the expansion of modern agriculture and global biodiversity decline an integrated assessment the world is banking on a major increase in food production if the dietary needs and food preferences of an increasing and increasingly rich population are to be met this requires the further expansion of modern agriculture but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity ecologists have shown that biodiversity loss results in lower plant productivity while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields and sometimes lower mean yields in this paper we consider the macro economic consequences of the continued expansion of particular forms of intensive modern agriculture with a focus on how the loss of biodiversity affects food production we employ a quantitative structurally estimated model of the global economy which jointly determines economic growth population and food demand agricultural innovations and land conversion we show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion

sustainability as a fair bequest an evaluation challenge abstract in contrast to conventional approaches the conceptualisation of sustainability as fair bequest makes it possible to consider a finite time horizon valuation is necessary to determine whether the bequest package that is passed on from one generation to the next is fair acknowledging the merits as well as the limitations of economic price theory this paper differentiates between three classes of valuables the essential the useful and the unique it is argued that a fair bequest package should contain items from each of the classes because the three classes are incommensurable fairness of the bequest cannot be expressed by a single figure like a non declining total value of the package we then discuss which methods are appropriate for describing a bequest package with respect to its fairness

the relationship between resilience and sustainability of ecological economic systems resilience as a descriptive concept gives insight into the dynamic properties of an ecological economic system sustainability as a normative concept captures basic ideas of intergenerational justice when human well being depends on natural capital and services thus resilience and sustainability are independent concepts in this paper we discuss the relationship between resilience and sustainability of ecological economic systems we use a simple dynamic model where two natural capital stocks provide ecosystem services that are complements for human well being to illustrate different possible cases of the relationship between resilience and sustainability and to identify the conditions under which each of those will hold a resilience of the system is necessary but not sufficient for sustainability b resilience of the system is sufficient but not necessary for sustainability c resilience of the system is neither necessary nor sufficient for sustainability and d resilience is both necessary and sufficient for sustainability we conclude that more criteria than just resilience have to be taken into account when designing policies for the sustainable development of ecological economic systems and vice versa the property of resilience should not be confused with the positive normative connotations of sustainability c 2011 elsevier b v all rights reserved

the role of individual financial contributions in the formation of entrepreneurial teams abstract this paper studies how entrepreneurs limited in how much they are able to contribute to a joint business organize in partnerships and how this process is impacted by the frictions common for team production it demonstrates that moral hazard and reliance on simple equity sharing contracts create incentives for the entrepreneurs making large contributions to team up together even if the production technology exhibits decreasing returns to scale to total investment the paper formalizes this novel mechanism in a matching model and illustrates that the model s predictions regarding co owners financial contributions and ownership shares are consistent with the empirical evidence from the kauffman firm survey data

the economic theory of agrarian institutions introduction alternative approaches to the theory of institutions in economic development pranab bardhan rational peasants efficient institutions and a theory of rural organization methodological remarks for development economics joseph e stiglitz part 1 land and labour theories of sharecropping nirvikar singh a comparison of principal agent and bargaining solutions the case of tenancy contracts clive bell contracts with eviction in infinitely repeated principal agent relationships bhaskar dutta et al production relations in semi arid african agriculture hans binswanger et al part 2 credit and interlinked transactions rural credit markets the structure of interest rates exploitation and efficiency kaushik basu credit and agrarian class structure mukesh eswaran and ashok kotwal credit rationing tenancy productivity and the dynamics of inequality avishay braverman and joseph e stiglitz on choice among creditors and bonded labour contracts t n srinivasan some aspects of linked product and credit market contracts among risk neutral agents clive bell and t n srinivasan a note on interlinked rural economic arrangements pranab bardhan interlinkages and the pattern of competition debraj ray and kunal sengupta part 3 marketing and insurance agricultural institutions for insurance and stabilization david m newbery peasants risk aversion and the choice of marketing intermediaries and contracts a bargaining theory of equilibrium marketing contracts pinhas zusman part 4 co operatives technology and the state agricultural producer co operatives louis putterman institutional analysis of credit co operatives avishay braverman and j luis guasch agrarian structure technological innovations and the state alain de janvry et al

a framework for scaling and framing policy problems in sustainability abstract it is argued that a necessary but lacking component of our approach in seeking policy responses to sustainability issues is some repeatable means whereby the relative magnitude and characteristics of these various policy problems faced in a given context can be analysed and described to this end a simple and tentative framework is constructed based on the definition of the key attributes which shape policy problems pertaining to environmental change these are spatial scale of cause and effect magnitude timing and longevity of possible impacts reversibility mensurability complexity and connectivity nature of cause s relevance to the given polity tractability availability and acceptability of means public concern and existence of goals these attributes inform a general taxonomy of micro meso and macro problems the attributes and the taxonomy are described with supporting examples to illustrate possible application of the framework it is discussed briefly in the contexts of operationalising the precautionary principle and policy instrument choice it is concluded that the framework can help focus debate and operationalise vague principles introduce relativity into the notion of sustainability and make policy choice more efficient

evolutionary theories in environmental and resource economics approaches and applications recent advances in evolutionary theory have important implications for environmental economics a short overview is offered of evolutionarythinking in economics subsequently major concepts and approaches inevolutionary biology and evolutionary economics are presented andcompared attention is devoted among others to darwinian selection punctuated equilibrium sorting mechanisms lamarckian evolution coevolution and self organization basic features of evolution such assustained change irreversible change unpredictability qualitativechange and disequilibrium are examined it is argued that there are anumber of fundamental differences as well as similarities betweenbiological and economic evolution next some general implications ofevolutionary thinking for environmental economics are outlined this isfollowed by a more detailed examination of potential uses ofevolutionary theories in specific areas of environmental economics including sustainability and long run development theories technologyand environment ecosystem management and resilience spatial evolutionand environmental processes and design of environmental policy

trends in the development of ecological economics from the late 1980s to the early 2000s abstract as the contributions to ecological economics are very diverse recent years have seen some discussion on both how to delimit the field and in which direction it should develop the intention with this paper is to contribute to the discussion by outlining important trends in the development of the field from the late 1980s to the early 2000s the study is inspired by other studies in the sociology and history of science in particular by the theoretical framework regarding scientific fields as reputational organizations which draws attention to both cognitive and social aspects of the formation of a field the basis for the paper is a combination of literature studies interviews with key researchers in the field and participant observations the paper outlines the characteristic cognitive features of ecological economics at the time of the birth of the field it is then described how the development in ecological economics was influenced by broader social factors during the following years and how the field was shaped by the inflow and outflow of different groups of researchers the emergence of different research programmes is outlined as is the organizational development finally the characteristics of ecological economics are summarized and the future prospects are briefly assessed

the contribution of the mining sector to sustainability in developing countries abstract does the mining sector contribute to or detract from the achievement of sustainable development in developing countries sustainability is defined as development that will give future generations opportunities equal to or greater than those of the present generation treating gross income per capita as an imperfect proxy of these opportunities a test is made to investigate whether increases in mining gdp have led to long run increases in gnp per capita despite the exhaustibility of mineral deposits this is a more encompassing criterion than the conventional hartwick criterion which establishes necessary conditions for the achievement of a related definition of sustainability a vector autoregression model var is estimated for each of 19 non opec developing countries with large mining sectors using the impulse response functions the long run multiplier of mining income on gnp is calculated the sustainability criterion developed in the paper requires the multiplier to exceed a minimum value this test is carried out under alternative assumptions regarding future mining income

more than total economic value how to combine economic valuation of biodiversity with ecological resilience abstract the assessment of total economic value has become a pragmatic and popular approach in nature valuation yet criticisms have been raised one major point of critique is that total economic value bases the monetary value of ecosystems purely on the flow of human benefits of services of ecosystems and consequently ignores questions of sustainable use of natural capital per se this paper explains why total economic value by itself is in principle an inadequate concept to guide sustainable use of ecosystems and gives an overview of essential ecological theory that needs to be taken into account in addition to total economic value to fully include ecosystem sustainability the paper concludes with a framework for combining ecological theory with economic valuation the key elements here are theoretical ecological insights about ecosystem resilience and portfolio theory which offers an economic perspective on investment in biodiversity portfolio theory puts total economic value in a framework where investment in biodiversity is expanded to cover functional diversity and mobile link species in order to maintain ecosystem resilience and so fosters sustainable use of ecosystems

environmental externalities in traditional agriculture and the impact of trade liberalization the case of ghana abstract this paper provides a framework for the evaluation of trade policies that explicitly considers the effects of such policies on the environmental resources biomass in doing this we estimate the effects of biomass as a factor of agricultural production and test the hypothesis that farmers efficiently exploit biomass a resource held in common property the main findings are i biomass is an important factor of production in ghanian agriculture ii the biomass resource is exploited beyond the socially optimal level iii a deepening of trade liberalization is likely to induce further losses of biomass and deforestation and iv national income is likely to fall in response to further trade liberalization

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

systemic crises in hierarchical ecological economies human beings are both the slaves and the masters of the ecosystems in which they live this paper examines the interrelationship be tween economic decision making hierarchies and ecological hierarchies conditions under which dis continuous changes can occur are presented both for top down and bottom up causes appropriate institutional arrangements for minimizing ecological disruption are analyzed and depend on the nature of the relationship between the economic and eco logical hierarchies in some cases this will involve self managed economic units operating at the ap propriate level of the ecological hierarchy jel q20

resource use institutions and sustainability a tale of two pacific island cultures this paper examines two pacific island cultures easter island and tikopia and the relationship between natural resource systems human made capital population growth and institutional change easter island followed a preindustrial society pattern of overshoot and collapse however tikopia evolved cultural practices leading to zero population growth and sustainable resource use using a modified lotka volterra predator prey model we find 1 investment in human made capital does not necessarily eliminate the boom and bust cycles of economic activity and population observed in many past societies and 2 institutional adaptation and resource conservation can be critical in achieving population stability

the function of authority in transaction cost economics abstract this paper questions the transaction cost characterization of observed authority relations as efficient governance structures various inadequacies in the transaction cost account of work organization and the limits of firm size are traced to its neglect of the possibility that authority may be abused opportunistically this exemplifies a more general propensity in the transaction cost literature that of explaining economic organization in functionalist terms with little attention to the causal mechanisms through which efficient governance structures might actually arise three such mechanisms are considered but none is found to provide an adequate rationale for the imputation of efficiency to observed structures

resilience in the dynamics of economy environment systems the ecological concept of resilience has begun to inform analysis of change in economy environment systems the linkages between resilience and the stability of dynamical systems are discussed along with its role in understanding of the evolution of such systems particular linkages discussed include those between resilience biodiversity and the sustainability of alternative states recent developments in modelling the resilience of joint economy environment systems suggest the advantages of analysing change in the system as a markov process the transition probabilities between states offering a natural measure of the resilience of the system in such states it is argued that this emergent property of the collaboration between ecology and economics has far reaching implications for the way we think about model and manage the environmental sustainability of economic development

a complex systems approach to the value of ecological resources a theory of value sits at the core of every school of economic thought and directs the allocation of resources to competing uses ecological resources complicate the modem neoclassical approach to determining value due to their complex nature considerable non market values and the difficulty in assigning property rights application of the market model through economic valuation only provides analytical solutions based on virtual markets and neither the demand nor supply side techniques of valuation can adequately consider the complex set of biophysical and ecological relations that lead to the provision of ecosystem goods and services this paper sets out a conceptual framework for a complex systems approach to the value of ecological resources this approach is based on there being both an intrinsic quality of ecological resources and a subjective evaluation by the consumer both elements are necessary for economic value this conceptual framework points the way towards a theory of value that incorporates both elements so has implications for principles by which ecological resources can be allocated c 2005 elsevier b v all rights reserved

negative externalities and welfare improving preference changes when the over consumption of open access resources and congestible public goods generate negative externalities and social welfare losses many individuals and environmental advocacy organizations offer as an alternative nongovernmental solution the adoption of new ecology sustaining preferences this paper shows that exogenously inducing a change in preferences and the adoption of new externality internalizing preferences which increase an individual s marginal rate of substitution between a private good and a good whose consumption imposes external costs on others not only reduces the aggregate output of the negative externality but also produces an economic state that is socially superior to the initial state because it is based on both the initial and new preferences the social superiority welfare criterion makes possible meaningful welfare comparisons of economic states generated by preference changes a computational general equilibrium model is then used to simulate preference changes and to calculate the resulting allocative and welfare effects the computer simulations reveal that important factors in the attainment of a socially superior state include i the particular characteristics of an individual s negative externality reaction function ii the magnitude of the preference change and iii the number of individuals changing preferences

on the life cycle metaphor where ecology and economics diverge abstract there is an attractive analogy between nature and industry based on the similarity of natural functions and certain industrial activities for instance animals ingest eat and digest food finally there are metabolic wastes firms are analogous to organisms in several respects insofar as they consume material resources process digest them and produce output products and excrete wastes firms like organisms also compete with each other for resources curiously enough one of the apparent differences between natural and man made systems is actually not one like the industrial system the natural system does not recycle everything however there are at least four real and important differences between the biosphere ecology and the technosphere economy first there is no primary producer in the economic system analogous to what photosynthesizers play in the biosphere inputs to the economy are mostly natural resources capital services and labor second in the economic system output is a heterogeneous mix of manufactured products and services labor in economics is an input but not an output the economic system recycles much less than the ecological system but utilizes a far greater suite of elements in the biosphere there are no products as such growth is tantamount to accumulation of embodied solar exergy in the form of cellulose sugars lipids and proteins the biosphere produces only wastes and more of itself plus dead matter third in the biosphere there are no markets there is no medium of exchange like money and there is nothing analogous to paid labor exchanges are involuntary i e by predation parasitism or theft fourth evolution in nature is driven by differentiation by random mutations of the genome and darwinian selection based on reproductive success in economics differentiation is based on discovery invention and innovation by intelligent economic agents and selection is based on competition at the individual or firm level either way the economic system is not closely analogous to an ecosystem attempts to use ecological concepts in an economic context are often misleading and unjustified the paper discusses the implications of the eco eco mismatch for resource accounting and life cycle analysis

ecological thresholds a survey abstract the existence of ecological discontinuities and thresholds has been recognised by ecological economics as a key feature to take into account in the study of environment economy interactions this paper reviews some theoretical developments and empirical studies dealing with ecological phenomena involving non linear dynamics the literature about this issue reveals that there is abundant evidence of discontinuities and threshold effects as the consequence of human perturbations on ecological systems however due to the complexities involved the predictive capacity of ecology is limited and large uncertainties still remain

is the growth of small firms constrained by internal finance this paper examines the long standing theory that the growth of small firms is often constrained by the quantity of internal finance under plausible assumptions when financing constraints are binding an additional dollar of internal finance should generate slightly more than an additional dollar of growth in assets this quantitative prediction should not hold for the relatively small number of firms which access external equity we test these predictions with a panel of more than 1 600 small firms and find that the growth of most firms is constrained by internal finance our results have implications for several different research literatures including models of firm growth

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

global population growth technology and malthusian constraints a quantitative growth theoretic perspective we structurally estimate a two sector schumpeterian growth model with endogenous population and finite land reserves to study the long run evolution of global population technological progress and the demand for food the estimated model closely replicates trajectories for world population gdp sectoral productivity growth and crop land area from 1960 to 2010 projections from 2010 onwards show a slowdown of technological progress and because it is a key determinant of fertility costs significant population growth by 2100 global population reaches 12 4 billion and agricultural production doubles but the land constraint does not bind because of capital investment and technological progress

threshold effects and incentives for the conservation of biodiversity biological diversity is a central component of the stock of natural capital on which all economic development is based other things being equal loss of biologically diversity implies loss of development potential and its conservation through sustainable use or outright protection implies the protection of that potential one characteristics of biodiversity loss of especial importance is that biodiversity loss more than any other current environmental problem is associated with ecological threshold effects the paper explores the implication of this characteristics for the properties of a biodiversity conservation strategy

critical natural capital revisited ecological resilience and sustainable development abstract the maintenance of critical natural capital is an important objective of sustainable development critical natural capital represents a multidimensional concept as it mirrors the different frameworks of various scientific disciplines and social groups in valuing nature this article revisits the concept of critical natural capital and examines its relation to the concept of ecological resilience i propose that ecological resilience can help a great deal in specifying the ecological criticality of specific renewable parts of the natural capital more specifically i suggest that the degree of ecological resilience is inversely related to the degree of threat ecosystems are prone to the concept of ecological resilience may complement other measures such as integrity or vulnerability in estimating the degree of threat specific ecosystems are exposed to the empirical estimates of ecological resilience add a further criterion in order to build a comprehensive and clear conception of critical natural capital

globalization local ecosystems and the rural poor summary in this paper we draw upon models from ecology and new institutional economics to examine the various mechanisms through which globalization can lead to loss in resilience of ecosystems and thus increase the vulnerability of poor people who depend on it to illustrate ecological dynamics we examine a semi arid savanna ecosystem that is characterized by nonlinearities and multiple steady states we discuss how traditional knowledge and institutions affect resource use patterns and resilience of such an ecosystem in the absence of trade then we examine the effects of trade liberalization and international technology transfers on institutional and ecological dynamics and consequently on poverty

externality or sustainability economics abstract in an effort to develop sustainability economics baumgartner and quaas 2010 neglect the central concept of environmental economics environmental externality this note proposes a possible connection between the concepts of environmental externality and sustainability in addition attention is asked for other aspects of sustainability economics namely the distinction weak strong sustainability spatial sustainability and sustainable trade distinctive sustainability policy and the ideas of early sustainability economists i argue that both sustainability and externalities reflect a systems perspective and propose that effective sustainability solutions require that more attention is given to system feedbacks notably other regarding preferences and social interactions and energy and environmental rebound the case of climate change and policy is used to illustrate particular statements as a conclusion a list of 20 insights and suggestions for research is offered

the first deal the division of founder equity in new ventures we examine the trade off between efficiency and equality within the context of entrepreneurial founding teams using a formal theory where founders may have preferences over relative outcomes we derive predictions about the antecedents and consequences of dividing equity equally amongst all founders using proprietary survey data we empirically test the predictions our central finding is that teams that split equity equally are less likely to raise funds from outside investors the relationship appears not to be causal but instead driven by selection effects across heterogeneous teams with varying degrees of inequality aversion

modeling physical quantities of food and nutrients consumed from aggregate data with an application to finland anticipating the impact of changes in economic incentives on dietary quality and nutritional health requires knowledge of how physical quantities of food consumed respond to price and income variations a problem arises however because physical quantities are 1 not consistent aggregates in demand models and 2 not measured at final retail level in national statistics the article develops a solution by establishing explicitly the theoretical link between composite demand and physical quantities from which a novel empirical approach to the estimation of nutrient elasticities is derived it is applied to finnish aggregate data from the national accounts and food balance sheets over the 1975 2006 period and the results are used to assess the potential effectiveness of several incentive based nutritional policy instruments jel classifications i10 q11 q18

spatial externalities in agriculture empirical analysis statistical identification and policy implications summary spatial externalities can affect economic welfare and landscape pattern by linking farm returns on adjoining parcels of land while policy can be informed by research that documents spatial externalities statistically quantifying the presence of externalities from landscape pattern is insufficient for policy guidance unless the underlying cause of the externality can be identified as positive or negative this article provides a springboard for empirical research by examining the underlying structure social environmental interactions and statistical identification strategies for the analysis and the quantification of agricultural spatial externalities that are derived from observations of landscape change the potential for original policy treatments of agricultural spatial externalities in development and environment outcomes is highlighted

risk bearing and entrepreneurship abstract in the knightian theory of entrepreneurship entrepreneurs provide insurance to workers by paying fixed wages and bear all the risk of production this paper endogenizes entrepreneurial risk by allowing for optimal insurance contracts as well as occupational self selection moral hazard prevents full insurance increases in an agent s wealth then entail increases in risk borne thus even under decreasing risk aversion there are robust instances in which workers are wealthier than entrepreneurs this empirically implausible result suggests that risk based explanations for entrepreneurship are inadequate

institutions and economic growth an historical introduction abstract in this essay the interdependence of political and economic institutions is examined against premises in neoclassical theories of economies which maintain that population and savings are the principal determinants of economic growth that institutions matter in the development of economies is the difference in assumptions i examine i look at the institutional frameworks that preceded adoption of the united states constitution and the northwest ordinance in early america i then trace the precedents of these american institutions to the evolution of common law in england where interests unconcerned with the crown coalesced to form competing political units i then contrast england s institutional development with the comparatively centralized enforcement mechanisms of spain to examine the hypothesis that institutional differences produce economic consequences

national accounts and environmental resources in the paper optimal growth theory is used to derive the appropriate definition of the net national product concept when there are environmental resources and environmental damage to take into account the basic conclusions are that conventional defined np should be corrected by deducting environmental damage and adding the value of the net change of all resources

sorting through search and matching models in economics toward understanding assortative matching this is a self contained introduction to research on search and matching we first explore the nontransferable and perfectly transferable utility matching paradigms and then a unifying imperfectly transferable utility matching model motivated by some unrealistic predictions of frictionless matching we flesh out the foundational economics of search theory we then revisit the original matching paradigms with search frictions we finally allow informational frictions that often arise such as in college student sorting

incentives and the structure of teams abstract this paper studies the relationship between moral hazard and the matching structure of teams we show that team incentive problems may generate monotone matching predictions in the absence of complementarities in the production technology second we analyze how complementarity in the underlying technology affects the matching predictions arising due to moral hazard we find that i even when the production technology is strongly complementary the incentive problem may lead to formation of negatively sorted teams ii as the degree of complementarity increases the optimal matching structure may switch from positive to negative solely due to the need to provide incentives

towards an ecological economics of sustainability abstract persistent disagreement both as to the interpretation to be given to sustainability and as to the relation between ecological and economic sustainability has hindered the development of an ecological economics of sustainable resource use this paper identifies the main concepts of sustainability deriving from the two disciplines in order to explore the difference implied by an ecological approach to the problem it is argued that present economic and ecological approaches are largely disjoint and that they address basically different phenomena by combining the efficiency requirements of what is usually thought of as economic sustainability with the stability requirements of an ecological approach it is shown that an intertemporally efficient allocation of resources that satisfies the conditions for constant levels of consumption is not necessary to assure ecological sustainability ecological sustainability requires that the allocation of economic resources should not result in the instability of the economy environment system as a whole

recovering the shadow value of nutrients this article investigates the shadow values of twenty eight different nutrients it links the unit price of foods to the shadow values of nutrients by building on a utility theoretic model first proposed by gorman maximum entropy principles are then used to reason consistently about the values of the parameters of interest the resulting estimates are discussed and analyzed

valuing environmental functions tropical wetlands recent studies have suggested that tropical wetland systems may have a crucial economic role to play in development the following paper provides an overview of these benefits using the general framework of cost benefit analysis as the methodological approach to assessing wetland values an analysis of trade offs between conserving or converting tropical wetlands demonstrates that taking into account the opportunity cost of wetland loss leads to a lower level of conversion than would otherwise be the case finally the paper discusses the extensions and limitations of the production function approach as applied to valuing nonmarketed wetland benefits

optimal diversity increasing returns versus recombinant innovation abstract choices regarding diversity play an important role in economics and innovation management but often remain implicit once made explicit the objectives of efficiency and diversity are usually posed as in conflict as efficiency relates positively and diversity negatively to various increasing returns to scale in markets such a perspective however neglects the benefits of diversity in terms of realizing system improvements through recombinant innovation or spillovers the latter implies a contribution of diversity to long term efficiency dominant economic approaches that address diversity such as option value and real options theories regard benefits of diversity as exogenous this paper proposes a simple model of variable endogenous diversity to analyse the optimal balance between increasing returns to scale and recombinant innovation it is discussed under which conditions one of four solutions is optimal complete specialization regardless of which option complete specialization in one specific option symmetric diversity perfect balance and asymmetric diversity the results give rise to a number of policy insights

the effects of a fat tax on french households purchases a nutritional approach this article assesses the effects of a fat tax on the nutrients purchased by french households across different income groups this is done by making a preliminary estimation of price elasticities using a complete demand system on household scanner data and by calculating nutrient elasticities using estimated price elasticities we find that a fat tax has small and ambiguous effects on nutrients purchased by french households and a slight effect on body weight in the short run with a greater effect in the long run such a tax generates substantial tax revenue but is highly regressive

double sided moral hazard and the nature of share contracts contractual arrangements involving revenue profit sharing are often based on fairly simple often linear rules in addition in many contexts these contracts are not finely adjusted to the particular circumstances of individual agents or markets nor do they vary over time to the extent current theories based on optimal contracting suggest they should we develop a simple model of such revenue or profit sharing arrangements based on double sided moral hazard and show that this model can account for many of these stylized facts more specifically the model shows that linear contracts can be optimal and that benefits from customizing terms can in some cases be quite limited if not zero

ecological economics and sustainable governance of the oceans abstract this paper is an introduction and synthesis of the papers that appear in this special issue devoted to the sustainable governance of the oceans the special issue contains papers on various aspects of the problem including the ecological and economic importance of the oceans the problems facing the oceans from an ecological economics perspective the links between science and policy the rationale for sustainable ocean governance and examples of sustainable institutions and governance structures we developed the lisbon principles of sustainable governance responsibility scale matching precaution adaptive management full cost allocation and participation as a core set of guidelines for sustainable ocean governance we then describe the major problems facing the oceans in terms of how the principles are violated and evaluate some suggested institutions in terms of how the principles are incorporated

partnerships versus corporations moral hazard sorting and ownership structure team production takes advantage of technological complementarities but comes with the cost of free ridership when workers differ in skills the choice of sorting pattern may be associated with a nontrivial trade off between exploiting the technological complementarities and minimizing the cost of free ridership this paper demonstrates that whether such a trade off arises depends i on how the power of incentives required for effort provision varies with workers types and ii on whether the workers are organized for production in partnerships or in corporations these results have implications for how production is organized in different industries in partnerships or in corporations jel d21 d82 g32 m12 m54 production in self managed teams and use of group incentives within corporations have become increasingly widespread over the last few decades e g see osterman 2000 and references therein increased reliance on group production can be attributed to the presence of technological complementarities between workers skills this in turn has implications for sorting of workers of different skills into teams namely expected output is maximized when high skilled workers are teamed with other high skilled workers at the same time team production comes with the problem of free riding recent studies such as franco mitchell and vereshchagina 2011 and kaya and vereshchagina 2013 have pointed out that the cost of alleviating this free rider problem may depend on how workers of different skills are sorted into teams therefore the sorting of workers may impact the total surplus from team production in at least two ways by taking advantage of technological complementarities and or by minimizing the cost of alleviating the freerider problem in this paper we illustrate that a nontrivial trade off between these two forces may arise and that this trade off has implications for how production is organized in partnerships or in corporations for this purpose we develop a model of joint production with two sided moral hazard in which workers of heterogeneous productivity may organize in partnerships or work for a corporation owned by an entrepreneur the technology available to

valuation of tropical rainforests philosophical and practical issues in the use of contingent valuation abstract this paper explores the possibility of using a large scale multi country contingent valuation study for making decisions concerning global resources in the specific context of valuing a large set of tropical rainforests before considering the practical issues involved in implementing such a study the paper addresses philosophical issues related to the use of contingent valuation including the role of passive use motives such as altruism and the role of information the implications of empirically based criticisms which argue that contingent valuation results are unreliable are also considered the main portion of the paper sketches the practical difficulties likely to be encountered in actually implementing a large contingent valuation study in multiple countries which seeks to value a common set of tropical rainforests some key study design choices are discussed

earmarking and the political support of fat taxes a fat and a healthy good provide immediate gratification and cause health costs or benefits in the long run which are misperceived additionally the fat good healthy good increases decreases health care costs by increasing decreasing the probability of suffering from a chronic disease in the future individuals differ in income and in their degree of misperceptions concerning the health effects of the consumption of fat and of healthy goods the level of the fat tax is determined through majority voting individuals vote according to their misperceived utility function consequently excessive fat consumption is not due to a self control problem but due to information deficiencies or cognitive inability to process information a fraction of the fat tax proceeds is earmarked to reduce health insurance premiums while the remaining fraction finances a subsidy on the healthy good this earmarking rule is determined at a constitutional stage to maximize utilitarian or rawlsian welfare anticipating the induced political equilibrium we show that the fat tax in the political equilibrium is always lower than the utilitarian fat tax this is no longer necessarily true with a rawlsian objective the determination of the optimal earmarking rule is quite complex even in the utilitarian case it is not just used to boost political support for the fat tax instead it may involve a tradeoff between the fat tax and the healthy good subsidy

united states demand for food and nutrition in the twentieth century the relationships between diet and health are once again the center of debate over farm and food policy targeted food aid programsfood stamps aid to families with dependent children and the women infants and children program can create incentives for food purchases and consumption that are not consistent with those created by programs to support farm prices and incomes marketing orders target prices and deficiency payments the sugar program and farm price supports the result could be that food aid recipients spend more on food but are presented with incentives to eat unhealthy diets due to policy induced price distortions understanding the economic forces behind food and nutrient con

problems in valuing the benefits of biodiversity protection this paper considers two problems in valuing the benefits of biodiversity protection these are firstly that preferences for biodiversity protection may be lexicographic rather than utilitarian the more individuals for whom this is true the less is cost benefit analysis validated as a means of decision making for biodiversity protection since lexicographic preferences are incompatible with the kaldor hicks compensation test secondly people may be poorly informed about the meaning of biodiversity complicating the use of contingent valuation as a means of measuring preservation benefits this paper first discusses the meaning of biodiversity and trends in diversity over time we offer some empirical evidence with regard to lexicographic preferences consider the implications of having poorly informed consumers and then report the results of a contingent valuation study of biodiversity protection with varying levels of information we find that willingness to pay for biodiversity protection increases with the level of information provided

profit sharing and the role of professional partnerships when it is hard to assess service quality firms will suboptimally hire low ability workers we show that organizing as a profit sharing partnership can alleviate these problems our theory explains the relative scarcity of partnerships outside of professional service industries such as law accounting medicine investment banking architecture advertising and consulting it also sheds light on features of partnerships such as up or out promotion systems the use of noncompete clauses and recent trends in professional service industries

sustainability with uncertain future preferences a feature of the sustainability problem is that the preferences of future generations are uncertain in this paper we put forward a fairness based definition of sustainability that takes this uncertainty into account we analyze the implications of this definition in the context of a model of project evaluation we show that our definition encompasses the concepts of non declining welfare and of weak and strong sustainability furthermore we show that preference uncertainty has a substantial influence on the implications of sustainability

evolutionary policies for sustainable development adaptive flexibility and risk minimising abstract an evolutionary perspective on policies to foster sustainable development is presented it is argued that policies suggested by the traditional economic theory of environmental policy can stimulate unsustainable socio economic structures and patterns in addition they are unable to remove undesired locked in systems and technologies drawing on evolutionary thinking characterised by diversity selection innovation path dependence and bounded rationality an alternative partly complementary theory of environmental policy is suggested specific attention is given to the role of strategies that are aimed at increasing diversity and adaptive flexibility and at reducing risk

efficiency in partnership structures abstract consider an economy where agents differ in production skills and abilities and are free to form production coalitions or partnerships with each other farrell and scotchmer 1988 showed that if partners are restricted to equal output sharing in equilibrium the partnerships are inefficiently small we elaborate on another possible source of inefficiency which is due to composition rather than size under the equal sharing constraint high ability agents form partnerships with agents of similar ability levels yet mixing of ability levels may be socially efficient we further investigate whether relaxing the equal sharing constraint corrects the inefficiency of equilibrium

trust law sustainability and responsible action abstract the problem of managing for sustainability is marked by the need to make decisions on behalf of others and by the uncertainties that attend such decisions however the economic literature on sustainability has paid scant attention to how decisions on behalf of others might differ from decisions on behalf of oneself and when risk has been modeled explicitly the expected utility hypothesis has generally been used a generation acts sustainably if the expected value of the next generation s utility is not less than the present s this paper investigates how we think about responsibly acting on another s behalf by looking to the united states law of trusts because in important respects the current generation views its responsibility to the future as a trust relationship trust law illuminates responsible decision making under both risk and uncertainty even under conditions of risk more conservative action than would be suggested by the expected utility hypothesis is warranted because it emphasizes preservation of trust principal and disavows profit maximization trust doctrine indicates that special caution should be exercised in conditions of uncertainty finally resource economic concepts of strong sustainability the precautionary principle and the safe minimum standard of conservation are interpreted according to trust principles

alternative approaches to economic environmental interactions abstract the key questions raised by recent developments in resource and environmental economics have been what useful economic functions does the environment provide and how are these functions affected by the process of economic environmental interaction this paper distinguishes between two different formal approaches to answering these questions the more conventional approach which is concerned with the optimal allocation of economically valuable exhaustible resources and an alternative analysis that considers the trade off between on the one hand environmental quality and on the other resource depletion and waste generation by the economic process to illustrate and extend the latter approach a model is constructed to show how this trade off might lead to continuously declining environmental quality and a future ecological constraint society must therefore optimally allocate output between consumption and services to improve the environment and choose between increased capital accumulation and environmental degradation although strict application of such a model may be limited it has wider implications for the role of technological change and the value of the environment in any system experiencing deteriorating environmental quality

the evolution of preferences why sovereign preferences may not lead to sustainable policies and what to do about it abstract the conventional economic paradigm assumes that tastes and preferences are exogenous to the economic system and that the economic problem consists of optimally satisfying those preferences tastes and preferences usually do not change rapidly and in the short term this assumption makes sense sustainability is an inherently long term problem and in the long run it does not make sense to assume tastes and preferences are fixed and given if preferences are expected to change over time and under the influence of education advertising changing cultural assumptions etc the old assumption of consumer sovereignty is not adequate different criteria of optimality are needed how preferences change how they relate to the goal of sustainability and how they can or should be actively influenced to satisfy the new criteria needs to be determined ecological economics has emphasized the three rank ordered goals of ecological sustainability fair distribution and allocative efficiency this paper examines how preferences evolve and change over time and the implications of this for developing policies that meet these three goals in democratic societies

global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture we study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level we use a two sector schumpeterian model of growth in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population agriculture demands land as an input itself treated as a scarce form of capital in our model both population and sectoral technological progress are endogenously determined and key technological parameters of the model are structurally estimated using 1960 2010 data on world gdp population cropland and technological progress introducing random shocks to the evolution of total factor productivity in agriculture we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages and that it significantly affects both optimal consumption and population trajectories

sustainability economics where do we stand abstract environmental economics which is a branch of resource economics the environment as a scarce resource is essentially about market failures the costs of pollution and pollution abatement and the economics of regulation sustainability economics includes the problem of maintaining economic growth while reducing pollution and or its impacts with special attention to the linked problems of energy supply not to mention the supply other exhaustible resources climate change and most urgently fossil fuel consumption there is a need for integration of resource and environmental economics under a new rubric sustainability economics

preference falsification policy continuity and collective conservatism through a model that distinguishes between privately held and publicly declared preferences and between private and public beliefs this paper explains why a society might c ling to its past choices all four variables are endogenous to the mo del following the introduction of a measure of collective conservati sm the paper turns to the determinants and consequences of feedback from society s choices to its members private beliefs and preference s the theory is applied to the persistence of india s caste system t o explain why the lowest castes have been among the system s most com mitted supporters copyright 1987 by royal economic society

the new institutional economics and development theory a brief critical assessment abstract in this paper we discuss strengths and weaknesses of transaction cost and imperfect information approaches to the economic theory of institutions particularly with reference to problems relevant to economic development

the shallow or the deep ecological economics movement ecological economics and its policy recommendations have become overwhelmed by economic valuation shadow pricing sustainability measures and squeezing nature into the commodity boxes of goods services and capital in order to make it part of mainstream economic financial and banking discourses there are deeper concerns which touch upon the understanding of humanity in its various social psychological political and ethical facets the relationship with nature proposed by the ecological economics movement has the potential to be far reaching however this is not the picture portrayed by surveying the amassed body of articles from this journal or by many of those claiming affiliation a shallow movement allied to a business as usual politics and economy has become dominant and imposes its preoccupation with mainstream economic concepts and values if instead ecological economists choose a path deep into the world of interdisciplinary endeavour they will need to be prepared to transform themselves and society the implications go far beyond the pragmatic use of magic numbers to convince politicians and the public that ecology still has something relevant to say in the 21st century author s abstract

investment and bilateral insurance abstract private information may limit insurance possibilities when two agents get together to pool idiosyncratic risk however if there is capital accumulation bilateral insurance possibilities may improve because misreporting distorts investment we show that if one of the pareto weights is sufficiently large that agent does not have incentives to misreport this implies that under some conditions the full information allocation is incentive compatible when agents have equal pareto weights in the long run either one of the agents goes to immiseration or both agents lifetime utilities are approximately equal the second case is only possible with capital accumulation

historical roots for ecological economics biophysical versus allocative approaches abstract a number of economists today are aware that the results of their science are more or less at variance with concrete fact and are alive to the necessity of perfecting it they go wrong rather in their choice of means to that end they try obstinately to get from their science alone the materials they know are needed for a closer approximation to fact whereas they should resort to other sciences and go into them thoroughly not just incidentally for their bearing on the given economic problem until economic science is much farther advanced economic principles are less important to the economists than the reciprocal bearings of the results of economics and the results of the other social sciences many economists are paying no attention to such interrelations for mastery of them is a long and fatiguing task requiring an extensive knowledge of facts whereas anyone with a little imagination a pen and a few reams of paper can relieve himself of a chat on principles pareto 1935 para 2022

resilience weather and dynamic adjustments in agroecosystems the case of wheat yield in england the paper presents an investigation of agroecosystem dynamics with an application to wheat yield data in england over the period 1885 2012 the analysis relies on a threshold quantile autoregressive model the model allows for lag effects to vary across quantiles of the distribution as well as with the values taken by the lagged variables the analysis documents the dynamics and persistence of yield adjustments to shocks the estimates indicate the presence of dynamic instability in the lower quantile of the distribution the analysis shows that after controlling for the role of technological trend wheat yield exhibits resilience to adverse weather shocks

sustainable development and social welfare abstract sustainable development is a normative concept which involves trade offs among social ecological and economic objectives and is required to sustain the integrity of the overall system this is usefully formalized in terms of a social welfare function which is based on an aggregate of individual preferences and as a prerequisite of intergenerational equity and overall system integrity on a set of sustainability constraints a sustainability based social value function is proposed to integrate these issues and to go beyond traditional conceptions of sustainability that are either based on a value principle of maintaining some aggregate of capital weak sustainability or stationary state criteria of maintaining social ecological and economic assets constant over time strong sustainability along with individual preferences and macroeconomic objectives the proposed welfare function integrates principles of basic human needs critical economic capital integrity of the ecosystem critical ecological capital and the socio cultural system critical social capital this implies restrictions of the social opportunity space within which sustainable development can proceed and the new value function is defined

contingent valuation and the activation of environmental norms abstract this paper uses contingent valuation cvm as the context in which to explore the implications of a model of altruistic norm activation a model is presented which provides a framework for thinking about the factors that individuals consider when formulating their responses to cvm questions and the processes by which they bring such factors together the activation of personal environmental norms and hence positive willingness to pay depends on four main categories of belief awareness and acceptance of environmental need consequences of personal action responsibility for personal action and acceptance of policy initiatives the model is illustrated with a qualitative case study and some of the implications for cvm are considered in light of these findings it is argued that whilst notions of fairness may not present problems from a demand prediction economic standpoint such notions may be more problematic for the cost benefit analysis use of results

sustainability constraints versus optimality versus intertemporal concern and axioms versus data sustainable sustained or survivable development are defined here as distinct sustainability constraints on intertemporal distribution in a context which ignores uncertainty environmental and intratemporal concerns such constraints are neither self contradictory nor redundant for they can conflict with maximizing the present value of utility optimality nor inferior since the axioms underlying optimality are ethically arbitrary and refuted by empirical psychological data axiomatic arguments may clarify but cannot resolve debates about intertemporal concerns data suggest that sustainability constraints are not respected and that intertemporal welfare functions containing a preference for sustained improvement may better reflect what bodies politic mean by sustainability

the paretian liberal paradox and ecological economics abstract two of the most basic considerations in collective choice are the pareto principle and some minimal protection of individual rights in his impossibility theorem sen 1970 shows that there is a potential inconsistency between preference sovereignty as expressed by the pareto condition and the protection of minimal rights a liberal or liberty condition the paretian liberal paradox plp and the extensive debate surrounding it prompts serious reconsideration of the traditional welfare economics approach the critique of welfarism made by the plp is of central importance for environmental issues given pervasive externalities missing markets uncertainty and potential irreversibilities making collective choice decisions on these issues may require using explicit non utility information and restricting individual preference sovereignty we explore the implications of the plp for long term environmental policy and the transdisciplinary field of ecological economics as a simple pedagogical device relying on sparse principles the plp stimulates an increased awareness of the potential conflict between preferences and rights recognition of the plp focuses attention on what counts as admissible information in collective choice rules for example consideration of the plp illuminates differences in the informational requirements of alternative sustainability concepts

the conditions for achieving environmentally sustainable development this paper is interested in the narrower interpretation the relationship between environmental quality and sustainable economic activity the latter is interpreted as that level of economic activity which leaves the environmental quality level intact with the policy objective corresponding to this notion being the maximization of net benefits of economic development subject to maintaining the services and quality of natural resources over time 3

limits to substitution and irreversibility in production and consumption a neoclassical interpretation of ecological economics abstract there are many methodological approaches within ecological economics one of the principal modes of analysis is a modified version of the standard neoclassical model this paper examines the parallels which emerge between the ideas of some ecological economists concerning production and the ideas of others concerning consumption when these ideas are interpreted in the neoclassical paradigm it is well known that ecological economics is characterized by arguments concerning limits to substitution between inputs energy natural capital etc vs manufactured capital labor etc in production and the implications these have for sustainability however various authors have also expressed concerns regarding limits to substitution in consumption either between environmental assets and other goods or between basic needs commodities and other goods though the specific reasons for non substitution are different in the production and consumption cases the underlying theme is that individual commodities and other inputs have unique physical or other properties which make them poor substitutes ideas about irreversibility in production and economic development are also prominent in ecological economics likewise many authors have argued for similar irreversibilities in consumption behavior in analogy to the term technological change i coin the term preferential change to describe these phenomena the linking themes in this case are that the economy environment system is evolutionary in character and that external effects intended and unintended consequences of actions or processes imposed on other parties or resources are all pervasive

unraveling the veil of fuzziness a thick description of sustainability economics this article provides a thick description geertz 1973 of sustainability economics baumgartner and quaas 2010a b have proposed as an alternative to ecological economics the new field of sustainability economics which has triggered various replies the purpose here is to order and to review these contributions building upon a literature review of sustainability economics the paper argues that the concept currently has more of a fuzzy and declamatory character the rhetoric mccloskey 1998 of sustainability economics contains general issues of sustainability economics externalities and the capability approach the article argues that it is currently not clear how the solutions for science and policy proposed by sustainability economics differ from those of ecological economics efforts should be directed towards further development of the theory and the operationalization of sustainability principles the systemic view of co evolutionary development social learning and sustainability economics normative underpinning merits more consideration in the debate about sustainability economics

occupational choice incentives and wealth distribution abstract we consider a model of occupational choice in large economies where individuals differ in their wealth endowment individuals can remain self employed or engage in productive matches with another individual i e form firms matches are subject to a moral hazard problem with limited liability the division of the gains from such matches is determined by competitive forces when the incentive problem is asymmetric matches are typically wealth heterogeneous with richer individuals choosing the occupation for which incentives are more important the utilities attained within a match depend on the wealth distribution and changes in the latter give rise to trickle down effects