sensitivity to scale in contingent valuation the importance of the budget constraint the possible insensitivity of willingness to pay wtp values to changes in scale continues to cause concern within the contingent valuation cv literature although several reasons for this phenomenon have been suggested empirical evidence both supports and refutes insensitivity this paper presents data that suggest that insensitivity may be significantly determined by the individual s budget constraint the higher the proportion of income the expressed wtp represents the greater the insensitivity of that wtp to changes in the scale of the good irrespective of changes in underlying marginal utility the methodological implication for cv studies in health care is outlined

treasury bill auctions do bidders cost of funds and winning probability matter abstract we model heterogeneous bidders bidding decisions and derive equilibrium solutions under both discriminatory and uniform price auctions under the assumptions that bidders cost of funds is uniformly distributed and the winning probability is a linear decreasing function of the quoted price we show that a revenue maximizing issuer should consider bidders cost of funds and winning probability when choosing the optimal auction mechanism

the use and abuse of meta analysis in environmental and natural resource economics an assessment motivated by the 2006 report of a work group appointed by the environmental protection agency epa this paper examines the present state of meta analysis in environmental economics and offers recommendations for its future use to this end we summarize and assess 140 meta analyses from 125 published and unpublished studies covering 17 topical categories in environmental and resource economics first we provide several generic meta analysis models as reference points and discuss major estimation issues five econometric issues are identified as part of a complete analysis 1 sample selection criteria 2 basic data summary 3 primary data heterogeneity 4 heteroskedasticity and 5 non independence of multiple observations from primary studies second a tabular summary is presented for the 140 meta analyses with respect to estimation methods third a narrative summary is presented for 19 meta analyses including the three value of statistical life studies examined by the epa work group and one analysis from each of 16 other categories fourth we offer a set of best practice guidelines for future meta analyses in this and other areas of economics last the paper comments on the use of meta analytic methods for benefit transfers of environmental values

trade related intellectual property rights to biological resources socioeconomic implications for developing countries abstract the uruguay round of the general agreement on tariffs and trade proposed conferring trade related intellectual property rights trips to international firms on a variety of life forms and on biotechnology this proposal has been denounced by developing countries many developing countries have relied heavily on indigenous biotechnology from several decades in the area of high yielding seeds bio pesticides and fertilizers herbal medicines and household consumables this study analyzes the social economic and preservation implications of trips for three types of biological resources physically nonexhaustible resources physically exhaustible resources under current use and physically exhaustible potential future resources the study concludes that each of these resources may require different degrees of intellectual property right ipr protection for their sustained use further establishing ipr to products derived from genetic and biochemical resources is certainly necessary but not sufficient for biodiversity prospecting and the long term survival of these resources along with the ipr protection developing countries have to develop suitable institutions and policies governing the use of their open access biological resources and enabling local communities to receive partial benefits of biodiversity conservation and prospecting

wind power externalities a meta analysis this study presents the first quantitative meta analysis of the non market valuation literature on the external effects associated with wind power production a data set of 60 observations drawn from 32 studies is constructed the relative economic values of different types of externalities as well as the impact of various methodological and sample characteristics on welfare estimates are examined the results indicate a significant effect of visual externalities on welfare estimates in both directions i e a positive effect of visual improvements and a negative effect of deteriorations this finding corresponds to predictions of the importance of visual impacts in the social science literature external effects of wind power on biodiversity mainly birds do not affect welfare estimates indirect externalities caused by conventional sources of electricity that can be avoided by wind power such as a the reduction of air pollution do neither have a significant impact on welfare measures methodologically we find substantial but inelastic income effects and for choice experiments clear evidence of sensitivity to scope from a policy point of view our results suggest that a policy mix combining a promotion of wind turbines with another green policy facilitates expansion of wind energy

how reliable are meta analyses for international benefit transfers meta analysis has increasingly been used to synthesise the environmental valuation literature but only a few test the use of these analyses for benefit transfer these are typically based on national studies only however meta analyses of valuation studies across countries are a potentially powerful tool for benefit transfer especially for environmental goods where the domestic literature is scarce we test the reliability of such international meta analytic transfers and find that even under conditions of homogeneity in valuation methods cultural and institutional conditions across countries and a meta analysis with large explanatory power the transfer errors could still be large further international meta analytic transfers do not on average perform better than simple value transfers averaging over domestic studies thus we question whether the use of meta analysis for practical benefit transfer achieves reliability gains justifying the increased effort however more meta analytic benefit transfer tests should be performed for other environmental goods and other countries before discarding international meta analysis as a tool for benefit transfer

sustainable development challenges to profession of agricultural economics fundamentally sustainable development is a notion of discipline disciplining our current consumption this sense of intergenerational responsibility is a new political principle a virtue that must now guide economic growth the industrial world has already used so much of the planet s ecological capital that the sustainability of future life is in doubt that can t continue brundtland page 5

a meta analysis of contingent valuation forest studies abstract forest ecosystems provide a variety of valuable goods and services this paper presents a meta analysis of forest studies using the contingent valuation cv method to value the provision of forest values around the world in this meta analysis we estimate the marginal value of different management programs that provide a variety of forest goods and services our results show that willingness to pay wtp estimates for forest management programs are sensitive to the program s objectives particularly when linked to the provision of recreational services other variables such as the type of forest location survey mode or the type of respondent were also found to significantly affect the wtp estimates

diagnosing insensitivity to scope in contingent valuation sensitivity to scope is considered a desirable property of contingent valuation studies and often treated as a necessary condition for validity we first provide an overview of scope insensitivity explanations put forth in the environmental valuation literature then we analyze data from a contingent valuation survey eliciting willingness to pay to prevent oil spills of four different magnitudes in arctic norway in the baseline analysis the scope inference is ambiguous there is only statistical difference in willingness to pay to avoid a very large versus small oil spill nok 1869 and nok 1086 respectively however further explorations show that several confounding factors suggested in the literature influence the scope inference the scope sensitivity improves when we control for subjective probabilities of amenity provision exclude respondents based on the debriefing questions take into consideration the sample sizes and impose diminishing marginal utility overall the analysis supports an emerging view in the contingent valuation literature suggesting that statistical scope insensitivity is not a sufficient reason for deeming a study invalid

meta analysis benefit transfer and methodological covariates implications for transfer error meta regression models in the valuation literature demonstrate that willingness to pay estimates vary according to methodological factors neither theory nor characteristics of policy sites dictate the treatment of associated covariates within benefit transfer however and the literature provides few insights into potential impacts of common empirical treatments this paper introduces a method to systematically characterize the impact of methodological variables on transfer error using a repeated leave one out convergent validity framework the analysis contrasts errors for a hypothetical ideal case in which correct methodological covariate treatments are known to the realistic case in which the correct treatment is unknown results indicate that the common assumption of mean values for methodological covariates leads to only a modest increase in mean transfer error relative to that found in the hypothetical ideal case

pollution control by options trading abstract for pollution control with imperfect information about aggregate abatement costs we propose a combination consisting of free permits and a menu of call options for additional permits with different striking prices by appropriately choosing permits and corresponding striking prices the regulator can approximate the marginal damage function arbitrarily well

choice modeling and tests of benefit transfer choice modelling cm is a stated preference technique that is increasingly being used to generate estimates of non market values in cm applications respondents to a survey are presented with several sets of options which contain common attributes but at varying levels and are asked to select their preferred alternative from each set the information provided by respondents choices is used to estimate marginal rates of substitution and hence estimates of value in this paper the results from three separate cm applications are presented estimates are made of the value of improving the quality of wetlands the first two applications focused on the gwydir wetlands in new south wales australia one survey was conducted in sydney a major urban centre and the second was conducted in moree a rural centre close to the gwydir wetlands the third survey which was also conducted in sydney focused on the macquarie marshes another wetland in new south wales an objective of the study was to test the suitability of using cm derived estimates for benefit transfer both across different populations and across different wetlands cm is potentially suited to benefit transfer because it is possible to allow for differences in environmental improvements between sites as well as differences in socio economic characteristics between respondent populations several tests aimed at determining the validity of transfers using cm across sites and populations are presented these include tests of the equality of models implicit prices and estimates of compensating surplus

the determinants of information value synthesizing some general results this paper identifies the determinants of information value and synthesizes some general results concerning their effects while some attributes of an information system exhibit a consistent directional effect on information value attributes of the decision setting and decision maker do not

public preferences for alternative electricity mixes in post fukushima japan abstract using representative household survey data from japan after the fukushima accident we estimate peoples willingness to pay wtp for renewable nuclear and fossil fuels in electricity generation we rely on random parameter econometric techniques to capture various degrees of heterogeneity between the respondents and use detailed regional information to assess how wtp varies with the distance to both the nearest nuclear power plant and to fukushima compared to fossil fuels we find a positive wtp for renewable and a negative wtp for nuclear fuels these effects in absolute terms increase with the proximity to fukushima

along the way back from the brink abstract an optimal control model of wildlife management is developed to analyze the transitory dynamics set forth by the reintroduction of animals that provide benefits but can also come into conflict with humans the shadow price of these resources can be positive or negative potentially creating a nonconvexity the conditions under which reintroduction is not desirable are determined and those characterizing the initiation of costly population control are investigated an application to deer management illustrates the relevance of the nonconvexity and the magnitude of losses stemming from delays in implementing optimal management the impact of distributional concerns on efficiency is discussed

harvesting and conserving a species when numbers are low population viability and gambler s ruin in bioeconomic models abstract in bioeconomic models of renewable resources population viability is either ignored entirely or the minimum viable population mvp is considered a crisp threshold below which a species is driven to extinction neither is consistent with ecological science the purpose in this paper is firstly to enhance ecological realism in economic models by incorporating insights regarding population viability from conservation biology we consider the effects of chance on optimal management and briefly discuss key results regarding population viability as derived by biologists second as a means to balance interests and morality we suggest a fuzzy compromise between the economist s and the biologist s preferred stock sizes

hydropower externalities a meta analysis this paper presents a meta analysis of existing research related to the economic valuation of the external effects of hydropower a database consisting of 81 observations derived from 29 studies valuing the non market impacts of hydropower electricity generation is constructed with the main aim to quantify and explain the economic values for positive and negative hydropower externalities different meta regression model specifications are used to test the robustness of significant determinants of non market values including different types of hydropower impacts the explanatory and predictive power of the estimated models is relatively high whilst controlling for sample and study characteristics we find significant evidence for public aversion towards deteriorations of landscape vegetation and wildlife caused by hydropower projects there is however only weak evidence of willingness to pay for mitigating these effects the main positive externality of hydropower generation the avoidance of greenhouse gas emission positively influences welfare estimates when combined with the share of hydropower in national energy production sensitivity to scope is detected but not linked to specific externalities or non market valuation methods

managing permit markets to stabilize prices the political economy of environmental policy favors the use of quantity based instruments over price based instruments e g tradable permits over green taxes at least in the united states with cost uncertainty however there are clear efficiency advantages to prices in cases where the marginal damages of emissions are relatively flat such as with greenhouse gases the question arises therefore of whether one can design flexible quantity policies that mimic the behavior of price policies namely stable permit prices and abatement costs we explore a number of quantity plus policies that replicate the behavior of a price policy through rules that adjust the effective permit cap for unexpectedly low or high costs they do so without necessitating any monetary exchanges between the government and the regulated firms which can be a significant political barrier to the use of price instruments

precision of dichotomous choice contingent valuation welfare measures some simulation results the purpose of this research is to examine the roles of individuals heterogeneous economic factors and model misspecification in dichotomous choice contingent valuation welfare measurement willingness to pay for an improvement of environmental quality is studied simulation results indicate that the precision of welfare estimates increases with individuals income levels and decreases with the price of the quality related good the dependence of the consumption of the quality related good on the environmental quality also affects the reliability of welfare estimates

returns from hay cultivation in fertilized low diversity and non fertilized high diversity grassland recent ecological experiments suggest that theinterannual stability of ecosystem productivitymay be determined by the diversity of organismspresent in the system we investigate whethersuch effects of biotic diversity on ecosystemstability may translate into economic valuesand possibly into an economic argument for themaintenance of biodiversity in managedhabitats applying a stochastic model fromfinancial economics to long term harvest datafrom a grassland ecosystem we examine thepotential insurance value of plant diversityon the stability of yields and economic returnsin a drought sensitive agricultural setting putative insurance premiums priced as putoptions on revenues from hay yield were higherfor fertilized low diversity grassland than forunfertilized species rich glassland from thisperspective the annual insurance value differential insurance premiums required tolock in specific rates of returns of diverseplant communities may amount to 3 50 to 6 00 per acre the results suggest thatincreased costs of risk in species poorfertilized grassland may affect the optimumlevel of fertilization making lower fertilizerinput and concomitantly higher plant communitydiversity more desirable

characterizing the effects of valuation methodology in function based benefits transfer abstract meta analyses have demonstrated that willingness to pay wtp estimates vary systematically according to methodological factors the benefits transfer literature provides little guidance with regard to the treatment of such effects transfers are typically conducted by ignoring such effects using ad hoc adjustments or otherwise suppressing information regarding the sensitivity of wtp to methodological attributes this paper illustrates a means to characterize methodological effects within benefits transfer based on an application of the common bootstrap drawing from meta analysis the approach characterizes the sampling distribution of wtp with respect to patterns of methodological variation present in underlying studies results provide a means to characterize the extent of variation associated with predefined groups of methodological attributes providing transparent information on the sensitivity of wtp not typically available in benefits transfer

is meta analysis a noah s ark for non market valuation this paper describes meta analytical methods as they have been applied to non market valuation research these studies have been used to review and synthesize literature and more recently in benefit transfer this second use imposes a higher standard on the consistency in economic concepts being summarized and in the resources included in a meta analysis to meet this need the paper proposes and illustrates a structural framework using a generalized method of moments estimator to estimate the parameters of a preference function with the benefits estimates usually encountered in meta analytic summaries

contingent valuation a practical alternative when prices aren t available a person may be willing to make an economic tradeoff to assure that a wilderness area or scenic resource is protected even if neither that person nor perhaps anyone else will actually visit this area this tradeoff is commonly labeled passive use value contingent valuation studies ask questions that help to reveal the monetary tradeoff each person would make concerning the value of goods or services such surveys are a practical alternative approach for eliciting the value of public goods including those with passive use considerations first i discuss the exxon valdez oil spill of march 1989 focusing on why it is important to measure monetary tradeoffs for goods where passive use considerations loom large although discussions of contingent valuation often focus on whether the method is sufficiently reliable for use in assessing natural resource damages in lawsuits it is important to remember that most estimates from contingent valuation studies are used in benefit cost assessments not natural resource damage assessments those working on benefit cost analysis have long recognized that goods and impacts that cannot be quantified are valued implicitly by giving them a limitless value when government regulations preclude certain activities or giving them a value of zero by leaving certain consequences out of the analysis contingent valuation offers a practical alternative for reducing the use of either of these extreme choices i put forward an affirmative case for contingent valuation and address a number of the concerns that have arisen

household willingness to pay for expanding fuel cell power generation in korea a view from co2 emissions reduction abstract the fuel cell fc is accepted as the state of the art instrument for reducing co2 emissions in the field of power generation in korea therefore the korean government has planned to expand fc power generation from 565 gwh in 2013 to 13 449 gwh by 2027 this article aims to assess the public value or acceptability of this expansion in terms of reducing co2 emissions to this end we derive the public s additional willingness to pay wtp for the expansion using a contingent valuation survey of 1000 korean households for the purpose of mitigating the response effect in eliciting their wtp and increasing statistical efficiency in analyzing the wtp data we employ a one and one half bounded dichotomous choice question format furthermore we use the spike model so as to model zero wtp responses the mean additional monthly wtp for the expansion is computed to be krw 1407 usd 1 37 per household expanding the value to the national population gives us krw 310 5 billion usd 304 4 million per year we can conclude that korean households are ready to shoulder some of the financial burden of expanding fc power generation to reduce co2 emissions

extending the sectoral coverage of an international emission trading scheme in a model inspired by the eu emissions trading scheme non cooperative countries allocate their emissions to internationally trading and non trading sectors each country is better off with trading than without and aggregate welfare is maximized with all sectors in the trading scheme we analyze the effects of extending the sectoral coverage of the trading scheme in a two country model with quadratic abatement costs if only the original trading sector is asymmetric between countries the welfare change is always positive and the same in both countries if the original and additional trading sectors are asymmetric one country might lose but there is an aggregate welfare gain if the original trading sector and the non trading sector are asymmetric both countries always gain

on biodiversity access intellectual property rights and conservation abstract recent international agreements such as the convention on biological diversity and the trade related intellectual property rights have called for increased mutual transfer of biodiversity and biotechnology between poor and rich countries these agreements also call for the protection of intellectual property rights ipr on biotechnology transferors in the receiving countries this paper examines the biodiversity conservation implications of providing physical access and ipr protection to foreign consumers of biodiversity an integrated model of optimal resource extinction and shared resource harvesting game is presented the model results show that as foreign and indigenous users compete for the same open access resource optimal extinction may occur as a noncooperative equilibrium under certain bioeconomic conditions extinction may be prevented by forging successful cooperation between consumers initiating a joint harvesting process depending upon the model parameters even under cooperation increased patent protection and physical access either promotes the conservation of biodiversity or enhances its physical exploitation patent protection and resource access must therefore be developed carefully by biodiversity rich countries to successfully balance their domestic conservation and socioeconomic goals

the impact of auction choice on revenue in treasury bill auctions an empirical evaluation abstract i evaluate whether uniform price or discriminatory auctions are revenue superior for selling treasury bills to this end i apply two structural econometric models hortacsu and mcadams 2010 and fevrier et al 2002 to a dataset on polish zero coupon bonds my secondary aim is to analyze mutual inconsistencies in prediction from these models i find that both agree on the revenue superiority of discriminatory auctions by between 0 01 and 1 5 the models predictions are contradictory in only 7 of auctions the large scale agreement of two vastly different models gives confidence that the conclusions on polish data are robust to varying many of the underlying economic and econometric assumptions and not likely just a modeling artifact

marginal valuation of charismatic species implications for conservation most contingent valuation studies focus on total willingness to pay wtp as a measure of welfare change for policy involving species preservation however it is important to distinguish between the benefits of preventing a species from going extinct and the benefits of preserving numbers above the minimum viable population mvp level once mvp is exceeded marginal wtp becomes relevant these propositions are illustrated for the case of one charismatic species whose management is much debated minke whales in the northeast atlantic ocean it is shown that for a given estimate of total preservation value strict conservation and extinction can both be optimal this finding highlights the importance of collecting marginal values in contingent valuation surveys

valuation and management of tropical forests implications of uncertainty and irreversibility this paper develops a framework for the valuation and management of tropical forests that reflects their ecological and economic characteristics the analysis demonstrates the importance of modeling the feasible use patterns and the information structure in tropical forest management decisions the model predicts that cases exist where the foresighted management of forests leads to more preservation than the traditional expected value approach an application in thailand provides evidence that such cases occur in relevant ranges of benefit flows the model focuses tropical forest management on assessments of sustainability and feasible sequences in light of uncertainty and information flows

sovereign debt auctions uniform or discriminatory abstract many financial assets especially government bonds are issued by an auction an important feature of the design is the auction pricing mechanism uniform versus discriminatory theoretical papers do not provide a definite answer regarding the dominance of one type of auction over the other we investigate the revealed preferences of the issuers by surveying the sovereign issuers that conduct auctions we find that the majority of the issuers countries in our sample use a discriminatory auction mechanism for issuing government debt we use a multinomial logit procedure and discriminatory analysis to investigate the mechanism choice it was interesting to find that market oriented economies and those that practice common law tend to use a uniform method while economies who are less market oriented and practice civil law tend to use discriminatory price auctions

ordering effects in nested top down and bottom up contingent valuation designs abstract within a contingent valuation cv survey ordering effects are defined where responses to a given question vary in a theoretically unanticipated manner according to the positioning of that question relative to others in the survey instrument this paper employs a split sample cv design to investigate the potential for such ordering effects upon stated willingness to pay for nested goods in one top down design values are first elicited for protecting the whole of an endangered area after which values for a part sub area are elicited a second bottom up treatment reverses the order of valuation tasks with the part scheme valued prior to the whole results show that whole and part valuation responses are logically ordered and determined by a consistent set of factors irrespective of question order however variance to question order was observed in both the part and whole valuations the correspondence of these results to standard and non standard preference theories is explored and the difficulties and practical issues concerning valuing nested goods are highlighted

finding sensitivity to scope in nonmarket valuation summary data limitations frequently prevent using actual consumer behavior in determining natural resource values so stated preference methods are used whether value estimates show sensitivity to the scope of resource valued is a key test for their validity which several studies fail developing a correlated panel mixed logit model of households water quality valuations in california we show that false negatives in scope tests can result when individual preference variation and correlation are ignored and split sample comparisons are used monte carlo simulations further demonstrate potentially prevalent false rejections of scope sensitivity even when within subject comparisons of willingness to pay portray strong scope sensitivity copyright 2013 john wiley sons ltd

using non market valuation to inform the choice between permits and fees in environmental regulation the purpose of this short note is to open an exploration regarding the use of non market valuation to help guide the selection of economically efficient pollution control instruments as long as non market valuation techniques can correctly estimate the slope of the marginal benefit of abatement curve this information along with engineering cost estimates of the unit costs or slope of the marginal abatement cost will provide useful information to policy makers in choosing between fees and permits an illustrative review of the literature suggests that both stated and revealed preference methods have estimated slopes of marginal benefit functions for reducing several pollutants to investigate the efficiency of permits versus fees an illustrative review of corresponding marginal abatement costs is also made for air pollutants affecting visibility the slope of the marginal benefit curve is far greater than the slope of the marginal abatement costs suggesting permits as the efficient instrument for nitrates in groundwater used for drinking the marginal benefit curve is flatter than the rather steep marginal abatement cost suggesting fees taxes would be a more efficient economic instrument we hope this note stimulates more emphasis in non market valuation on estimating the slope of the marginal benefit function to enhance environmental economists ability to make policy recommendations regarding the choice of pollution instruments for specific pollutants

timber harvest adjacency economies hunting species protection and old growth value seeking the dynamic optimum abstract forests have the potential to provide ecosystem services timber mature growth aesthetics and wildlife and endangered species protection forest managers are faced with complex ecosystem management decisions due to competing and complementary social values and differential interactions of these social values with timber production as a result management strategies can have dramatic aggregate and intertemporal welfare implications this paper portrays the trade offs and externalities in choosing or changing the forest management objective and the resulting rankings of management policies in addition the paper analyzes the role of economies of scale in harvest area where larger harvest areas generate average cost savings in harvesting and reseeding thereby promoting more intensive harvesting at the expense of environmental benefits

the case for diminishing marginal existence values abstract this study addresses the debate over sensitivity of existence values measured by contingent valuation to scope tests we reconcile much of the debate within one theoretical model if marginal wtp for existence goods is diminishing then a study that tested for sensitivity to scope over a range for which marginal wtp is high would be more likely to detect sensitivity to scope than a study that focused on a range for which marginal wtp is much lower an empirical model demonstrates this point for existence value of remote wilderness parks these results have significant implications for future contingent valuation work

the role of economics in global management of whales re forming or re founding iwc abstract the global management of whale species identified as an economic mixed good is addressed by means of economic theory of bargaining and institution making i will analyse i why it is important to take into account explicitly both consumptive use and non use values within international conventions on global mixed goods ii the role and nature of institutions dealing with global issues iii the role of bargaining between conflicting interests as a focal feature of the institution making process and iv the role of economic thinking in international conventions co operative and non co operative solutions are discussed and instruments aimed at achieving co operative bargaining analysed the study has both positive and normative implications with insights on social welfare enhancing institutional reforms although the study is broad yet special focus is given to the international whaling commission iwc this paper concludes that we should make economic theory operational within the realm of global institutions on the basis of the bargaining model the conclusion is that iwc should necessarily be re founded or at least re formed changing the convention from whaling to a whale it is suggested that the possibility of introducing compensatory side payments into the bargaining arena in order to increase social welfare and enforceability with respect to a ban scenario be investigated ethical implications of monetary compensations are considered in parallel with economic efficiency the limits and potentialities of economics and economic instruments are also tested globally with respect to the whale and other environmental issues

property rights externalities and resource degradation locating the tragedy abstract resource degradation in the third world is largely driven by the demands of farm households for fuelwood and land for agriculture since resources are often controlled through indigenous systems of property the tragedy of the commons has been used to explain resource degradation as a result private property is suggested as a solution to resource degradation a dynamic model capable of examining household incentives for resource use under private and common property is developed results of the model reject the conventional wisdom that gives rise to the presumed optimality of private individual property in natural resources and the correlated indictment of group management regimes

a note on the extinction of renewable resources abstract this paper presents two sets of conditions under which a sole owner of a renewable resource stock who maximizes a nonlinear benefit function would find it more profitable to harvest the stock to extinction than follow a continuous harvesting strategy when the minimum viable resource stock is positive extinction is optimal as long as the initial resource stock is sufficiently small regardless of the discount rate when the minimum viable resource stock is zero and the discount rate exceeds the growth potential of the species extinction is optimal for sufficiently small initial stocks

material interests moral reputation and crowding out species protection on private land we consider how the reputation of being socially responsible works as an effective source of motivation in protecting a public good such as endangered species this paper investigates the mechanism design for endangered species protection on private land under asymmetric information about reputation and land quality we examine optimal monetary transfer by designing an efficient mechanism which takes into account the crowding out effect of monetary rewards on socially responsible behavior we find landowners who have good reputation contribute more than the optimum level landowners with poor reputation sacrifices information rent rather they buy reputation

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

consumer demand for green power and energy efficiency abstract this article examines reported willingness to pay for electric utility investments in renewable energy and energy efficiency resources using the results of deliberative polls conducted by electric utilities in texas 1 age education and salary tend to affect reported willingness to pay for utility investments in these resources intensive exposure to information about energy resource issues led to an increase in the number of respondents interested in paying a modest premium to support investments in both renewable energy resources and energy efficiency however average reported premiums actually declined following the polls as very high outlier responses moved to more reasonable values following the polls these results support the contention that informed dialogue about energy alternatives will result in broader interest in providing a modest level of support for these resources

using labels to investigate scope effects in stated preference methods insufficient sensitivity to scope variations in the scale of the environmental good on offer remains a major criticism of stated preference methods and many studies fail a scope test of some sort across a range of existing explanations for insensitivity to scope commodity mis specification embedding warm glows there seems to exist no clear conclusion on how to deal with the problem this paper provides an alternative explanation for insufficient sensitivity to scope based on re definition of the determinants of value for environmental goods within an attributes based choice model in the proposed framework respondents willingness to pay need depend not only on physical characteristics of a good but may also depend on the label under which the environmental good is sold in the hypothetical market to investigate this problem a choice experiment study of biodiversity was conducted we find that controlling for the effects of a label in this case national park designation leads to significant increase in the scope sensitivity of welfare measures

brazilian policies that encourage deforestation in the amazon this paper shows that general tax policies special tax incentives the rules of land allocation and the agricultural credit system all accelerate deforestation in the amazon these policies increase the size of land holdings and reduce the chances of the poor to become farmers the following are the key provisions i the virtual exemption of agricultural income from income taxation makes agriculture a tax shelter ii rules of public land allocation provide incentives for deforestation because the rules used in determining the security of a claim and its land area encourage land clearing iii the progressive land tax contains provisions that encourage the conversion of forest to crop land or pasture iv the tax credit scheme aimed toward corporate livestock ranches subsidizes inefficient ranches established on cleared forest land and v subsidized credit is available for sudam approved ranches

threatened species as public goods and public bads an application to wild predators in sweden this paper discusses pareto efficient allocations of an environmental commodity which is both a public good and a public bad with an application to the scandinavian problem of conserving wild predators that are killing semi domesticated reindeer the paper begins by briefly outlining this conflict this is followed by a theoretical analysis employing a diagrammatic tool called the kolm triangle which is an analogue of an edgeworth box in an economy with a public good bargaining pareto improving reallocations and the shape of the pareto set are discussed using a simple model where one of the agents is involountarily contributing to a public good the paper concludes with an analysis of income loss compensations and incentives for illegal hunting of predators

higher price lower costs minimum prices in the eu emissions trading scheme this paper examines the introduction of a price floor in an emissions trading system ets when some emissions are regulated outside of the ets we theoretically characterize the conditions under which a price floor enhances welfare using a numerical simulation model of the european union we find that moderate minimum prices in the eu ets can reduce the costs of eu climate policy by up to thirty percent we also find that due to tax interaction effects the optimal minimum price in the eu ets should be about four times higher than the average marginal abatement cost in non ets sectors this article is protected by copyright all rights reserved

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

combining price and quantity controls under partitioned environmental regulation abstract this paper analyzes hybrid emissions trading systems etss under partitioned environmental regulation when firms abatement costs and future emissions are uncertain we show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions price bounds are more efficient than abatement bounds as they also use information on firms abatement technologies while abatement bounds can only address emission uncertainty using a numerical stochastic optimization model with equilibrium constraints for the european carbon market we find that introducing hybrid policies in eu ets reduces expected excess abatement costs of achieving targeted emission reductions under eu climate policy by up to 89 we also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex post cost reductions

non market valuation in integrated assessment modeling the benefits of water right retirement abstract the impact of resource management on natural capital value depends on processes that affect resource stocks over space and time we develop an integrated assessment modeling framework that links econometric estimates of non market benefits from a resource stock to a spatially explicit model of resource dynamics results from a dichotomous choice contingent valuation survey are used to estimate a marginal willingness to pay function for groundwater which has no market we use the model to measure the economic benefits to agricultural producers of a program that pays for water right retirement under the baseline scenario without water right retirement the benefits from groundwater stocks in the study region decline in value by 3 6 million over 15 years because of groundwater depletion water right retirement leads to groundwater benefits that are 0 55 million higher than in the baseline after 15 years but benefits vary greatly over space comparing this to an explicit program cost of 45 million suggests that other social benefits from groundwater stocks must exist to justify the program from a benefit cost perspective valuing the economic benefits from increasing natural capital stocks can inform policy and provide insight into the value of management in resource and environmental systems

combining price and quantity controls to mitigate global climate change abstract uncertainty about compliance costs causes otherwise equivalent price and quantity controls to behave differently and leads to divergent welfare consequences although most of the debate on global climate change policy has focused on quantity controls due to their political appeal this paper argues that price controls are more efficient simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy an alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices using an initial distribution of tradeable permits to set a quantitative target but allowing additional permits to be purchased at a fixed trigger price even sub optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity controls for example a 50 trigger price per ton of carbon converts the 3 trillion expected loss associated with a simple 1990 emission target to a 150 billion gain these results suggest that a hybrid policy is an attractive alternative to either a pure price or quantity system

decision structuring to alleviate embedding in environmental valuation abstract embedding is the widely observed phenomenon that a good is assigned a higher value if evaluated on its own rather than as part of a more inclusive set embedding is considered a serious problem affecting the quality of many environmental management and health risk policy judgments this paper presents the results of an experiment involving of a structured small group approach for conducting environmental policy evaluations it focuses on eliciting problem specific values and discussion among participants about the pros and cons of multiple project alternatives in the context of tradeoffs between fisheries production and electricity generation from dams study results show a significant reduction in embedding which is viewed as an improvement in the quality of the preference judgments compared with a standard contingent valuation cv approach

contingent valuation controversies and evidence contingent valuation cv has become one of the most widely used non market valuation techniques cv s prominence is due to its flexibility and ability to estimate total value including passive use value its use and the inclusion of passive use value in benefit cost analyses and environ mental litigation are the subject of a contentious debate this paper discusses key areas of the debate over cv and the validity of passive use value we conclude that many of the alleged problems with cv can be resolved by careful study design and implementation we further conclude that claims that empirical cv findings are theoretically inconsistent are not generally supported by the literature the debate over cv however has clarified several key issues related to nonmarket valuation and can provide useful guidance both to cv practitioners and the users of cv results

economic valuation of biodiversity a comparative study abstract in recent years an intensive debate on the economic valuation of biodiversity has entered the environmental economics literature the present paper seeks to offer first a critical review of key concepts that are essential for a proper understanding of such evaluation issues particular attention is given here to various monetary valuation approaches and to comparative i e meta analytical methods from the perspective of conservation and sustainable use of biodiversity several illustrative examples are presented in order to highlight the usefulness of the various approaches discussed next an attempt is made to infer general findings and lessons from past applied research by means of meta analysis in this context a multi dimensional technique originating from the field of artificial intelligence is deployed it allows us to identify the most important variables responsible for changes in economic estimates of biodiversity

adequate responsiveness to scope in contingent valuation the standard test for scope sensitivity in contingent valuation studies determines whether the response to changes in scope is statistically significant it does not address whether the magnitude of response is appropriate given the specified changes in scope we examine contingent valuation studies that implemented scope tests to determine what they imply about the adequacy of response to scope we find that in the vast majority of studies the magnitude of response cannot be assessed only three studies permit such an assessment samples and hollyer 1990 diamond et al 1993 and chapman et al 2009 the first two papers find that responses to their surveys did not vary adequately with scope the third study passed the standard scope test but we show that the magnitude of response in this study is inadequate by straightforward methods of assessment and cannot be explained by diminishing marginal utility or substitution more research is needed on this issue including wider application of adding up tests on incremental parts as well as the development of other methods that permit an assessment of the magnitude of response or other tests of rationality

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 validity of environmental benefits transfer further empirical testing this paper provides further empirical evidence of the validity of environmental benefits transfer based on cv studies by expanding the analysis to include control factors which have not been accounted for in previous studies these factors refer to differences in respondent attitudes traditional population characteristics were taken into account but these variables do not explain why respondents from the same socio economic group may still hold different beliefs norms or values and hence have different attitudes and consequently state different wtp amounts the test results are mixed the function transfer approach is valid in one case but is rejected in the 3 other cases investigated in this paper we provide further evidence that in the case of statistically valid benefits transfer the function approach results in a more robust benefits transfer than the unit value approach we also show that the equality of coefficient estimates is a necessary but insufficient condition for valid benefit function transfer and discuss the implications for previous and future validity testing

scope effects in contingent valuation does the assumed statistical distribution of wtp matter abstract economic theory assumes that willingness to pay wtp increases with the quantity of the consumed good this implies that there should be a scope effect in contingent valuation studies however in previous issues of ecological economics several authors criticized the contingent valuation cv method for the absence of such effect or its inadequacy in this paper we contribute to this ongoing debate by proposing to systematically apply several wtp statistical distribution assumptions to test for scope effects and check its plausibility following whitehead s 2016 recent recommendations we perform this approach using data from a swiss case study assessing the wtp for an increased surface of forest reserves we find that both mean wtp and scope effects are sensitive to the statistical distribution assumption regarding plausibility scope elasticities provide mixed result and also depend on the assumed statistical distribution of wtp for small sample size cv studies a non parametric analysis a spike model or an open ended format can thus be better suited to reveal scope effects than the classical parametric dichotomous choice analysis we thus recommend to systematically apply several statistical distribution assumptions of wtp to test for scope effects and their plausibility

contingent valuation theoretical advances and empirical tests since the noaa panel beyond a simple cost effectiveness role and for many policy issues where all the goods or impacts at issue are not readily priced in the market the relevance of economics depends to a large degree on the ability to use contingent valuation cv and other closely related stated preference approaches the government s use of cv as a tool to place a monetary value on damages from the exxon valdez oil spill brought forth strong industry objections to the use of cv in response the national oceanic and atmospheric administration noaa one of the trustee agencies in the exxon valdez case commissioned a blue ribbon panel chaired by kenneth arrow and robert solow to review the use of cv in natural resource damage assessment proceedings the panel s report arrow et al and transmittal letter to the noaa general counsel concluded cv studies can produce estimates reliable enough to be the starting point for a judicial or administrative determination of nat

ex post efficient permit markets a detailed analysis this paper provides a detailed analysis of ex post efficient permit markets after a short review of institutional designs that can achieve ex post efficiency under uncertainty and asymmetric information we analyze the effects of an ex post efficient regulation on the expected costs of the regulated firms on their investment behavior and on the incentives for strategic behavior on imperfectly competitive permit markets also we inquire about the budget effects of the regulation our results show that ex post efficient permit markets have considerable benefits beside the direct increase in expected social welfare

downward sloping demand for environmental amenities and international compensation elephant conservation and strategic culling conventional wisdom holds that monetary compensation for positive transboundary externalities will promote conservation of resource amenities we demonstrate that in the case of elephant conservation international transfers may also result in strategic behavior by host countries with adverse implications for global welfare and in situ stocks

on conservation of renewable resources with stock dependent return and nonconcave production textabstractthis paper analyzes conservation and extinction of renewable resources when the production function is nonconcave and the return function depends on consumption and the resource stock the paper focuses on the efficiency of global conservation a safe standard of conservation and extinction which outcome obtains depends on the marginal rate of substitution between investment and the stock in addition to the discount factor and the marginal productivity of the resource conservation may be efficient even if the discounted intrinsic growth rate of the resource is less than 1 journal of economic literature classification numbers d90 q20

the ghost of extinction preservation values and minimum viable population in wildlife models abstract the inclusion of a minimum viable population in bioeconomic modeling creates at least two complications that are not resolved by using a modified logistic growth function the first complication can be dealt with by choosing a different depensational growth function the second complication relates to the inclusion of the in situ benefits of wildlife into the analysis knowledge about the magnitude of the in situ benefits provides no guide for policy about conservation management simply knowing that people are willing to pay a large amount each year to protect a species says nothing about whether one should manage habitat to protect or enhance the species numbers unless the species is in imminent danger of extinction if willingness to pay is to be a guide it needs to be better tied to population numbers especially the minimum viable population

do contingent valuation estimates pass a scope test a meta analysis abstract this paper considers the scope test proposed to judge the internal consistency of contingent valuation estimates the test is shown to be quite sensitive to the maintained hypotheses required to derive fairly precise expectations for the properties of wtp functions and therefore a different approach may be needed in gauging the reliability of cv this paper describes an approach that relies on a weight of the evidence criterion and uses meta analysis to develop a systematic appraisal of what the economic values of changes in amenity resources are the approach is illustrated for the case of estimating people s willingness to pay for improving or maintaining visibility at the national parks

the impact of the bird flu on public willingness to pay for the protection of migratory birds abstract in this paper we present the results of a unique time series analysis of contingent values and models for migratory bird protection based on an identical contingent valuation cv survey carried out over a three year time period since the first bird flu outbreak in 2003 although there exists no scientific evidence for a direct relationship migratory birds are believed to play an important role in spreading the bird flu virus worldwide the time series analysis allows us to test the temporal stability of stated preferences for migratory bird protection and at the same time examine indirectly the possible impact of increased media attention and public awareness levels regarding the bird flu we test the impact of the bird flu on public willingness to pay wtp for migratory bird protection in the final 2005 survey whilst accounting for procedural variance introduced by sequencing and question ordering effects but we are unable to demonstrate a direct negative relationship a novelty of the study presented here is that respondents in the cv surveys are given the opportunity to pay an annual money amount or a one time off lump sum annual wtp values appear to be significantly higher than one time off wtp values suggesting a negative implicit discount rate self selection bias is an important reason for the observed differences we find that respondents who agree to pay annually differ significantly from respondents who wish to pay a lump sum in terms of their underlying preferences and motivations towards migratory bird protection

earmarking conservation further inquiry on scope effects in stated preference methods applied to nature based tourism abstract the way people assign value to nature conservation policies has important implications for management choices economic valuation surveys are affected by individual behavioural patterns that are not exhaustively explained by traditional sources of bias such as embedding flagship species fixed budget commodity misspecification and warm glows through a contingent valuation study of alpine wildlife we use an external scope test to evaluate the difference in willingness to pay among tourists for conservation policies targeted either to the ibex alone or to the four ungulates populating the gran paradiso national park in northwest italy ibex red deer roe deer chamois we find that park users are willing to contribute significantly more to policies protecting one of the four ungulates than all four of them a result that we argue should be ascribed to pure aversion to less specific policy objectives i e to a preference for punctual earmarking of resources devoted to conservation

meta analytic benefit transfer of outdoor recreation economic values testing out of sample convergent validity a benefit transfer approach to recreationeconomic valuation using meta analysis isexamined since the meta regression modeltakes into account some of the study specificeffects on willingness to pay wtp estimates benefit transfer using meta analysis couldyield a valid wtp estimate of unstudiedrecreation resources the convergent validityof the meta analytic benefit transfer is testedusing out of sample original studies from theu s the analyses are performed usingpercentage difference paired t test regression and correlation tests the testsreveal mixed results on convergence betweenestimated wtp using meta analytic benefittransfer function btf and out of sampleoriginal wtp values there is a fairly highpercentage difference between the estimated andoriginal wtp values 80 88 and the meandifferences are statistically significant asshown by paired t tests however correlationand regression results consistently showsignificant positive relationships betweennational btf estimated and original wtp valuesindicating some level of convergence theresults show that the national btf outperformthe regional btf indicating a potential of thenational btf for recreation benefit transferwhen a first best primary valuation study isnot affordable

part whole bias in contingent valuation will scope effects be detected with inexpensive survey methods the purpose of this paper is to test for scope effects with the contingent valuation method we use data from a telephone survey focusing on water quality improvements in the albemarle and pamlico sounds in north carolina we find that the willingness to pay estimates are sensitive to the scope of the policy these results suggest that the use of inexpensive survey methods may not be the cause of the failure to detect scope effects in some recent contingent valuation studies

measuring the effects of price controls using mixed complementarity models abstract government involvement in managing domestic prices of energy and other commodities is a major issue in emerging economies we examine one aspect of the problem price controls when governments set or cap prices we show how a mixed complementarity problem mcp formulation can be used to model and assess the impacts of price controls in multi sector economic equilibrium models both the gains from deregulation and the consequences of imposing new or altering existing regulations can thus be measured we present three distinct models that capture different price control situations firms have to meet demand and receive an implicit subsidy demand rationing occurs due to an associated price control constraint and subsidies limit demand rationing we present an approach to measuring the effects on the equilibrium in the first case and the levels of disequilibrium induced by price controls in the other cases we also show how to determine the most efficient allocation program when a government engages in rationing we illustrate the cases described by these models using markets that have or had price controls

information and the concept of option value this paper examines the arrow fisher henry concept of option value and analyzes its properties including its relationship to the value of information and the effects of increasing uncertainty about the future consequences of irreversible development it is shown that this option value is distinct from but bounded by the value of information in the overall decision problem also it is distinct from a concept of option value that appears in b s bernanke quart j econom 98 85 106 1983 however when there is a continuum of development levels rather than a binary choice between full development and no development some of these conclusions need to be modified

environmental value transfer state of the art and future prospects abstract the main objectives of the paper are to 1 give an overview of the state of the art of environmental value transfer 2 discuss its prospects and potential role in cba as a decision support tool and 3 provide further guidelines for proper use and application environmental value or benefit transfer is a technique in which the results of studies on monetary environmental valuation are applied to new policy contexts the technique is controversial not least because of academic and political reservations over the usefulness and technical feasibility of economic valuation tools to demonstrate the importance of environmental values in project or programme appraisals testing of environmental value transfer so far has been unable to validate the practice taking into account the conditions set out in the literature for valid and reliable value transfer most transfers appear to result in substantial transfer errors this paper discusses why and addresses the question of which factors may have been overlooked it is argued that the problem is much more fundamental than previously acknowledged strict guidelines in terms of quantitative adjustment mechanisms to valid value transfer are meaningless if the more fundamental issue of differences in the very nature of the values elicited is not addressed at the same time

on visible choice sets and scope sensitivity abstract in this paper we argue that the burgeoning empirical debate over scope sensitivity within contingent valuation studies is fundamentally incomplete in that it has neglected a systematic examination of certain effects of study design upon observed scope sensitivity in particular we highlight the fact that in certain study designs the choice set initially offered or visible to respondents is changed in a stepwise manner as they progress through a valuation exercise while other designs involve advance disclosure regarding the full extent of the final visible choice set prior to any choices or values being elicited the issue of changes in the visible choice set is alluded to by smith j environ econom manage 22 1 71 who identifies this as a primary challenge to kahneman and knetsch s j environ econom manage 22 1 57 well known experimental results kahneman and knetsch contend that it seems highly implausible that this minor procedural change would significantly alter results p 61 but do not test this assertion we present experimental and field tests of the impact upon contingent values of varying the visible choice set through stepwise and advance disclosure these dimensions of design are interacted with changes in the order in which nested goods are presented bottom up versus top down when a stepwise disclosure procedure is adopted the observed scope sensitivity is substantially and significantly affected by the order in which goods are presented but such procedural variance is not observed within advance disclosure designs conjectures regarding the origin and implications of such findings are presented

a carbon price floor in the reformed eu ets design matters abstract despite the reform of the european emissions trading system eu ets discussions about complementing it with a carbon price floor cpf are ongoing this paper analyzes the effect of a european cpf in the reformed eu ets using a hotelling model of the eu ets amended by the market stability reserve msr and the cancellation mechanism two cpf designs are compared 1 a buyback program and 2 a top up tax the buyback program sets a minimum price for the allowances from the implementation year onwards after the announcement firms anticipate the cpf which immediately increases the carbon price to the discounted cpf level therefore firms emit less and bank more allowances leading to more intake into the msr and more cancellation of allowances the top up tax imposes a tax on emissions which enhances the market price of allowances to the cpf level from the implementation year onwards firms increase their short run emissions in anticipation of the upcoming tax only after the implementation year firms start to lower their emissions thus the effect on aggregate cancellation is ambiguous despite being equivalent in a static setting the design choice for the cpf matters in a dynamic context such as the eu ets

not just minor forest products the economic rationale for the consumption of wild food plants by subsistence farmers abstract non timber forest products ntfps make an important contribution to the livelihood of the households who gather and consume them in particular the consumption of ntfps allows gatherers to live with lower amounts of cash than if they had to buy in the market what they can obtain from the forest for free understanding the economic value of non marketed ntfps helps determine the true income of the gatherers and the amount of extra cash that they would need if they could no longer gather ntfps it also helps ascertain the true value of the standing forest leading to more rational decisions about its alternative uses yet the ntfps that are not marketed are often ignored when estimates are made of the economic importance of ntfps to rural populations this article briefly describes five methods for estimating the value of non marketed wild edible plants it then compares two of these methods with data from one month of fieldwork in two pwo karen villages in thung yai naresuan wildlife sanctuary in western thailand the article concludes that wild food plants remain a preferred alternative to commercial food crops because gathering wild food plants is a much more efficient use of time than engaging in the market economy in order to purchase commercial food crops

sensitivity of energy system investments to policy regulation changes too many too fast abstract in this paper we argue that the interaction of energy policy regulations in the european electricity sector may be described by the slow fast class of dynamical systems such systems may exhibit drastic changes in their dynamics known as bifurcations one important being the so called blue sky catastrophe once reaching such a state the slow system becomes unresponsive to the changes in the fast system for the energy policy nexus this translates into the energy system becoming unresponsive to policy interventions leading to a freeze in the system dynamics application of this result allows us to argue that caution is needed when updating economic policies to achieve a faster transition towards a low carbon energy supply structure to avoid this risk the policy design should be aimed at long term incentive structures with less frequent but more consistent interventions

efficiency in pollution control in the short and long runs a system of rental emission permits efficiency in pollution control in the short and long runs a system of rental emission permits author s robert a collinge and wallace e oates source the canadian journal of economics revue canadienne d economique vol 15 no 2 may 1982 pp 346 354 published by blackwell publishing on behalf of the canadian economics association stable url http www jstor org stable 134787 accessed 05 05 2008 21 07

the marginal cost of species preservation the northern spotted owl abstract because species survival is not certain the decision to save a species is not an all or nothing choice but rather a marginal one the appropriate unit for both benefit and cost functions is the likelihood of survival and the appropriate question is how certain we want to be of species survival the intensity of the species preservation debate is also fired by strong equity concerns we illustrate these points for the case of the northern spotted owl by constructing a marginal cost curve for its survival and by disaggregating welfare loss by region and by market level

do stated preference methods stand the test of time a test of the stability of contingent values and models for health risks when facing an extreme event abstract this paper focuses on the temporal stability of dichotomous choice dc contingent values and models and the implication of time related aspects for benefits transfer as a viable valuation method from a practical point of view time plays an important role in benefits transfer results are used from studies often carried out years ago and the obvious question is to what extent the estimated values and models stand the test of time in the case of value function transfer this implies testing the robustness of the estimated coefficient estimates over time the novelty of the temporal stability work presented here is that two identical dc contingent valuation cv studies of the health risks associated with bathing water quality were carried out before and during extreme weather conditions causing the closure of bathing locations for public health reasons differences in contingent values and models before and during the extreme event are tested the extreme event causes the seasonal good in question to become temporarily scarcer and marginal wtp is therefore expected to be higher during the extreme event than before but not that underlying preferences have changed hence basically two things are tested the effect of time on stated preferences for a seasonal good and the effect of the extreme event on these preferences wtp values before and during the event appear to be robust also when accounting for substitution effects the results before and during the extreme event remain transferable when accounting for theoretically expected factors in a simple multivariate transfer model however when introducing additional and contextual ad hoc factors in the model the estimated models and their random components become significantly different and hence not transferable suggesting that unobserved preferences may not have been randomly distributed across the two surveys after all

banking on extinction endangered species and speculation many wildlife commodities such as tiger bones bear bladders ivory and rhino horn have been stockpiled in large quantities by speculators who expect that future price increases justify forgoing the interest income associated with current sales when supply from private stores competes with supply from wild populations in nature and when speculators are able to collude it may be optimal to coordinate on an extinction strategy we analyse the behaviour of a speculator who has access to a large initial store and finds that it is optimal to deter poachers entry either by depressing prices carefully timing own supply or by depressing wild stocks which strategy maximizes profits critically depends on the initial wildlife stock and initial speculative stores we apply the model to the case of black rhino conservation and conclude it is likely that banking on extinction is profitable if current speculators are able to collude contrary to conventional wisdom we also find that extinction is favoured by such factors as low discount rates or high growth rates

preference uncertainty in non market valuation a fuzzy approach in this article we consider uncertain preferences for non market goods but we move away from a probabilistic representation of uncertainty and propose the use of fuzzy contingent valuation we assume that a decision maker never fully knows her own utility function and we treat utility as a fuzzy number the methodology is illustrated using data on forest valuation in sweden fuzzy contingent valuation provides estimates of resource value in the form of a fuzzy number and includes estimates obtained using a standard probabilistic approach