control of accumulating stock pollution by heterogeneous producers abstract this paper presents a framework to determine optimal resource allocation over time for the production of a good by heterogeneous producers who generate a stock externality we analyze the optimal intertemporal and quality specific combination of abatement strategies at the source source abatement given by a change in the intensity intensive margin of production and in the chosen technology extensive margin and or removal of existing pollution stock stock abatement the results show how the specifications of the production and the emission functions affect technology adoption and the design of the optimal intertemporal combination of source and stock abatement strategies moreover the paper shows that regulation at the intensive margin cannot be considered as a substitute for a regulation at the extensive margin the paper employs the so called two stage solution approach for solving the resulting quality distributed intertemporal optimal control problem

explaining irrigation technology choices a microparameter approach water price reforms are increasingly being used to encourage improvements in irrigation efficiency through technology adoption a microparameter approach based on field level data is used to assess the effect of economic variables environmental characteristics and institutional variables on irrigation technology choices the results show that water price is not the most important factor governing irrigation technology adoption physical and agronomic characteristics appear to matter more the results demonstrate the importance of using micro level data to determine the effects of asset heterogeneity and crop type on technology adoption the continued growth of urban water demand acted a measure a b 3616 requiring irrigathe recent awareness of environmental and in tion districts in the state to draft best managestream water values and the virtual halt of wa merit practices for the use of irrigation water ter supply development have put increased de including farm level measures such as irrigamands on scarce water supplies in the western tion systems water price reforms are also inunited states recent legislation has called for creasingly used to encourage improvements in increased in stream water flows to enhance wa irrigation efficiency through technology adopter quality and restore wildlife habitat in a hum tion the federal central valley project imber of states especially california because ag provement act requires the u s bureau of recricultural water use accounts for the majority of lamation to adopt increasing block pricing for water consumption in the west growers are water provided to irrigation districts generally forced to bear the burden of reduced the literature on adoption of modern irrigadiversions necessary to enhance in stream tion technology is well established both empiri

joint management of emission abatement and technological innovation for stock externalities we investigate how emission abatement and technological innovation provide different solutions to reduce pollutant emissions in the case of a stock externality emission abatement leads to a smooth and continuous adjustment of emissions conversely technological innovation has to be interpreted as an option on a less polluted environment and can justify the use of a pollution threshold above which it is optimal to start a research and development programme for a less polluting technology it is shown that technological innovation interferes with the traditional emission abatement approach the optimal abatement level is logically lowered once the less polluting technology is available nevertheless a temporary increase in emissions is optimal during the research and development period the usual pigouvian tax system proves to remain an efficient corrective instrument a numerical application to the greenhouse effect is provided

policy for the adoption of new environmental monitoring technologies to manage stock externalities abstract with the development of modern information technologies relying on nanotechnologies and remote sensing a number of systems can be envisaged that allow for monitoring of the negative externalities generated by producers consumers or travelers road pricing schemes or individual emission meters for automobiles are two examples we analyze a dynamic model of stock pollution when the regulator has incomplete information on emissions generated by heterogeneous agents our contribution is to explicitly study a decentralized policy for adoption of monitoring equipment over time we determine the second best tax rates the pattern of monitoring technology adoption and identify conditions for the voluntary diffusion of monitoring technologies over time simulations show the welfare gains compared to alternative policies

location and housing demand abstract william alonso s model of the demand for housing and location in the monocentric city is one of two pre eminent models of its type the purpose of this article is to provide the detailed analysis and the comparative statics of the alonso model the complexity of the analysis is seen to derive from the nature of the constraint which is nonlinear and has slopes which vary with income a new result is that housing and closeness can be inferior even when they are taste normal the empirical direct variation of income with distance is explained consistent with the finding that income increase has indeterminate effects on location and housing demand the alonso specification is shown to be superior to others

transition and integration in europe implications for agricultural and food markets policy and trade agreements several central and eastern european countries are on their way to becoming members of the european union agriculture and agricultural policy is an important issue in eu enlargement this paper reviews the changes that have occurred in the agricultural and food sector of the ceecs and draws implications for the impact of eu enlargement on agri food markets and policy first those countries which have reformed most rapidly and most thoroughly are now doing best and their reform efforts have resulted in significant recovery and efficiency improvements second the impact of eastern enlargement will be less dramatic than initially feared although some uncertainty remains the possibility that the accession of the ceecs into the cap will cause a conflict with wto commitments has been reduced but cannot be excluded for some specific commodities depending on the ceec supply evolution however the likelihood of a wto conflict and the impact on the cap will depend more on the outcome of the negotiations in the wto millennium round than on enlargement similarly the impact of enlargement on the eu budget depends mostly on the political decision on the allocation of direct payments to ceec farmers and or of the extent of structural funds for ceecs

scientific basis for the greenhouse effect the international community may reach agreement to limit carbon emissions as early as i 992 when brazil will host a negotiating convention on climate change europe and japan have already made commitments to place ceilings on future emissions at or below present rates because the cost of switching to alternative fuels could be high with profound implications for long term economic growth especially in developing countries policy action must be based on the view that the science of the greenhouse effect is compelling this essay considers the scientific logic and evidence for the effect from the viewpoint of an economist it draws heavily on the findings of the intergovernmental panel on climate change ipcc i will stress that both the science and the policy discussion so far including by ipcc have focused insufficiently on effects in the very long term on the order of 250 to 300 years

household behavior in a monocentric urban area with a public sector abstract this paper has examined how a public sector alters the model of urban household behavior and its predictions the qualitative housing price and demand location characteristics remain unchanged by the introduction of either an exogenous or endogenous public sector in addition the household s response to tax rate and public service changes depend solely upon the nonlocational demand relationships the major impact of location per se on the household s demand vector is through an additional hicksian price term whether locational effects reinforce or vitiate nonlocational demand changes depends upon the compensated relationship between the good in question and housing this paper also investigated the design of neutral public budgets government budgets using property income or comprehensive sales taxes to finance public services cannot be neutral with respect to housing demand and location of the four types of taxes considered only a narrow based sales tax can finance public services neutrally

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

driving to opportunity local rents wages commuting costs and sub metropolitan quality of life we examine variation in local rents wage levels commuting costs household characteristics and amenities within metropolitan areas for 2071 areas covering the united states by density and central city status we demonstrate the sensibility of estimating wage levels by workplace not residence and recover decentralized rent gradients that fall with commuting costs we construct and map a willingness to pay index which indicates the quality of life typical households receive from local amenities when households are similar mobile and informed this index varies considerably within metros and is typically high in areas that are dense suburban sunny mild safe entertaining and have elevated school funding

agriculture in transition economies from common heritage to divergence the 23 former socialist countries in central and eastern europe cee and the commonwealth of independent states cis started the transition in 1989 1990 from a common institutional and organizational heritage represented by the soviet agricultural model despite the common heritage in agriculture the reform policies in cee and cis diverged from the start as significant differences emerged between the two groups of countries in legal attitudes to private land ownership transferability of land the extent of agricultural privatization and individualization and restructuring of farms this divergence in the implementation of agricultural reform has led to divergence in standard development measures the cee countries are outperforming the cis countries by growth in gdp and agricultural product since 1992 the productivity of agricultural labor in cee is generally increasing and in cis it is decreasing while the cis countries at best can be characterized as reluctant reformers the cee countries have achieved significantly higher levels of economic and institutional reform better performance in cee is associated with greater readiness of the governments in these countries to implement a comprehensive package of economic and social reform policies including more radical land reform and deeper individualization and restructuring of agriculture

pollution permits and environmental innovation abstract this paper starts with a warning about the negative impact of plain pollution allowance markets on environmental pollution innovation stand alone spot markets enable the government to expropriate an innovation by offering a competing technology pollution permits that puts an arbitrary downward pressure on the licensing price advance allowances reduce expropriation but still create suboptimal incentives for innovation they have the further drawback that permits are inefficiently used when the innovation occurs options to pollute at a given striking price fare better than allowances because they create private incentives to phase out pollution in the case of innovation we characterize the social optimum and show that it can be implemented by issuing options to pollute inter alia finally the paper compares ex ante and ex post government procurement surprisingly ex post licensing by the innovator to the government may yield a higher licensing fee than an ex ante contract

natural resource economics and conservation contributions of agricultural economics and agricultural economists research by agricultural economists on natural resources has been distinguished by an interdisciplinary emphasis and a dynamic perspective it has recognized technological and institutional constraints has been oriented toward solving concrete resource management and policy problems and has emphasized empirical and quantitative analysis agricultural economists have introduced methods for evaluating natural resource conservation efforts for predicting adoption of resource conservation technologies and for designing efficient and sustainable resource management policies they have identified ways of improving land management and preventing land degradation proposed reforms of institutions governing water allocation and water quality and introduced policies for balancing environmental and efficiency considerations in the management of pests biodiversity and livestock diseases their research has had substantial impacts on the formulation of resource conservation policies

fundamental irreversibilities in stock externalities abstract this paper concerns the irreversibility effect in stock externalities in an environment of uncertainty with learning taking place one may wish to under emit today to avoid potential environmental irreversibilities alternatively one may wish to under invest in pollution control capital avoiding investments in sunk capital that turn out to be wasted the paper develops theoretical results on the tension between these two effects and separates risk aversion from the irreversibility effect the paper also presents a simple example in climate change policy

transaction costs strategic interaction and farm restructuring this article offers a transaction cost explanation for the different paths of organizational adjustment in the case of the former state and collective farms in czech republic after 1989 the focus is the strategic interaction among the stakeholders in the agricultural organization undergoing restructuring in the presence of a neutral institutional environment the number of players involved in the intraorganizational process their ability to make collective decisions and their perceived payoffs in alternative farming structures determine the restructuring outcome these factors influence the choice between maintaining the inherited deployment of assets and the creation of a deeply restructured organization empirical results based on a farm level data set support this basic idea

the economics of controlling stock pollutants an efficient strategy for greenhouse gases abstract optimal control theory is applied to develop an efficient strategy to control stock pollutants such as greenhouse gases and hazardous waste the optimal strategy suggests that at any time the marginal costs of abatement should be equated with the present value of the marginal damage of timely unabated emission the optimal strategy calls for increasingly light abatement over time as the pollutant stock accumulates the optimal policy applied to greenhouse gases suggests moderate abatement efforts at present with the potential for much greater future efforts

the gains from differentiated policies to control stock pollution when producers are heterogeneous we derive optimal input taxes to control stock pollution problems generated by heterogeneous agents the taxes vary over time and in response to differences of asset quality and technology choice we also derive second best policies and compare them to the efficient policy and also among themselves different policies will affect the timing for when and the extent to which conservation technologies are adopted a numerical example based on the california drainage problem shows significant efficiency gains from the optimal policy compared to no intervention but much of the gains are lost with second best interventions the gains from optimal policies do not always increase with the degree of heterogeneity copyright 2008 oxford university press

environmental policy compliance and innovation abstract this note provides an industrial organization perspective on the use of tradeable emissions permits in the context of so2 pollution in the usa and reports on some of our ongoing work on compliance and innovation in pollution abatement

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

the effects of pricing policies on water conservation and drainage a general model of adoption of input conserving technologies by competitive firms is introduced using drip irrigation as an example an environmental regulation such as a drainage effluent charge is shown to influence adoption early adopters are likely to be producers with less efficient fixed assets land of low quality or antiquated capital higher input costs higher water prices or greater depth to groundwater and in more environmentally sensitive regions simulations show that drainage regulations can be expected to play a major role in adoption of more efficient irrigation technologies in california thus conservation may be a key to solving resource scarcity problems and reducing external environmental costs

the effect of agricultural policies on land use and environmental quality in this paper i consider the environmental quality gains that may be achieved by reducing agricultural income supports a new methodology is developed to estimate land use shares in an application to wisconsin milk price support reductions result in shifts of marginal agricultural land to forest reducing soil erosion and providing off site water quality improvements the environmental benefits are estimated to be at least as large as the decreased welfare burden on consumers and taxpayers indicating a central role for environmental quality considerations in motivating policy reforms and a more efficient means of achieving the environmental quality goals of land retirement programs

learning and stock effects in environmental regulation the case of greenhouse gas emissions abstract this paper concerns the optimal regulation of greenhouse gases that lead to global climate change in particular we focus on uncertainty and learning which over time resolves uncertainty we present an empirical stochastic model of climate economy interactions and present results on the tension between postponing control until more is known vs acting now before irreversible climate change takes place uncertainty in our model is in the damage caused by global warming the results suggest that a temporary carbon tax may dominate a permanent one because a temporary tax may induce increased flexibility

optimal combination of pollution prevention and abatement policies the case of agricultural drainage the adoption of pollution prevention and abatement practices is examined in the context of a model of exhaustible resource use with a backstop technology for the sake of concreteness the paper focuses on the problem of water logging caused by the subsurface accumulation of agricultural drainwater in modelling this problem a region s underground capacity to store drainwater is considered an exhaustible resource while the installation of subsurface drainage is viewed as the corresponding backstop technology or abatement practice the exhaustible resource is typically over exploited due to common access problems which forces a suboptimally fast adoption of the abatement practice conservationist irrigation technologies such as drip and sprinkler systems tend to reduce drainwater generation and their adoption could increase social welfare by delaying the abatement stage public policies are suggested to increase the adoption of such conservationist technologies data from california is used to illustrate the results and to demonstrate the efficacy of the model for policy purposes while the setting used for the analysis in this paper is quite specific i e water logging the same general modelling ideas may be applied to many other problems of environmental degradation

optimal pricing of environmental and natural resource use with stock externalities abstract underlying some of the most pressing environmental problems are the interlinked resource and environmental stock externalities with threshold effects using a simple dynamic model it is shown how in the face of such externalities the static market based policy instruments such as pigouvian taxes should be modified it is shown that even if for an initial period there is going to be no pollution stock damage the optimal policy still requires that abatement begins immediately and at increasing rates simulation of the model for the case of fossil fuel burning and the consequent global warming shows that the optimal carbon tax and therefore the optimal control strategy is particularly sensitive to changes in the marginal abatement cost and the level of fossil fuel demand policy simulations contrast the optimal control policy with and estimate the welfare losses from alternative policies deriving from arbitrary tax paths the latter include i a no tax policy ii a constant carbon tax rate iii the european community s proposed carbon tax path and iv a delayed optimal tax path

a reason for quantity regulation in a variety of situations governments regulate undesirable activities by controlling quantities rather than charging taxes blue laws prohibit all liquor sales on sundays rather than impose higher taxes on that day zoning restrictions limit commercial construction in residential areas rather than charge for nuisance to neighbors anti smoking and anti trust laws restrict rather than tax particular conduct fishing and hunting rules allow hunting during particular time periods rather than tax the catch pollution controls impose limits rather than tax emissions quantity regulations are common in the financial sphere as well in the united states banking regulations for many years prohibited interstate banking as well as ownership of investment banks by commercial banks in many countries commercial banks are limited in the amount of various activities they can pursue such as real estate investments or borrowing in foreign currency in some countries banking laws prohibit all lending to the parties related to the owners of the bank the so called related lending rather than impose liability rules on loans to related parties that are found to be fraudulent or unsafe rafael la porta et al 2000 despite this common practice economists generally prefer taxes and liability rules to quantity controls and property rights rules robert ellickson 1973 louis kaplow and steven shavell 1996 1997 nathaniel keohane et al 1998 as the instrument for reducing undesirable conduct when explaining why quantity regulations are so pervasive they first make the political economy argument that quantity restrictions are favored by incumbent firms that wish to deter entry james buchanan and gordon tullock 1975 but this argument is not general it does not explain such quantity restrictions as blue laws and hunting and fishing regulations which affect all market participants equally some academics also argue that because certain activities such as smoking are seen as morally wrong by the community their level is regulated at zero in other instances however such as pollution and hunting positive but limited levels of activity are allowed inconsistent with the moral argument that the reason for quantity regulation is the special attraction of zero in this paper we present an alternative reason for quantity regulations one from the perspective of a benevolent government we begin with the observation of gary becker and george stigler 1974 that law enforcement is not free but is fundamentally an economic problem throughout human history and throughout the world today there are chronic problems of under enforcement witness the low level of tax compliance in much of the developing world and over enforcement by politically motivated prosecutors or regulators an analysis of pigouvian taxes versus quantity restrictions must recognize that in reality neither policy is free and automatic to enforce in general the choice of policies itself can facilitate or discourage enforcement in two ways first policies can shape the incentives for enforcement second policies can influence the costs of enforcement in our earlier work glaeser and sheifer 2000 glaeser et al 2001 we have focused on incentives and shown that quantity regulations can be used as an optimal instrument to raise the rewards to law enforcers for identifying violations here we focus not on the incentives for the enforcers but on the costs of finding violations these costs are often lower in the case of quantity restrictions we show that even when quantity regulations unlike taxes restrict some socially efficient conduct the reduced costs of identifying violations can enhance enforcement and overall efficiency such reliance of quantity regulation is especially important when private enforcement is crucial as in the case of enforcing department of economics harvard university cambridge ma 02138 we thank the national science foundation for financial support and louis kaplow for extremely helpful comments

the dynamics of spatial pollution the case of phosphorus runoff from agricultural land abstract the paper analyzes based on a land classification system the optimal management of negative production externalities while taking into account the intertemporal and spatial aspects of the problem to incorporate both aspects simultaneously a two stage modeling approach is proposed where the solution of the spatial problem first stage is optimized over time second stage as a result it is possible to relate long run and short run supply and input demand functions attention is given to runoffs from agricultural land leading to the contamination of a water body in particular the one of phosphorus and the eutrophication of lakes the employment of a land classification system supports a full information approach and allows to address the optimal management of mineral fertilizer and manure based on zonal taxes zonal permits and zonal standards which all vary over time

cost effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality this paper quantitatively analyses the cost effectiveness of alternative green payment policies designed to achieve a targeted level of pollution control by heterogeneous microunits these green payment policies include cost share subsidies that share the fixed costs of adoption of a conservation technology and or input reduction subsidies to reduce the use of a polluting input the paper shows that unlike a pollution tax that achieves abatement through three mechanisms a negative extensive margin effect a negative intensive margin effect and a technology switching effect a cost share subsidy and an input reduction subsidy are much more restricted in the types of incentives they provide for conservation of polluting inputs and adoption of a conservation technology to control pollution moreover they may lead to varying levels of expansion of land under production costs of abatement with alternative policies and implications for production and government payments are compared using a simulation model for controlling drainage from irrigated cotton production in california with drip irrigation as a conservation technology

incentives precision technology and environmental protection abstract this paper calls for a reevaluation of the pollution problem in order to devise efficient strategies for its control it contends that a fundamental cause of pollution is inefficiency in input use during the production process this inefficiency manifests itself as input waste and polluting residues precision technologies can increase the effectiveness of inputs used in production and reduce pollution generation despite their potential economic and ecological benefits adoption of precision technologies has been slow this paper presents a conceptual framework to identify and analyze the specific factors that affect their diffusion among microunits these include various heterogeneous characteristics of microunits prices which do not reflect the relevant scarcities due to distortionary regulatory policies and lack of institutional mechanisms for efficient allocation of inputs and outputs it rationalizes the observed variations in the appropriate choice of technology across microunits and argues for the need to broaden the range of incentive based instruments for environmental protection beyond pollution taxes

research needs and challenges in the few system coupling economic models with agronomic hydrologic and bioenergy models for sustainable food energy and water systems on october 12 13 a workshop funded by the national science foundation was held at iowa state university in ames iowa with a goal of identifying research needs related to coupled economic and biophysical models within the few system approximately 80 people attended the workshop with about half representing the social sciences primarily economics and the rest from the physical and natural sciences the focus and attendees were chosen so that findings would be particularly relevant to sbe research needs while taking into account the critical connectivity needed between social sciences and other disciplines we have identified several major gaps in existing scientific knowledge that present substantial impediments to understanding the few system we especially recommend research in these areas as a priority for future funding 1 economic models of decision making in coupled systems deliberate human activity has been the dominant factor driving environmental and land use changes for hundreds of years while economists have made great strides in modeling and understanding these choices the coupled systems modeling literature with some important exceptions has not reflected these contributions several paths forward seem fruitful first baseline economic models that assume rationality can be used much more widely than they are currently moreover the current generation of iams that include rational agents have emphasized partial equilibrium studies appropriate for smaller systems to allow this approach to be used to study larger systems the potential for and consequences of general equilibrium effects should be studied as well second it is important to address shortcomings in these models of economic decision making valuable improvements could be gained from developing coupled models that draw insights from behavioral economics many decision makers deviate systematically from actions that would be predicted by strict rationality but very few iams incorporate this behavior potentially leading to inaccurate predictions about the effects of policies and regulations improved models of human adaptation and induced technological change can also be incorporated into coupled models particularly for medium to long run models decisions about adaptation and technological change will have substantial effects on the conclusions and policy implications but more compelling methods for incorporating these changes into modeling are sorely needed in addition some economic decisions are intrinsically dynamic yet few coupled models explicitly incorporate dynamic models economic models that address uncertainty in decision making are also underutilized in coupled models of the few system 2 coupling models across disciplines despite much recent progress established models for one component of the few system often cannot currently produce outcomes that can be used as inputs for models of other components this misalignment makes integrated modeling difficult and is especially apparent in linking models of natural phenomena with models of economic decision making economic agents typically act to maximize a form of utility or welfare that is not directly linked to physical processes and they typically require probabilistic forecasts as an input to their decision making that many models in the natural sciences cannot directly produce we believe that an especially promising approach is the development of bridge models that convert outputs from one model into inputs for another such models can be viewed as application specific reduced form distillations of a richer and more realistic underlying model ideally these bridge models would be developed in collaborative research projects involving economists statisticians and disciplinary specialists and would contribute to improved understanding in the scientific discipline as well 3 model validation and comparison there is little clarity on how models should be evaluated and compared to each other both within individual disciplines and as components of larger iams this challenge makes larger integrated modeling exercises extremely difficult some potential ways to advance are by developing statistical criteria that measure model performance along the dimensions suitable for inclusion in an iam as well as infrastructure and procedures to facilitate model comparisons focusing on the models out of sample distributional forecasting performance as well as that of the iam overall is especially promising and of particular importance moreover applications of iams tend to estimate the effect of hypothetical future policy actions but there have been very few studies that have used these models to estimate the effect of past policy actions these exercises should be encouraged they offer a well understood test bed for the iams and also contribute to fundamental scientific knowledge through better understanding of the episode in question the retrospective nature of this form of analysis also presents the opportunity to combine reduced form estimation strategies with the iams as an additional method of validation

rural urban welfare program and labor force participation nonmetro poor in the midwest participate more in the labor force and less in welfare programs than metro poor we formalize how household composition capital labor market conditions and state specific regulations define opportunity sets then estimate a bivariate binomial probit model of work and program participation choices an oaxaca decomposition analysis is conducted to compare differences in characteristics to differences in behavior in explaining the two groups choices we find no behavioral basis for the difference in labor market participation and while most of the lower midwestern nonmetro welfare program participation is due to demographics some is due to different life cycle behavior

water quantity management in a heterogeneous landscape with farsighted farmers agricultural production contributes to many environmental problems in semi arid areas agricultural irrigation causes the so called waterlogging phenomenon this phenomenon is both spatial and dynamic since percolation depends on soil quality summed up in landscape heterogeneity and evolves along time furthermore farmers can be farsighted with respect to their contribution to percolation we study regulation schemes to be implemented to restore the socially optimal spatial and temporal production plan of farmers in such a context we show that both a temporal tax on percolation and a spatio temporal tax on inputs both at the extensive and at the intensive margin are efficient for the restoration of the socially optimal solution furthermore a numerical example demonstrates that the consequences of implementing a fiscal scheme designed for myopic farmers whereas they are farsighted depends on the distribution of soil quality

revealed preference and location choice abstract the assumption that population and structural densities are defined over parcels of land with zero area is problematic when interpreting the standard residential land use model as approximating a large finite economy this paper extends revealed preference theory to depict a spatial economy with land parcels of finite area the model generalizes the standard utility function approach allowing for many consumer types with different tastes and incomes and labor leisure choice to show that the most important predictions of the standard theory hold in the general finite framework studied here

information and the dynamics of environmental protection the concept of the critical period earlier work on environmental decisions under uncertainty is extended from two periods to many permitting treatment of a richer variety of problems implications for pollution control policy of several different kinds of ecosystem recovery dynamics are considered in the context of improving information about ecosystem behavior and preferences for environmental goods multiperiod analogs of the two period concept of quasi option value are developed

innovation in pollution control comparisons of the various institutional arrangements for controlling pollutant emissions from individual sources effluent fees effluent control subsidies marketable permits and direct command and control regulation have usually focused on their static efficiency properties and institutional feasibility e g dales 1968 zerbe 1970 baumol and oates 1975 kneese and schultze 1975 marin 1978 mills and white 1978 spence and weitzman 1978 russell 1979 a relatively neglected area has been the study of how each arrangement influences innovation in pollution control a few studies e g kneese and schultze 1975 marin 1978 mills and white 1978 russell 1979 have casually claimed that the control methods that rely on economic incentives provide superior incentives for innovation but there have been few systematic studies of the question this paper provides a simple model of pollution control innovation by a profitmaximizing polluter who is subject to the various control methods the consequences of the methods will be explored in three major contexts first we assume that the polluter and the innovation is a small enough part of the overall pollution problem so that none of the important marginal conditions are changed by the innovation second we assume that the polluter and the innovation are important enough so that marginal conditions are changed by the innovations but that the governmental authority determining pollution control incentives or levels fails to make the appropriate adjustments third we again assume that the innovation causes marginal conditions to change but in this case the governmental authority makes the appropriate adjustments we use the term ratcheting to describe this last phenomenon in all cases we assume that the innovating polluter correctly predicts the reactions of the governmental authority and bases his innovation decisions on that prediction a profit maximizing entrepreneur would normally be expected to adopt any innovation that promised gains present discounted value to him in excess of initial

environmental policy reconsidered the role of technological innovation abstract this paper discusses recent environmental policy wisdom in the light of technological and organizational innovation starting from empirical evidence it argues that the main econometric models which are used in environmental policy analysis do not consider properly the determinants and effects of innovation and offer unreliable estimates of policy effects some solutions to the latter problem show that the integration between environmental policy and industrial policy can be more efficient than traditional environmental policies in the protection of the environment technological cooperation moreover can be an important instrument to stabilize international environmental agreements

technology as an agricultural pollution control policy in this paper we consider the market level impacts of factor augmenting innovations designed to reduce the use of fertilizers and pesticides first within the context of a simple two factor model and then through a simulation model of the u s corn market in both models the impacts depend on the output demand elasticity and input substitution elasticities the principal conclusion of the simulation analysis is that the potential for new techniques to reduce the use of agricultural chemicals is limited capital augmenting innovations would actually raise fertilizer and pesticide usage land augmenting innovations would also tend to increase pesticide usage

location housing and leisure demand muth s model of cbd employed household behavior has been successfully extended to include labor leisure choice in order to deal with the original version s deficient treatment of commuting time the extension demonstrates how all the basic results of the simpler formulation remain valid this paper provides a similar extension for the locally employed household variant of muth s model the analysis demonstrates a surprising difference between the demand gradient and comparative static results for the locally employed household without leisure choice and the locally employed household with leisure choice not observed for the cbd employed household model

land reform and farm restructuring what has been accomplished to date the countries of east central europe ece and the former soviet union fsu entered the transition in 1989 1990 with a common heritage in agriculture most land regardless of its ownership was cultivated collectively in large scale farms with thousands of hectares and hundreds of member workers the commercial production from the collective sector was supplemented by subsistence oriented individual agriculture based on rural household plots of less than one hectare product markets and input supply channels were largely controlled by state organizations within an administrative command framework budget constraints virtually did not exist the persistent inefficiency of socialized agriculture was usually attributed to collective production which is rare in countries with a marketoriented economy and to farm sizes that were too large compared to the observed market best practice the strategy of agricultural transition formulated in the early 1990 s accordingly envisaged a transformation from collective to individual agriculture as the ultimate goal individual farmers could form associations to ensure efficient farm services and engage in land transactions to achieve optimal farm sizes pragmatic considerations suggested an intermediate stage involving transition to downsized but still relatively large corporate or cooperative farms based on private ownership of land and assets and with radically modified profit motivated management