the state contingent approach to the noah s ark problem abstract biodiversity outcomes arising from conservation programs depend on the future state of nature yet standard economic models of biodiversity conservation are not state contingent we develop a state contingent approach to the noah s ark problem the problem of efficiently allocating limited funds to conserve biodiversity and model conservation actions under uncertainty under the state contingent approach noah will prepare for unfavorable and unexpected states of nature ex ante rather than relieving suffering ex post different species will be chosen for the ark and particularly species that underpin the foundations of ecosystems more generally the state contingent ranking equation justifies conservation policy that treats the cause rather than the symptom of biodiversity loss and recommends strategies that focus on ecosystem resilience and integrity in comparison to the standard model the state contingent approach leads to a more detailed and explicit allocation of resources jel q54 q57 q58

agriculture and the environment an economic perspective with implications for nutrition abstract agricultural production has harmed environmental quality primarily because of inadequately designed policies and natural resource projects hence most of the harmful side effects of agriculture can be reduced or eliminated by replacing these bad institutions with policies and projects that create financial dis incentives for un desirable behavior provided appropriate policies are followed environmental constraints should not keep people from meeting nutritional standards that emphasize more fruits vegetables and fish nutritional well being can be achieved with policies and projects that give people sufficient access to food that has been produced with methods that minimize adverse impacts on the environment

volatility spread and stock market response to earnings announcements abstract using a broad sample of earnings announcements we find a monotonic increase in the spread between call and put implied volatilities as it gets closer to the earnings announcement date the steady build up of volatility spread in the days leading up to the announcement date coupled with the predictive power of cumulative abnormal implied volatility spread on subsequent announcement returns suggests that informed traders are the driving force behind the option market activities prior to earnings announcements such informed trading as proxied by the abnormal implied volatility spread increases rather than decreases the stock market response to earnings announcements after controlling for an array of firm and announcement characteristics this effect is most pronounced when the pre earnings option trading volume is heightened overall our findings lend strong support to the notion that informed options trading immediately before earnings announcements helps alleviate the stock market under reaction to earnings announcements and make it closer to a complete response

haggling over substitutes abstract using a model of substitutable goods i determine generic conditions on tastes which guarantee that fixed prices are not optimal the fully optimal tariff includes lotteries that is a profit maximising seller would employ a haggling strategy we show that the fully optimal selling strategy in a class of cases requires a seller to not allow themselves to focus on one good but to remain haggling over more than one good this throws new light on the selling strategies used in diverse industries these insights are used to provide a counter example to the no lotteries result of mcafee and mcmillan j econ theory 46 1988 335

the roles of ownership ecology and economics in public wetland conservation decisions abstract scholars have studied the problem of optimal reserve site selection however the actual conservation choices made by government decision makers may yield reserve networks that are far from optimal this paper uses data on patterns of wetland conservation in austria in order to identify patterns in government decisions regarding which wetlands to protect we find that conservation decisions are guided at least in part by variation in ecological value and economic cost however there is also a marked bias against conserving lands that happen to be privately owned this bias against protecting private land is likely to be cost ineffective driven by asymmetric information and political pressure

spatial heterogeneity contract design and the efficiency of carbon sequestration policies for agriculture abstract in this paper we develop methods to investigate the efficiency of alternative contracts for carbon c sequestration in cropland soils taking into account the spatial heterogeneity of agricultural production systems and the costs of implementing more efficient contracts we describe contracts being proposed for implementation in the united states and other countries that would pay farmers for adoption of specified practices per hectare contracts we also describe more efficient contracts that would pay farmers per tonne of soil c sequestered and we show how to estimate the costs of implementing these more efficient contracts in a case study of a major agricultural region in the united states we confirm that the relative inefficiency of per hectare contracts varies spatially and increases with the degree of spatial heterogeneity the results also show that per hectare contracts are as much as five times more costly than per tonne contracts a degree of inefficiency similar to that found in assessments of command and control industrial emissions regulations measurement costs to implement the per tonne contracts are found to be positively related to spatial heterogeneity but are estimated to be at least an order of magnitude smaller than the efficiency losses of the per hectare contract for reasonable error levels this finding implies that contracting parties could afford to bear a significant cost to implement per tonne contracts and achieve a lower total cost than would be possible with the less efficient per hectare contracts

predisclosure information firm capitalization and security price behavior around earnings announcements several studies on the relationship between earnings reports and security price behavior provide evidence suggesting that a significant portion of the information revealed through earnings reports is reflected in security prices prior to the report month e g ball and brown 1968 and brown and kennelly 1972 this has been attributed at least partly to the existence of other more timely sources of information which allow market agents to forecast earnings prior to their release the evidence above reflects an average finding across all firms one question of interest is whether there are significant systematic crosssectional differences in the security price reactions to earnings announcements of firms which are associated with specific firm characteristics that lead to differential amounts of predisclosure information this study focuses on firm size capitalization as one such characteristic a firm

the conservation reserve program as a least cost land retirement mechanism mechanism design theory is used to characterize the properties of a least cost crp if marginal land rents decrease with acres farmed then a least cost crp is a set of nonlinear price schedules if marginal land rents are independent of acres farmed then an offer system constitutes a least cost crp the least cost offer system gives a useful estimate of the upper bound of a least cost crp empirical results suggest that a 34 million acre crp should have cost no more than 1 billion per year

approximation in mechanism design with interdependent values abstract this paper studies the revenue maximization problem in environments wherein buyers have interdependent values and correlated types we show that 1 when the system of feasible sets is a matroid and buyer valuations satisfy a single crossing condition the generalized vickrey clarke groves mechanisms with lazy reserves vcg l are ex post incentive compatible and ex post individually rational 2 if in addition the valuation distribution satisfies a generalized monotone hazard rate condition the vcg l mechanism with conditional monopoly reserves is approximately optimal then we construct an ascending auction that implements the truth telling equilibrium of a vcg l mechanism in ex post equilibrium finally we discuss the connection between the vcg l mechanisms and greedy algorithms studied in lehmann et al 2002 and deferred acceptance auctions studied in milgrom and segal 2014 and the impact of competition by proving a bulow and klemperer 1996 type result

economic considerations in the optimal size and number of reserve sites abstract the debate among ecologists on the optimal number of reserve sites under a fixed maximum total reserve area the single large or several small sloss problem has so far neglected the economic aspects of the problem this paper argues that economic considerations can affect the optimal number and size of reserve sites and should therefore be taken into consideration in the sloss discussion the paper presents a tractable analytical model to determine the socially optimal number of reserve sites to be allocated in a farming area under a fixed total reserve area taking the opportunity costs of nature conservation in this case agricultural profits into consideration furthermore the effect of land trade and related transaction costs on the socially optimal number of reserve sites is analyzed the analysis suggests that in the presence of diminishing returns to farming area the socially optimal number of reserve sites which maximizes social welfare is generally larger than the ecologically optimal number which maximizes an ecological objective such as population viability when the opportunity costs of conservation can be offset by land transactions however the socially optimal number of reserve sites might be closer to the ecological optimum

efficiency of second generation biofuel crop subsidy schemes spatial heterogeneity and policy design policy schemes that aim to stimulate the cultivation of biofuel crops typically ignore the spatial heterogeneity in costs and benefits associated with their production because of spatial heterogeneity in biophysical and current agricultural production factors potential gains from stimulating biofuel crops are non uniformly distributed across space this paper explores implications of this type of heterogeneity for the net benefits associated with different subsidy schemes we present a simple framework based on discounted cash flows to assess potential gains from introducing the notion of heterogeneity into stimulation schemes we show that agricultural subsidy spending can be reduced in a pareto efficient way and simultaneously improve the total stimulation potential of biofuel policies when schemes 1 are production based instead of land based 2 accommodate differences in opportunity costs and 3 target sites where subsidies for conventional agricultural land use types are high these results are robust for a range of different bioenergy prices and the relative gains of addressing these key elements in policy compared to conventional stimulation schemes increase with lower bioenergy prices and are largest when low prices coincide with high emission reduction ambitions

differences and similarities between ecological and economic models for biodiversity conservation abstract in this paper we investigate an important obstacle which substantially complicates co operation between ecologists and economists but which has received little attention so far differences between the modelling approaches in economics and ecology to understand these differences 60 models addressing issues relevant to biodiversity conservation have been selected randomly from eight international economic and ecological journals the models have been compared according to a number of criteria including the models level of generality the mathematical techniques employed for formulation and solution of the models the level of complexity and the way time space and uncertainty are taken into account the economic models sampled are formulated and analysed analytically tend to be relatively simple and are mostly used to investigate general questions furthermore they often ignore space dynamics and uncertainty although some ecological models have similar properties there is also a substantial number of another type of ecological models that are relatively complex and analysed by simulation these models tend to be rather specific and often explicitly consider dynamics space and uncertainty the integrated ecological economic models are observed to lie in the middle between ecological and economic models an unexpected result is that they are not more complex than ecological and economic models as one could have expected from a simple merger of models from both disciplines but have an intermediate complexity

auctions with online supply abstract online advertising auctions present settings in which there is uncertainty about the number of items for sale we study mechanisms for selling identical items when the total supply is unknown but is drawn from a known distribution items arrive dynamically and the seller must make immediate allocation and payment decisions with the goal of maximizing social welfare we devise a simple incentive compatible mechanism that guarantees some constant fraction of the first best solution a surprising feature of our mechanism is that it artificially limits supply and we show that limiting the supply is essential for obtaining high social welfare although common when maximizing revenue commitment to limit the supply is less intuitive when maximizing social welfare the performance guarantee of our mechanism is in expectation over the supply distribution we show that obtaining similar performance guarantee for every realization of supply is impossible

option listing and the stock price response to earnings announcements abstract we examine the effect of option listing on the immediate stock price response to earnings announcements contrary to prior studies using earlier data we find firms initiating option trading after 1986 fail to exhibit a significant decline in earnings response we then examine 420 firms initiating option trading during 1973 1993 in a series of tests controlling for market wide effects and changing firm size we find some evidence that option listing may actually increase the stock price response to earnings but no evidence listing reduces the response both longitudinal and cross sectional tests produce similar results

optimal land development with endogenous environmental amenities a spatially explicit model of the optimal timing and location of land development is presented that incorporates dynamic interactions between land development and water quality ignoring two way interactions leads to a lower level of water quality more development and lower social welfare the optimal pace and pattern of development can be achieved through the assessment of an impact fee that internalizes pollution damages and irreversibility costs our results demonstrate the importance of accounting for the spatial dimension of land use the interdependence between land use and environmental quality and development irreversibility in models of urbanization and amenity driven growth copyright 2008 oxford university press

targeting conservation efforts in the presence of threshold effects and ecosystem linkages abstract the prevailing federal policy of targeting conservation programs on the basis of physical criteria tends to ignore the threshold effect of conservation efforts and the correlation between alternative environmental benefits in this article we examine the extent to which conservation funds will be misallocated when threshold effects and correlated benefits are ignored we show that targeting conservation efforts based on physical criteria or political equity concerns may actually lead to the lowest possible benefits to society from conservation expenditure ignoring correlated benefits may lead not only to misallocation of conservation funds among watersheds but also to incorrect resources e g land streams being targeted for conservation the empirical analysis focuses on riparian habitat investments for salmon restoration in the pacific northwest we show that a large portion of conservation benefits would be lost when threshold effects and correlated benefits are ignored and argue that funds should be allocated so that the total value of environmental benefits is maximized not the total amount of resources protected

targeting incentives to reduce habitat fragmentation the fragmentation of wildlife habitat has long been recognized as a principal threat to terrestrial biodiversity in this paper we develop a theoretical model to analyze the spatial targeting of incentives for the restoration of forested landscapes when land quality is spatially heterogeneous and wildlife habitat can be enhanced by reducing fragmentation we consider a regulator who uses subsidies to encourage the conversion of private agricultural land to forest on a pre defined set of landscapes the regulator can observe land use choices but not the opportunity costs on individual land parcels the important insight to emerge from the theoretical analysis is that solutions at or near corners are a strong possibility on each landscape either none or all of the agricultural land should be converted to forest corner solutions are directly linked to the spatial process determining habitat benefits to verify the theoretical insight we present a simulation of the effects of incentive based policies on the spatial distribution of forests in south carolina the empirical methodology integrates an econometric model of land use change with gis based landscape simulations the empirical findings strongly support our conjecture regarding corner solutions and the optimal targeting policy is shown to produce substantial welfare gains over a spatially uniform incentive

optimal pricing mechanisms with unknown demand the standard profit maximizing multi unit auction intersects the submitted demand curve with a preset reservation supply curve which is determined using the distribution from which the buyers valuations are drawn however when this distribution is unknown a preset supply curve cannot maximize monopoly profits the optimal pricing mechanism in this situation sets a price to each buyer on the basis of the demand distribution inferred statistically from other buyers bids the resulting profit converges to the optimal monopoly profit with known demand as the number of buyers goes to infinity and convergence can be substantially faster than with sequential price experimentation

efficiency equity tradeoffs in targeting payments for ecosystem services this article develops an analytic framework to analyze the tradeoff between economic efficiency and distributional equity in targeting payments for ecosystem services pes it also proposes an empirical procedure to trace out the efficiency equity frontier where the program is pareto optimal in the sense that it cannot be improved upon to achieve either higher efficiency or distributional equity without compromising the other we apply the procedure to the conservation reserve program crp the largest pes program in u s history to analyze a whether it is possible to improve both the efficiency and the distributional equity of the program and b what the choice made by crp administrators implies about the political economic balance results reveal that a crp administrators forfeited about 9 of efficiency for an 18 23 improvement in distributional equity depending on the equity indicator used in the eighteenth signup of the crp b reducing the maximum allowable rental rate for all contracts would improve efficiency at the cost of distributional equity c reducing the maximum county enrollment cap would reduce efficiency without generating much improvement in distributional equity and d the crp targeting criterion could be redesigned to achieve both higher efficiency and higher distributional equity

biological conservation in dynamic agricultural landscapes effectiveness of public policies and trade offs with agricultural production article i nfo land use change and land management intensification are major drivers of biodiversity loss especially in agricultural landscapes that cover a large and increasing share of the world s surface incentive based agri environmental policies are designed to influence farmers land use decisions in order to mitigate environmental degradation this paper evaluates the effectiveness of agri environmental schemes for biological conservation in a dynamic agricultural landscape under economic uncertainty we develop a dynamic ecological economic model of agricultural land use and spatially explicit population dynamics we then relate policies subsidies to grassland taxation of agricultural intensity to the ecological outcome probability of persistence of a species of interest we also analyze the associated trade offs between agricultural production in value and biological conservation in probability of persistence at the landscape scale

the optimal allocation of conservation funds abstract this paper presents a framework to evaluate alternative designs of conservation programs and their implications for the allocation of conservation funds we show that the efficient allocation of conservation funds must consider two important pooling effects cumulative effects and interrelationships among alternative environmental benefits ignoring the cumulative effects of environmental benefits may cause conservation funds to be overly dispersed geographically and as a result may result in minimum environmental benefits when the budget is small ignoring the interrelationships among alternative environmental benefits may result in not only misallocation of conservation funds among geographical areas but also incorrect resources being targeted for conservation practices implications of these results for the design of conservation programs are discussed

designing frameworks to deliver unknown information to support market based instruments this article reports on an australian auction to procure multiple environmental outcomes ecotender ecotender uses a catchment modelling framework cmf to estimate the impact landholder actions have on carbon terrestrial biodiversity aquatic function water quality and quantity and saline land area this framework solves the problem of linking paddock scale land use and management to catchment scale environmental outcomes this is the first time a market based instrument has been fully integrated from desk to field with a biophysical model for the purchase of multiple environmental outcomes a multiple outcome auction provides several new economic and scientific challenges this article discusses the ecotender approach to incorporating agency preferences modeling the joint production of environmental outcomes and reporting environmental scores results indicate that linking ecotender to the carbon market reduced the cost of procuring the environmental goods by 26 further preliminary estimates show that the environmental gains from scoring the joint production of multiple outcomes are between 30 and 50 to the agency

approximation in mechanism design this paper considers three challenge areas for mechanism design and describes the role approximation plays in resolving them challenge 1 optimal mechanisms are finely tuned to precise details of the distribution on agent preferences challenge 2 in environments with multi dimensional agent preferences economic analysis has failed to provide general characterizations optimal mechanisms challenge 3 optimal mechanisms are parameterized by unrealistic knowledge of the distribution of agents private preferences this paper surveys positive resolutions to these challenges with emphasis on basic techniques and their relevance to theory and practice

the effect of conservation priority areas on bidding behavior in the conservation reserve program we explore how a landowner s bid to enroll in the conservation reserve program crp is influenced by his parcel s designation as a conservation priority area cpa a theoretical model of a landowner s optimal bid is presented and we demonstrate the ambiguity in a landowner s optimal bid response to cpa designations the bid choice is analyzed using a data set of accepted and unaccepted offers during three crp sign up periods we focus empirically on a subset of offers from the prairie pothole cpa to identify whether bid responses to exogenous location factors differ across landowners with varying opportunity costs to enrollment jel q15 q18

an ecological economic modelling procedure to design compensation payments for the efficient spatio temporal allocation of species protection measures abstract using an interdisciplinary approach we present an ecological economic modelling procedure to design compensation payments for species protection we develop our procedure on the example of white stork protection in a spatio temporally structured landscape generated by human land use the proposed procedure is able to solve complex allocation problems such as the spatio temporal allocation of a budget among more than two areas with spatially differing species specific cost and benefit functions of any shapes furthermore the procedure delivers the efficient compensation payments not only qualitatively but quantitatively and is hence relevant to the implementation of species protection policies

envy freedom and prior free mechanism design abstract we consider the provision of an abstract service to single dimensional agents our model includes position auctions single minded combinatorial auctions and constrained matching markets when the agents values are drawn independently from a distribution the bayesian optimal mechanism is given by myerson 1 as a virtual surplus optimizer we develop a framework for prior free mechanism design and analysis a good mechanism in our framework approximates the optimal mechanism for the distribution if there is a distribution moreover when there is no distribution this mechanism still provably performs well we define and characterize optimal envy free outcomes in symmetric single dimensional environments our characterization mirrors myerson s theory furthermore unlike in mechanism design where there is no point wise optimal mechanism there is always a point wise optimal envy free outcome envy free outcomes and incentive compatible mechanisms are similar in structure and performance we therefore use the optimal envy free revenue as a benchmark for measuring the performance of a prior free mechanism a good mechanism is one that approximates the envy free benchmark on any profile of agent values we show that good mechanisms exist and in particular a natural generalization of the random sampling auction of goldberg et al 2 is a constant approximation

a science driven market based instrument for determining the cost of environmental services a comparison of two catchments in australia abstract an auction based approach or mbi for market based instrument was used to purchase environmental services from landowners and to establish a long term economic resource forest plantations in two catchments in the state of victoria australia the policy goal of the mbi was to encourage the conversion of cleared land to forest plantations it was desired to achieve this while also reducing the amount of land affected by dryland salinity with minimum impact on water available for irrigation operationally interested landowners identified areas on which they would be willing to establish forest plantations and stated the amount of money they would require from the government to undertake plantation establishment this constituted a landowner bid the proposed planting area associated with each bid was processed through a quantitative hydrological model to estimate off site impacts on dryland salinity and the change in water yield resulting from the conversion of individual non forested areas to forest plantations landowner bids were then accepted or not based on the economic trade offs among dollars requested by a landowner reduction in water yield and decrease in dryland salinity to enable a comparison of costs the mbi was independently trialled in two catchments for both the cost to government of a hectare of plantation and or a hectare of salinity benefit was calculated a number of ways assuming the existence of a calibrated hydrological model costs associated with distributing money via such an mbi were publicity fieldwork processing the bids through the model probity legal and administration in the gippsland catchment the total cost to establish forest plantations was 5340 per ha whereas it was 1635 per ha in the corangamite catchment no salinity benefit was obtained in gippsland but in corangamite if considered in isolation of the economic forest plantation benefit the cost per hectare of salinity benefit was 5020 operational aspects of the mbi are presented and discussed and a comparison is made to the expected costs of a conventional non science driven approach to landowner incentives

a nearly optimal auction for an uninformed seller abstract this paper describes a nearly optimal auction mechanism that does not require previous knowledge of the distribution of values of potential buyers the mechanism we propose builds on the new literature on the elicitation of information from experts we extend the latter to the case where the secret information shared by the experts potential buyers in our model can be used against them if it becomes public knowledge

relationship between differential amounts of prior information and security return variability this study investigates the relation between stock return variability at annual earnings announcements and the amount of prior information available about a firm which is measured by both the number of security analysts annual earnings forecasts and firm size market value of common equity we find that each of these information measures is inversely related to return variability at annual earnings announcements after controlling for differences in the other this result suggests that number of security analysts earnings forecasts and firm size measure dimensions of the amount of prior information available about a firm that are not subsumed by one another the study also provides evidence using empirically generated distributions that test statistics derived from squared standardized market model prediction errors have larger means and variances for firms with few analysts forecasts or for small firms than for firms with many analysts forecasts or for large firms this result implies that the probability of obtaining large values of those test statistics is greater for firms with few analysts forecasts or for small firms therefore the probability of concluding there is increased return variability at annual earnings announcements is greater for those firms consistent with marais 1984

voluntary conservation of endangered species when does no regulatory assurance mean no conservation abstract voluntary conservation agreements are becoming increasingly important in implementing the endangered species act on private land we analyze when such agreements arise and what level of conservation they generate in the presence of uncertainty about future conservation benefits and irreversibility of habitat loss and species extinction our results suggest that the likelihood of an agreement and the resulting conservation levels depend on the background threat of regulation the cost advantage offered by voluntary agreements and the availability of assurances regarding future regulation under conditions likely to hold in practice conservation agreements that offer assurances may generate higher levels of conservation and higher net social benefits than agreements that do not offer assurances however the resulting level of conservation will not be optimal and may be lower than that attainable under regulation

relative and absolute scarcity of nature assessing the roles of economics and ecology for biodiversity conservation abstract our aim in this essay is to identify and analyze some of the difficulties with interdisciplinary integration of economic and ecological contributions to the study of biodiversity loss we develop our analysis from a widely accepted definition of economics which is based on the concept of scarcity taking a closer look at this notion we find that economics actually limits itself to a very particular aspect of scarcity which we denote as relative scarcity we describe in what respect the economic approach towards biodiversity is based on this notion and also reflect on the specific understanding of the relation of humans and nature behind the economic approach we then turn to absolute scarcity as another notion of scarcity and show that this is not within the scope of economics but has been a theme of ecology and ecological economics we describe in which way ecological and ecological economic approaches towards biodiversity are based on the idea of absolute scarcity and also reflect on the specific understanding of the human nature relationship behind this notion of scarcity against this background we discuss the roles of economics and ecology for nature conservation we conclude that the interdisciplinary integration of ecology and economics requires a philosophical underpinning and suggest a framework for further research

intra industry information transfers associated with earnings releases abstract the impact that a firm s earnings releases have on the stock prices of other firms in its industry is examined for an identifiable sub set of firms the results are consistent with a significant information transfer occurring between the earnings release firm and the other firms in its industry this subset is identified by examining the impact of the release on the stock price of the announcing firm the magnitude of this impact is more significant for a sample of firms which have a larger percentage of their revenues in the same line of business as the earnings release firm vis a vis a sample with a lower percentage of their revenues from the same line of business alternative interpretations of the empirical results are also discussed the research findings have implications for information content and market efficiency research and for research on policy issues associated with disclosure regulation

earnings announcements and competing information abstract we investigate whether competing information primarily analyst reports reduces the usefulness of earnings announcements inconsistent with the view that information in analyst reports substitutes for earnings announcements we find a positive relation between absolute abnormal returns to the two types of disclosures this positive relation also characterizes subsequent period analyst reports relative to current period earnings announcements we also find that aggregate absolute reactions to both types of disclosures increased over 1986 1995 as a whole these results provide little support for the view that the informativeness of earnings announcements is eroded by competing information in the form of analyst reports

auctions versus negotiations which is the more profitable way to sell a company an auction with no reserve price or an optimally structured negotiation with one less bidder we show under reasonable assumptions that the auction is always preferable when bidders signals are independent for affiliated signals the result holds under certain restrictions on the seller s choice of negotiating mechanism the result suggests that the value of negotiating skill is small relative to the value of additional competition the paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory jel d44 g34 there are close analogies between standard price theory and the theory of auctions in an absolute english auction in which the price rises continuously until only one bidder remains and the seller is required to accept the final bid the sale price equals the lowest competitive price at which supply equals demand in the theory of optimal auctions the seller is treated as a monopolist who can choose any

spatially uniform versus spatially heterogeneous compensation payments for biodiversity enhancing land use measures the importance of compensation payments for biodiversity enhancing land use measures has grown over the past decade particularly in connection with agri environmental policy given that both the costs and the benefits of biodiversity enhancing land use measures are subject to spatial variation the criterion of cost effectiveness calls for spatially heterogeneous compensation payments however when deciding whether to implement uniform or heterogeneous compensation payments the regulator has to compare the disadvantage of uniform payments in terms of cost effectiveness with the disadvantages of spatially heterogeneous payments to help resolve this issue this paper provides a simple ecological economic model that allows the reduced cost effectiveness associated with uniform payments for biodiversity enhancing land use measures to be assessed for different types of benefit and cost functions

the economics of a public fund for environmental amenities a study of crp contracts the problem of targeting crp purchases to buy environmental amenities under productivity and environmental heterogeneity is considered gini coefficients and lorenz curves are used to measure the effectiveness of spending under alternative targeting criteria the environmental benefits considered are water erosion wind erosion surface water quality and wildlife habitat the three alternative targeting criteria examined include purchasing land according to i the benefit to cost ratio ii the level of benefits and iii the level of cost results indicate that the degree of variability and correlation determine the extent to which suboptimal targeting achieves a significant portion of available environmental benefits

voluntary environmental agreements good or bad news for environmental protection abstract there has been growing interest in the use of voluntary agreements vas as an environmental policy tool this article uses a simple model to determine whether vas are likely to lead to efficient environmental protection we consider cases where polluters are induced to participate either by a background threat of mandatory controls the stick approach or by cost sharing subsidies the carrot approach the results suggest that the overall impact on environmental quality could be positive or negative depending on a number of factors including the allocation of bargaining power the magnitude of the background threat and the social cost of funds