paying down the environmental debt we reflect on scenarios of sustain able development constant utility paths in which the stock of pollution is drawn down by investments in environmental cleanup we also report on con stant utility as interest on the vector of capital stocks in our economy jel 02 the costs of cleaning up the environment involve multiyear programs for many sites and or problems and sums in the billions of dollars we have superfund activities in the united states in mind but obviously the site cleanup problems facing the people of eastern europe are also very large scale cleanup expenditures resemble programs of investment in infrastructure rather than once over disbursements for troubleshoot

nonparametric estimation of sample selection models sample selection models provide an important way of accounting for economic decisions that combine discrete and continuous choices and of correcting for nonrandom sampling nonparametric estimators for these models are developed in this paper these can be used for estimating shapes and important economic quantities as in standard nonparametnc regression endogeneity of regressors of interest is allowed for series estimators for these models are developed which are useful for imposing additivity restnctions that arise from selection corrections convergence rates and asymptotic normality results are derived an application to returns to schooling among australian young females is given

south east europe regional energy market challenges and opportunities for romania abstract the paper takes as its starting point the athens memorandum signed by countries of south east europe whereby a regional energy market in power and gas will be developed the aim under the athens memorandum is that the south east europe regional energy market seerem will be liberalized in a phased manner from 2005 and ultimately that this will form part of the eu s internal energy market the subject of the paper is the extent to which romania one of the biggest countries in south east europe and traditionally a net energy exporter to the region complies with requirements under the athens memorandum and outstanding challenges related to successful serem accession the paper argues that much progress has been made in energy sector reform in romania power prices have increased payments discipline in the power sector has improved independent regulators have been established for power and gas sectors and power and gas utilities have been restructured nevertheless a number of challenges remain if romania is to fully benefit from participation in the seerem further power price increases will be required in the medium term whilst payments discipline remains poor by industry best practice standards in the gas sector retail prices do not reflect border prices and payments discipline remains a problem the paper argues that gas price reform would likely have adverse affordability impacts and proposes means to mitigate these through rationalization of existing social safety nets for gas and heat on investment requirements the paper notes that these are significant in power generation and proposes a contract framework that would support mobilization of finance

inventory stability and resource allocation under uncertainty in a command economy this paper focuses on a theoretical issue involved in modeling the functioning of a centrally planned economy results derived in a model of inventory behavior indicate that the uncertain consequences of economic decisions and their cumulative impact on the functioning of the economy need to be explicitly recognized in order to study plan implementation when this is done the need for institutions or procedures with homeostatic properties i e negative feedback mechanisms is revealed without such mechanisms orders consistent with a feasible plan may be unable to insure implementation of that plan even when all economic agents are perfectly motivated three types of feedback mechanisms resolving this difficulty are formulated and discussed with respect to inventory behavior in a centrally planned economy

constant consumption and the economic depreciation of natural capital the nonautonomous case we investigate economic depreciation of natural capital for cases of nonstationary output prices technology and interest rates for the former two cases exogenous movements in prices and technology constant consumption emerges under a strategy of investing to cover off economic depreciation the interest rate case requires a modified sinking fund strategy

linking economic and ecological models for a marine ecosystem increasingly economists and ecologists have begun to recognize the value to public policy of combining information and results from each discipline into multidisciplinary studies here we present a methodological approach that links economic and ecological analyses we develop an economic ecological model by merging an input output model of a coastal economy with a model of a marine food web we describe distinct linear system sub models of the economy and the ecosystem and we develop a method for linking the two our method extends the work of earlier researchers by incorporating an ecosystem matrix into resource multipliers and by showing how these multipliers may be calculated we present a numerical example for the new england region using coastal economic and marine ecological data from the region for a restricted set of industry sectors and food web trophic levels we calculate resource multipliers for the example and we simulate the economic impacts of changes in primary production in the ecosystem on final demands for fishery products the results illustrate the effects of incorporating the impacts of habitat destruction and ecosystem structure on resource multipliers our approach can be extended to incorporate the full range of sectors in the economy and trophic levels in a linked ecosystem 2003 elsevier b v all rights reserved

can personal gasoline permit trading be effective an investigation into permit demand this study proposes a personal gasoline permit trading scheme to limit the total gasoline consumption thus reducing its environmental impact we studied the effectiveness of this scheme by analyzing the permit demand of a gasoline driven vehicle in transportation sector a general utility optimization model is formulated and a cobb douglas utility function is further assumed to analyze the response of permit demand to its price changes with the slutsky decomposition of price effects the results when defined in economic terms indicate that the permit demand of consumers in higher income groups are negatively related to permit price permit demand are also negatively related to permit price for consumers in medium income groups but with positive income effect and the direct relationship between permit demand of lower income groups and the price is defined as a giffen good effect that is for those low income groups when the permit price rises their demand for permits would also increase then us and singapore household expenditure data are used to show comparable results of a pilot personal gasoline permit trading scheme further some regulations on critical parameters such as permit allocation and permit prices in the policy design are proposed to make the scheme feasible in different income groups based on these results implications limitation and suggestions for future study are discussed

deforestation and development in a small open economy abstract our economy faces world prices and starts with a large endowment of land in forest and a small endowment of land in agriculture clearing of forested land yields marketable timber and a unit of land for agriculture early the high price of agricultural land drives the clearing process later the profit from marketing timber from the cleared land drives the process dates of phase transitions are endogenous we also set out a submodel of perpetual cyclic clearing and reforesting and show that it when cyclical harvesting regrowing is optimal the extent of clearing can be relatively large

on the intergenerational allocation of natural resources it is known hartwick and others that under standard assumptions a society that invests in reproducible capital the competitive rents on its current extraction of exhaustible resources will enjoy a consumption stream constant in time it is shown here that this result can be interpreted as saying that an appropriately defined stock of capital including the initial endowment of resources is being maintained intact and that consumption can be interpreted as the interest on that patrimony this seems like a useful rule of thumb for policy

pricing urban congestion a structural random utility model with traffic anticipation abstract we design and estimate a game theoretic congestion pricing mechanism in which the regulator aims at reducing urban traffic congestion by price discriminating travelers according to their value of time vot travelers preferences depend on their observable characteristics on the endogenous amount of congestion anticipated on their marginal utility mu of income and on some unobserved factors using a french household survey we estimate the demand models to simulate different pricing mechanisms we find that unobserved determinants of transportation demand are significant and are used to measure the anticipated time spent in traffic and the comfort of traveling diverging from these expectations is felt as more discomfort than if no expectations were formed a priori however some of this discomfort is derived from travelers marginal utility of income the lost time in traffic is clearly unpleasant because of its opportunity cost when the regulator and the transportation provider share common objectives we show that a great welfare improvement can be achieved when implementing a homogenous pricing that accurately accounts for travelers vot

a dynamic analysis of the market for wide bodied commercial aircraft this paper uses an empirical dynamic oligopoly model of the commercial aircraft industry to analyse industry pricing industry performance and optimal industry policy a novel feature of the model with respect to the previous literature is that entry exit prices and quantities are endogenously determined in markov perfect equilibrium mpe we find that many unusual aspects of the aircraft data such as high concentration and persistent pricing below static marginal cost are explained by this model we also find that the unconstrained mpe is quite efficient from a social perspective providing only 10 less welfare on average than a social planner would obtain finally we provide simulation evidence that an anti trust policy in the form of a concentration restriction would be welfare reducing

adjusting green nnp to measure sustainability weitzman provides a foundation for nnp as the stationary equivalent of a wealth maximizing path when there is a constant interest rate and no exogenous technological progress here the implications of weitzman s foundation are explored in a case encountered in resource models i e the case of non constant interest rates in a setting that allows for exogenous technological progress an expression for nnp is obtained that adjusts green nnp for anticipated capital gains and interest rate effects to produce a measure that indicates sustainability this result is important when measuring the relative sustainability of resource rich and resource poor countries i introduction how should net national product nnp be adjusted for the depletion of natural and environmental resources a prerequisite for examining this problem is to decide on an underlying notion of income at the personal level hicks 1946 defines income as the consumption that if kept constant would yield the same present value as a person s actual future receipts since market prices are not influenced by any single person this notion of income equals a person s maximal sustainable consumption at the national level national income can likewise be defined as the consumption that if kept constant would yield the same present value as the actual future consumption path unless the nation is a small open economy faced with given international prices this notion of national income will exceed

does patenting help high tech start ups abstract using data on all high and medium tech start ups in the uk in 2000 this paper assesses the effect associated with a firm s decision to patent on a firm s subsequent growth between 2001 and 2005 we propose a new approach to addressing well known issues challenging identification of any patent effect firm heterogeneity simultaneity between firm performance and patenting and sample selection our findings suggest that patentees have higher asset growth than non patentees of between 8 and 27 per annum 2011 elsevier b v all rights reserved

regulating district heating in romania legislative challenges and energy efficiency barriers abstract many states in eastern and central europe ece possess extensive district heating dh networks that were constructed during the days of communist rule in order to provide a universally accessible energy service that supported soviet development policies but the post communist transition was marked by the exacerbation of the sector s numerous technical economic regulatory and environmental problems accompanied by its abandonment in favour of alternative methods of domestic heating recent efforts to increase the use of dh in ece as a result of environmental and energy security concerns have taken place in an absence of critical context sensitive research the purpose of this paper is to explore the legal aspects of post communist dh reforms in romania with the aim of identifying some of the governance challenges faced by state authorities in managing the sector in broader terms we seek to explore the extent to which the romanian legislative framework is in a position to promote energy efficiency in dh this has been achieved via an analysis of formal policy documents government decrees strategic documents and laws pertaining to this sector as published and subsequently amended in the official gazette the conclusions of the paper identify the key regulatory issues in the sector especially with respect to the tariff setting process and the division of competences among different organisations in it while suggesting a set of policy steps and general restructuring approaches that could help overcome the current situation

liberalisation of the russian power sector abstract the paper discusses the russian power sector reform plan approved by the government in july 2001 which outlines the framework for competition and changes in ownership structure the paper focuses on the following issues related to the plan price reform restructuring of regional energos and large generating companies restructuring of transmission and system operation the mechanism for introducing competition competition for residential consumers and reform sequencing one key message of the paper is that price and regulatory reform is central to success of market liberalisation a second key message is that the restructuring of energos should not create companies with market power ideally local generation and distribution companies would be owned separately with multiple generators in each region at a minimum commonly owned companies should keep separate accounts with regulation of generation a possibility where there is market power regarding transmission and dispatch common ownership would not be a problem given that transmission and generation are separately owned on competition a fully fledged pool may not be appropriate in the case of russia with the alternative of a market based on bilateral contracts with a balancing pool functioning better in a context of non payment and constrained institutional capacity and providing security for investments regarding competition for residential consumers this is not a priority in the short to medium term lastly on sequencing it is better that structural and institutional change takes place before competition begins

endogeneity in semiparametric binary response models this paper develops and implements semiparametric methods for estimating binary response binary choice models with continuous endogenous regressors it extends existing results on semiparametric estimation in single index binary response models to the case of endogenous regressors it develops a control function approach to account for endogeneity in triangular and fully simulataneous binary response models the proposed estimation method is applied to estimate the income effect in a labor market participation problem using a large micro data set from the british fes the semiparametric estimator is found to perform well detecting a significant attenuation bias the proposed estimator is contrasted to the corresponding probit and linear probability specifications jel c14 c25 c35 j22

resource depletion and sustainability in small open economies abstract exogenous price changes affect the amount that a small country exporting natural resource commodities must invest to sustain its consumption level the necessary amount is given by the difference between hotelling rent and the discounted sum of future terms of trade effects capital gains the latter term is found to be large relative to the former in the case of petroleum depletion in indonesia this suggests that resource rich countries will need to invest more than previously expected to sustain their consumption levels if natural resource prices continue their long term historical decline

nonparametric continuous discrete choice models modeling choices that are both discrete and continuous is important in several settings the purpose of this article is to explore formulation and identification of such models when indirect utility functions are specified nonparametrically here we consider general nonseparable disturbances we give identification results for nonseparable sample selection models and use these to analyze identification of discrete continuous choice models

nonparametric bounds on treatment effects assume that each member of a population is characterized by values for the variables ya yb z x here x is a vector describing a person and z is a binary variable indicating which of two treatments this person receives the treatments are labelled a and b the variables ya and yb are scalar measures of the outcomes of the two treatments for example a cancer patient might be treated by a drug therapy or b surgery the relevant outcome y might be life span following treatment an unemployed worker might be given a vocational training or b job search assistance here the relevant outcome might be labor force status following treatment assume that a random sample is drawn and that one observes the realizations of z x and of the outcome under the treatment received thus ya is observed if treatment a is received but is a latent variable if treatment b is received similarly yb is either observed or latent suppose that one wants to learn the difference in expected outcome if all persons with attributes x were assigned to treatment a or b this treatment effect is