effects of three dsm measures empirically tiered household electricity pricing china energy label program and information feedback mechanisms we find these measures have contributed to moderating residential electricity demand growth but additional policy reform and tools are needed to increase their effectiveness and impact residential electricity demand is found to be price and income inelastic and tiered pricing alone may not be as effective in electricity conservation the statistically significant relationship between china energy label efficient refrigerators but not televisions and lowered residential electricity consumption reflect mixed program effectiveness lastly of the information feedback currently available through electricity bills payment frequency and meters only meter reader is estimated to be statistically significant important policy implications and recommendations for improving each of these three dsm measures to expand their impact on reducing residential electricity consumption are identified

the demand for residential electricity new evidence on time varying elasticities this study employs a generalized functional form to examine demand for residential electiricity the appropriatenes of the conventional double log and linear forms are tested time varying elasicities are estimated major findings are summarized as follows 1 the double log and linear forms can be rejected at the 0 05 and 0 01 levels respectively 2 long run own price elasticities declined in absolute value consistently from 2 13 to 1 19 during the period 1950 87 3 long run income elasticities also decreased from 1 29 to 0 97 during the same period and 4 long run corss price elasticities with respect to the price of natural gas dropped form 0 40 to 0 29 these results may be heplful to decision makers in determining the change in total revenues owning to the change in prices pricing strategies the effectiveness of energy conservation programmes the effect of rising real income on the demand for residential electricity and future demand

determinants of household electricity demand a two stage probit approach considerable interest on the part of policy makers in both the public and private sectors has spawned numerous studies of the determinants of residential electricity demand as a result of increased attention given to the possibility of adjusting household electricity consumption patterns through price manipulation as in the various peak load pricing experiments particular emphasis has been placed on obtaining an accurate estimate of the price elasticity of demand unfortunately ols applied to the conventional linear or log linear demand specification is biased and inconsistent when the sample includes households that face declining block rate schedules the inconsistency results from the fact that in the presence of declining block rates observed marginal price is a stochastic regressor that is negatively correlated with the regression error term some researchers have suggested that consistent ols estimation can be achieved by merely respecifying the demand equation to include particular combinations of marginal price average price rate of decline of the price schedule and real income corrected for intra marginal price differences 1 7 8 others realizing the futility of such an approach have developed and applied instrumental variable iv techniques 4 6 11 these iv methods however all involve an artificial linearization of the rate schedule which produces spurious negative correlation between the price variable and the random error term as a result such iv methods tend to overcompensate for actual correlation consequently the iv estimated coefficients of the various demand determinants will exhibit biases opposite in sign to those of their ols counterparts for example in the presence of declining block rates ols tends to overestimate the price elasticity of demand in absolute value while iv methods produce elasticity estimates that are downward biased a two stage probit tsp method developed by terza and welch 10 is not subject to the bias that plagues iv methods because tsp does not require a linear approximation to the rate schedule instead the discrete and discontinuous nature of household responses to declining block pricing is captured by incorporating an ordinal probit model that is based on a theory of consumer choice in the present paper a linear electricity demand model is estimated using the tsp ols and iv methods to demonstrate the effectiveness of the tsp method

a note on price perception in water demand models a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price

farm growth and survival econometric evidence for individual farms in upper austria this article investigates survival and growth of more than 50 000 upper austrian farm households within a maximum likelihood sample selection framework the results suggest that age schooling and sex of the farm operator size of the farm family and off farm employment status as well as initial farm size significantly influence farm growth and survival the present study provides support for the notion of a disappearing middle in the size distribution the process of polarization is closely related to the off farm employment status of farms correcting for sample attrition bias is important when analyzing the performance of part time farms

transition economies performance and challenges i present data and assess the first twelve years of the transition from plan to market transformations have taken place but the income gap between the transition and advanced economies has widened transition countries further east have performed worse than those further west but policies matter all countries carried out quickly type i reforms such as macroeconomic stabilization price liberalization small scale privatization and breakup of state owned enterprises they differed in type ii reforms such as large scale privatization and development of banking and legal systems countries that developed a functioning legal framework and corporate governance have performed better than others

decision making in electrical appliance use in the home this paper presents the results of a survey as well as an argument from the viewpoint of behavioral economics with the aim of clarifying how consumers make decisions about electrical appliance use in the home a survey of consumers showed that most have little awareness of the energy efficiency of appliances the price of the services produced by electrical appliances or electricity rates these findings indicate that price does not function as a signal in electricity consumption through electrical appliance use rather we found that consumer decision making in electricity consumption is dependent on the characteristics of the particular electrical appliances they use additionally we argue that the payment system for home electricity consumption plays an important role in decision making causing biases due to aspects of human psychology discussed here in terms of satisficing and heuristics payment decoupling and budgeting we conclude that decision making about electrical appliance use and electricity consumption in the home is not always rational and is affected both by the particular characteristics of appliances and the payment system for electricity consumption along with human psychology

valuing nature from environmental impacts to natural capital abstract economic valuation of natural and environmental assets is now a well established practice economic analysis provides several methods for discovering the impact on social welfare associated with changes in the ability of these assets to provide different goods and services in general terms these valuation exercises have been performed in the framework of environmental impact assessment or more generally cost benefit analysis there is however an increasing demand nowadays to go beyond this framework and to value natural capital natural resource stocks land and ecosystems as such there are two main reasons for this new demand on the one hand sustainability requires that proper account should be taken of capital depreciation and therefore there is a need to value natural capital changes this valuation process nevertheless only makes sense when some kind of substitution between natural and other forms of capital is allowed on the other hand there is also an increasing tendency to demand that the stock of natural capital present in a given territory be valued either to discover one of the main components of social wealth or to help adequately plan changes in land use yet whereas conventional valuation methods are probably adequate to fulfill the first task this is less true in the case of the second while even more difficulties arise in connection with the third one even if at first sight the process appears conceptually identical these tasks are of a different order of magnitude as the experience of both the world bank and the statistics division of the united nations in this respect clearly shows

electricity demand in multi family renter occupied residences this paper focuses on multi family renter occupied housing where the landlord provides major appliances a large residential sector that has not received widespread attention in the literature experimental data are used from a test where one group of households was billed directly for the electricity they consumed while a control group had unlimited electric service included as part of the monthly rent the empirical analysis yields short run demand estimates that satisfy to a remarkable extent the ceteris paribus assumptions of demand analysis this is the case for two reasons 1 the households did not individually execute the appliance choice decision at various unknown times in the past and 2 the stock of appliances upon which the derived short run demand is conditional is identical for all households in the sample a second important feature is emphasis on functional form examined in some detail is the question of the appropriate functional form for residential electricity demand finally empirical results of the analysis are used to investigate the cost effectiveness and welfare effects of installing submeters in existing multi family residences

winners and losers in transition returns to education experience and gender in slovenia the authors identify winners and losers in slovenia s economic transition by tracing changes in returns to education experience and gender and changes in wage inequality from 1987 to 1991 they find the following relative wages and employment rose for the most educated and fell for the least educated in all industries relative wages and employment rose with years of work experience until pensionable age at pensionable age relative wages increased very rapidly and relative employment was greatly reduced using pension policies to encourage early retirement drastically reduced the supply of very experienced workers either the policy caused firms to bid up wages for workers of pensionable age to keep them from retiring or it caused a selection process in which only the highest paid workers remained in the workforce regardless the pension policy has proved to be costly and early retirements did not make room for the youngest workers but for those just under pensionable age women gained relative to men in both wages and employment primarily because they occupy education and industry groups less adversely affected by the transition not because of economywide reductions in discrimination against women increasing returns to education and experience contributed to wage inequality but the variance in wages also increased for individuals with identical skills big changes in relative wages should signal future reallocation of labor toward more productive higher paying sectors setting minimum wages fixing ranges of pay and indexing wages to inflation did not prevent increases in wage variation from occuring wage minimums did not appear to have an effect presumably because inflation reduced real minimum wages so quickly that most workers were paid above the minimums in slovenia policy changes are reflected in labor market outcomes disabling the tax transfer policy from relatively profitable to relatively unprofitable firms and eliminating worker referendums on wage scales removed mechanisms that tended to compress wage variation greater demand for skilled workers also reflected both the economywide need to cope with uncertainty and such industry specific factors as reduced labor demand especially in less skill intensive industries the results in slovenia contrast sharply with those in eastern germany eastern german workers have had decreasing returns to education and experience but it is not clear how relevant the eastern german experience is to other transitional economies because of western germany s efforts to alleviate problems more similar to the authors findings are the results of flanagan 1993 on the czech republic which show increasing returns to education but decreasing returns to experience in some respects slovenia is atypical because it is richer and more western in orientation than other transitional economies however economies could learn from the experience in slovenia because slovenia also had social ownership full employment coupled with substantial hidden unemployment and an egalitarian wage structure and slovenia has introduced labor market reform and experienced social dislocations similar to those in other transitional european economies

economic and ecological concepts for valuing ecosystem services abstract the purpose of this special issue is to elucidate concepts of value and methods of valuation that will assist in guiding human decisions vis a vis ecosystems the concept of ecosystem service value can be a useful guide when distinguishing and measuring where trade offs between society and the rest of nature are possible and where they can be made to enhance human welfare in a sustainable manner while win win opportunities for human activities within the environment may exist they also appear to be increasingly scarce in a full global ecological economic system this makes valuation all the more essential for guiding future human activity this paper provides some history background and context for many of the issues addressed by the remaining papers in this special issue its purpose is to place both economic and ecological meanings of value and their respective valuation methods in a comparative context highlighting strengths weakness and addressing questions that arise from their integration

estimating demand under block rates electricity and water many empirical studies of the demand for electricity under declining block tariffs have been conducted but few have produced results consistent with traditional demand theory nordin bell j economics 7 719 21 1976 explains this in part by pointing out that most of those studies failed to take into account the income effects caused by intramarginal price differences the authors show here that nordin s suggestion involves the inappropriate use of ordinal level statistics ols they propose a method by which consistent estimates of the demand parameters can be obtained when a household s rule for selecting a block can be estimated 19 references 1 figure

the short run residential demand for electricity the model of short run residential demand for electricity combines price schedule information obtained from the federal energy regulatory commission with household specific data from the 1972 73 consumer expenditure survey to determine the household s level of electricity consumption and relate it to the household s demographic profile and appliance stock the overall short run price elasticity estimate of 0 550 supports existing findings that short run residential electricity demand is price inelastic however the variation in elasticities across end use categories suggests that the overall response is made up of a complex set of responses that vary substantially and significantly across appliances this implies that it may be more efficient to tailor conservation policies to the stock configuration of the population 17 references 6 tables

comparing residential water demand estimates under decreasing and increasing block rates using household data using a new model formulation and data from a sample of colorado utilities we investigated the price specification controversy marginal price versus average revenue when estimating residential water demand the improved statistical fit using average

intertemporal analysis of employment decisions on agricultural holdings in slovenia the article attempts to quantify determinants influencing the dynamics of employment decisions on agricultural holdings in slovenia and to test specific aspects of labor reallocation during the transition period by the application of an agricultural household model through the use of a 1991 2000 longitudinal data set for 22 055 farm households quantitative analysis of intertemporal employment decisions by farm holders is carried out using probit techniques the determinants tested relate to the personal characteristics of farm holders gender age education level and potential off farm income household characteristics size structure characteristics of the agricultural holding economic size labor intensity and local labor market conditions the model results generally confirm existing empirical evidence on asymmetrical and irreversible participation of holders on the labor market despite intensive restructuring of agriculture and profound changes in the nonfarm labor market in the analyzed period labor supply of farm holders remains rigid the mobility of labor supply is lower than expected which can be attributed to the importance of structural problems constraining intersectoral mobility low labor mobility reduces the efficiency of labor allocation on agricultural holdings in slovenia elements of this problem emerge on both supply e g low level of educational and professional attainment of reference persons and demand sides of the labor market e g unfavorable local labor market conditions a marked tendency toward maintaining the same employment status is more distinct in the case of holders employed on farm only

the dynamics of chinese rural households participation in labor markets the work is devoted to the dynamics of labor market participation of chinese rural households based on a theoretical farm household framework the choice between four distinct labor market participation states is empirically analyzed using household data over the period 1995 2002 from the province zhejiang we apply a discrete time hazard approach to analyze households labor market participation histories in particular we investigate the movements between autarky and participation in general and more specifically the shifts between part time and full time farming estimation results suggest significant duration dependence more precisely a decreasing risk of moving from one state to another with an increasing time a household occupies one of these states further the likelihoods of starting any participation in labor markets and to start part time farming are considerably higher than to end participation or to return to full time farming in addition we find that labor market participation decisions are significantly related to several household and farm characteristics

the value of free water analyzing south africa s free basic water policy this paper analyzes south africa s free basic water policy under which households receive a free water allowance equal to the world health organization s recommended minimum of 6 kiloliters per month i structurally estimate residential water demand evaluate the welfare eects of free water and provide optimal price schedules derived from a social planner s problem i use a unique dataset of monthly metered billing data for 60 000 households for 2002 2008 from a particularly disadvantaged suburb of pretoria the dataset contains rich price variation across 18 dierent nonlinear tarischedules and includes a policy experiment which removed the free allowance i nd that without government subsidy the mean monthly consumption would decrease from 12 6 to 5 6 kiloliters which is below the clean water consumption recommended by the who however it is possible to reallocate the current subsidy to form an optimal tari without a free allowance which would increase welfare while leaving the water provider s revenue unchanged this optimal tariwould also reduce the number of households consuming below the who recommended level

institutional reform and labor reallocation during transition theory evidence from polish agriculture abstract reallocation of agricultural labor during transition differs widely between regions and countries our analysis shows that agricultural labor reallocation in poland is determined by a the dramatic adjustment of prices and production costs caused by price liberalization and subsidy cuts b regional differences in farm organization and the impact of institutional reforms on these organizations c structural problems constraining intersectoral mobility the latter limit the benefits from the institutional reforms long term efficiency gains and sustainable rural development are conditional upon reducing such structural constraints and improving the functioning of the labor market