the greenhouse effect damages costs and abatement the buildup of so called greenhouse gases in the atmosphere co2 in particular appears to be having an adverse impact on the global climate this paper briefly reviews current expectations with regard to physical and biological effects their potential costs to society and likely costs of abatement for a worst case scenario it is impossible to assess in economic terms the full range of possible non linear synergistic effects in the most favorable although not necessarily likely case of slow paced climate change however it seems likely that the impacts are within the affordable range at least in the industrialized countries of the world in the third world the notion of affordability is of doubtful relevance making the problem of quantitative evaluation almost impossible we tentatively assess the lower limit of quantifiable climate induced damages at 30 to 35 per ton of co2 equivalent worldwide with the major damages being concentrated in regions most adversely affected by sea level rise the non quantifiable environmental damages are also significant and should by no means be disregarded the costs and benefits of 1 reducing cfc use and 2 reducing fossil fuel consumption as a means of abatement are considered in some detail this strategy has remarkably high indirect benefits in terms of reduced air pollution damage and even direct cost savings to consumers the indirect benefits of reduced air pollution and its associated health and environmental effects from fossil fuel combustion in the industrialized countries range from 20 to 60 per ton of co2 eliminated in addition there is good evidence that modest e g 25 reductions in co2 emissions may be achievable by the u s and by implication for other countries by a combination of increased energy efficiency and restructuring that would permit simultaneous direct economic benefits savings to energy consumers of the order of 50 per ton of co2 saved a higher level of overall emissions reduction possibly approaching 50 could probably be achieved at little or not net cost by taking advantage of these savings we suggest the use of taxes on fossil fuel extraction or a carbon tax as a reasonable way of inducing the structural changes that would be required to achieve significant reduction in energy use and co2 emissions to minimize the economic burden and create a political constituency in support of the approach we suggest the substitution of resource based taxes in general for other types of taxes on labor income real estate or trade that are now the main sources of government revenue while it is conceded that it would be difficult to calculate the optimal tax on extractive resources we do not think this is a necessary prerequisite to policy making in fact we note that the existing tax system has never been optimized according to theoretical principles and is far from optimal by any reasonable criteria

option value empirical evidence from a case study of recreation and water quality a procedure for measuring option value and other preservation values of water quality is developed and applied to a case study area in the south platte river basin colorado benefits from water based recreation activities are the focus of the study the results provide an empirical test and confirmation of weisbrod s proposal that option value and other preservation values represent important social benefits and should be added to the aggregate consumer surplus of recreation activities to determine the total benefit of environmental amenities to society in the absence of such an estimate insufficient resources would be allocated by society to preservation of unique environments such as pristine mountain streams where mineral and energy development may irreversibly degrade water quality

discounting in a world of limited growth this paper explores the consequences fordiscounting of assuming limits to growth one of the main determinants of the discount rate is the rate of economic growth if growth rates decline in the future then the discount rate should not be constant but also decline over time in fact we would then need not a single discount rate but rather a variable discount schedule this would imply higher present values for the distant future the paper analyses how discount rates would vary with different assumptions about the patterns of growth and the pure rate of time preference

are optimal emissions really optimal four critical issues for economists in the greenhouse although the greenhouse effect is by many considered as one of the most serious environmental problems several economic studies of the greenhouse effect most notably nordhaus s dice model suggest that it is optimal to allow the emissions of greenhouse gases ghg to increase by a factor of three over the next century other studies have found that substantial reductions can be justified on economic grounds this paper explores into the reasons for these differences and identifies four partly overlapping crucial issues that have to be dealt with when analysing the economics of the greenhouse effect low probability but catastrophic events cost evaluation methods the choice of discount rate the choice of decision criterion the paper shows that i these aspects are crucial for the policy conclusions drawn from models of the economics of climate change and that ii ethical choices have to be made for each of these issues this fact needs wider recognition since economics is very often perceived as a value neutral tool that can be used to provide policy makers with optimal policies

double co2 and beyond benefits costs and compensation abstract economic decisions over what action if any to take concerning the greenhouse effect tend to revolve around the social discount rate implicitly the debate concerns how to attribute intertemporal weights to welfare and implies a moral stance that is rarely given explicit recognition refocusing on the outcomes of current actions emphasises the role of compensation a conflict is apparent between the view that the current generation need be unconcerned over the loss or injury caused to future generations because they will benefit from advances in technology investments in both man made and natural capital and direct bequests and the requirement to avoid harming the innocent changes in units of welfare cannot be viewed as equivalent regardless of their direction in general doing harm is not cancelled out by doing good the result is a rejection of the potential compensation principle which underlies the current economic stance and a reconsideration of the acceptability of compensation altogether the concept of human rights and a non utilitarian perspective are used to show how cost benefit analysis denies the existence of inalienable rights and economics limits the moral considerability of harm

explanations for the instability of equity beta risk free rate changes and leverage effects this paper is an initial attempt to bridge the gap that presently exists between the theoretical and empirical literature on the instability of equity beta we focus on two factors from the joint option pricing model capital asset pricing model framework leverage and unexpected changes in the risk free rate which are hypothesized to influence the instability of equity beta across firms and over time using alternative variable parameter regression models we find that highly leveraged firms exhibit greater equity beta instability than firms with lower leverage over time equity betas exhibit greater instability during periods of large unexpected changes in the risk free rate when compared to periods with small unexpected changes in the risk free rate

a contribution to event study methodology with an application to the dutch stock market abstract this paper proposes an extended market model for event studies based on daily stock returns for actual data the assumptions of the simple market model are violated the return distribution is not normal and neither the variance of the error term nor the risk parameter beta are constant our model incorporates the generalized autoregressive conditional heteroskedasticity garch model with t distributed errors and a time dependent beta we test for anomalies by adding dummy variables in the regression equation our model is fairly general and could be used in a wide variety of event study situations we illustrate the model by an analysis of the weekend and the option expiration effect we use return data from the dutch stock market the weekend effect on stock returns is significant but no expiration effect could be detected

economic democracy as an environmental measure abstract even though the conventional capitalist corporation is the globally dominant form of business organization it may not be the most environmentally friendly given the need for a sustainable steady state economic system some other form of business organization will likely be required that uses natural resource inputs more efficiently and is less growth oriented than the typical corporation an attractive alternative is the producer cooperative where employment is accompanied by a right to democratic participation in organizational governance and a share of surplus earnings a comparative theoretical analysis of cooperative and profit maximizing corporate behavior suggests that cooperatives will tend to use natural resource inputs more efficiently and will be less growth oriented than corporations the limited comparative empirical research that is available supports the greater input efficiency of cooperatives relative to corporations this same research suggests that in fully employed economies cooperatives will be less growth oriented than corporations although where unemployment is substantial the reverse is likely environmentally sustainable full employment is theoretically achievable through workweek reductions

a growing trend toward knowledge work in canada abstract this paper answers three questions related to the growing trend toward knowledge occupations in canada i what was the magnitude of the trend between 1971 and 1996 ii was the trend a widespread phenomenon or was it restricted to specific industries iii what are the proximate causes of the trends using five censuses 1971 1981 1986 1991 1996 and the input output i o data the paper provides evidence that the canadian economy is becoming increasingly knowledge based although the upgrading trends differ across knowledge occupations moreover we find that this phenomenon is spread across all industrial sectors finally using a decomposition analysis borrowed from wolff and baumol three factors the substitution effect the productivity lag effect and the demand effect have been examined in order to shed some light on these trends we find that these effects vary according to the nature of the knowledge involved in these different groups of occupations thus reflecting not only the importance of the technological change skill bias but also the increasing complexity of controlling and managing the new economic activities

the aggregation of climate change damages a welfare theoretic approach the economic value of environmental goods is commonly determined using the concepts of willingness to pay wtp or willingness to accept wta however the wtp wta observed in different countries or between individuals will differ according to socio economic characteristics in particular income this notion of differentiated values for otherwise identical goods say a given reduction in mortality risk has been criticized as unethical most recently in the context of the social cost chapter of the ipcc second assessment report these critics argue that being a function of income wtp wta estimates reflect the unfairness in the current income distribution and for equity reasons uniform per unit values should therefore be applied across individuals and countries this paper analyses the role of equity in the aggregation of climate change damage estimates using basic tools of welfare economics it shows one way of how wtp wta estimates can be corrected in aggregation if the underlying income distribution is considered unfair it proposes that in the aggregation process individual estimates be weighted with an equity factor derived from the social welfare and utility functions equity weighting can significantly increase aggregate global damage figures although some specifications of weighting functions also imply reduced estimates the paper also shows that while the postulate of uniform per unit values is compatible with a wide range of reasonable utility and welfare specifications there are also cases where the common value notion is not compatible with defensible welfare concepts

a new test of the relationship between regulatory change in financial markets and the stability of beta risk of depository institutions the us economy experienced major regulatory changes in the banking and finance industry with the passage of five major acts over the period 1980 to 1991 this has generated an extensive literature investigating the effects of these changes on the us banking industry in particular this body of research has examined the share market reaction to regulatory changes as well as their impact on the risk return market value and profitability of banking industry stocks generally it has been found that the regulatory changes have had a substantial impact although the effect has not been uniform across all depository institutions this paper extends this literature by analysing the stability of a sample of eighteen us banking industry stock betas across five periods a pre regulatory change period a monetary experiment period a deregulation period a reregulation period and a post regulatory change period based on an analysis of weekly returns we find that the level of bank risk has increased further we also find a tendency towards greater beta instability in both the monetary experiment and deregulation samples the degree of beta instability is lowest in the pre regulatory change and post regulatory change samples overall the monetary experiment and regulatory change coincided with an increased tendency towards beta instability we also compare our results to a randomly selected control sample of non banks and find some more general effects of regulatory change on individual stock betas

climate policy without tears cge based ancillary benefits estimates for chile this study examines a hithertoneglected set of benefits from climate policy viz the reduction in emissions of localair pollutants and the associated healthbenefits in this case for residents ofsantiago de chile by using an economy widemodel we are able to compare these monetisedbenefits to the direct costs of carbonabatement thereby determining the scope for no regrets co2 reductions sensitivityanalysis is performed in recognition of theuncertainty surrounding certain key parameterand exogenous variable values notably households willingness to pay wtp forreduced mortality and morbidity risk and thesubstitution elasticities among energy sourcesand between energy and other inputs ourresults suggest that even with the mostconservative assumptions low wtp lowelasticities chile could reduce co2emissions by almost 20 from the 2010 baselinewith no net welfare loss though a 10 reduction is closer to optimal if insteadchile were to target a 20 reduction inparticulate concentrations a particulate taxwould incur slightly lower costs than anequivalent carbon tax to achieve the samehealth benefits while the latter is asecond best method of addressing localpollution the welfare loss of choosing thisinstrument could be fully compensated by carboncredit sales at a world market price of 20 tc

rethinking the costs related to global warming a survey of the issues one approach to the economic analysis of global warming seeks to balance the costs of damage from or adaptation to it with the costs of mitigating it the costs of adaptation and damage have been estimated using techniques of environmental evaluation but are subject to a wide margin of uncertainty the costs of mitigation principally by reducing the emissions of co2 have been estimated using different kinds of economic models some of the results of which have suggested that very little abatement of carbon emissions is justified before the costs of abatement exceed the benefits of it in terms of foregone damage and adaptation costs the paper analyses the extent to which this conclusion is a function of the modelling assumptions and techniques used rather than likely practical outcomes with regard to the models treatment of unemployed resources revenue recycling prior distortions in the economy due to the tax system and possible dynamic effects from the introduction of a carbon energy tax it concludes that with different and arguably more appropriate treatment of the above issues especially when the secondary benefits of reducing co2 emissions are also taken into account it is not clear that even substantial reductions in the use of fossil fuels will incur net costs especially if there is the prospect of even moderate costs from global warming

global warming discounting is not the issue but substitutability is the cost benefit study of nordhaus 1994 is representative for the neoclassical approach towards global warming nordhaus found that no substantial emission cuts are warranted most of his critics have concentrated on the issue of discounting and demanded that a lower discount rate should be applied these criticisms first miss the point and second lead to ethically dubious inconsistent conclusions and inefficient policy choices they miss the point because the real problem of nordhaus s methodology is his implicit underlying assumption of perfect substitutability between natural and other forms of capital given the validity of this assumption lowering the rate of discount is inconsistent with current savings behaviour is ethically dubious because future generations will be much richer than the current one anyway and is inefficient because scarce financial resources are channelled into emissions abatement that exhibits rates of return far inferior to alternative public investments any call for aggressive emission abatement must therefore directly attack the perfect substitutability assumption of neoclassical economics the real disagreement is about whether consumption growth can compensate for environmental degradation caused by global warming discounting is not the issue but substitutability is

the economics of climate change impacts a la stern novel and nuanced or rhetorically restricted abstract the stern report conducts an estimation of greenhouse gas control costs weighed against the benefits of avoiding damages at the global scale as i show stern and colleagues are aware of the limits to cba although they chose to ignore the considerable literature on the subject the many contributions by ecological economists and especially work specific to the enhanced greenhouse effect various problems are raised or mentioned in the report including strong uncertainty incommensurability plural values non utilitarian ethics rights distributional inequity poverty and treatment of future generations how then can this report acknowledging so many of those aspects of climate change that render cba an unsuitable tool for generating policy recommendations go ahead to conduct a global cba and make policy recommendations i explain how issues are suppressed and sidelined in a careful and methodical manner with the pretence they have been addressed by state of the art solutions meanwhile the authors maintain allegiance to an economic orthodoxy which perpetuates the dominant political myth that traditional economic growth can be both sustained and answer all our problems besides perpetuating myths this diverts attention away from alternative approaches away from ethical debates over harming the innocent the poor and future generations and away from the fundamental changes needed to tackle the very real and serious problems current economic systems pose for environmental systems

timing decisions and the behavior of mutual fund systematic risk the investment performance of professionally managed portfolios in general and mutual funds in particular has been the subject of considerable attention in finance fama 9 has suggested that overall portfolio performance be broken down in such a manner that the individual sources of performance can be identified two basic sources are 1 the ability of the portfolio manager to forecast price movements of individual common stocks relative to stocks in general selectivity or microforecasting and 2 the ability to forecast the direction of the stock market relative to fixed income securities timing or macroforecasting

discounting and distributional considerations in the context of global warming the economics of global warming is reviewed with special emphasis on how the cost depends on the discount rate and on how costs in poor and rich regions are aggregated into a global cost estimate both of these factors depend on the assumptions made concerning the underlying utility and welfare functions it is common to aggregate welfare gains and losses across generations and countries as if the utility of money were constant but it is not if we assume that a e co2 equivalent dlubling implies costs equal to 1 5 of the income in both high and low income countries a pure rate of time preference equal to zero and a utility function which is logarithmic in income then the marginal cost of co2 emissions is estimated at 260 590 usd ton c for a time horizon in the range 300 1000 years an estimate which is large enough to justify significant reductions of co2 emissions on purely economic grounds the estimate is approximately 50 100 times larger than the estimate made by nordhaus in his dice model and the difference is almost completely due to the choice of discount rate and the weight given to the costs in the developing world as well as a more accurate model of the carbon cycle finally the sensitivity of the marginal cost estimate with respect to several parameters is analyzed

monetary valuation of the social cost of co2 emissions a critical survey an expanding branch of research has estimated the potential costs of climate change which are often expressed as the social cost of carbon scc or the costs of an additional ton of co2 emissions estimates of the scc can be used by policy makers to evaluate climate change policies and greenhouse gas emission reduction projects by means of cost benefit analyses cbas such analyses are complicated by the wide range of scc values that have been reported in the literature and the large uncertainties involved in estimating the potential economic impacts and related costs of climate change this study presents a critical review of the reported scc estimates by examining some neglected consequences of climate change uncertain and extreme scenarios of climate change the discounting of future climate change effects the treatment of individual risk aversion and assumptions about social welfare in view of the many uncertainties and omissions in conventional cost benefit analyses of climate impacts and the scc alternative approaches to decision making should be considered for climate policy

an empirical investigation of the possibility of stochastic systematic risk in the market model in most empirical work on the market model the parameters of that model are estimated by ordinary least squares effectively assuming that the systematic risk of an asset or portfolio is constant through time however a plausible alternative hypothesis would allow the systematic risk of the stock of a company to vary through time such variation may arise through the influence of either microeconomic factors such as operational changes in the company or changes in the business environment peculiar to the company or macroeconomic factors such as the rate of inflation general business conditions and expectations about relevant future events a detailed discussion of these points is provided by rosenberg and guy 1976a 1976b support for the hypothesis that systematic risk varies through time is provided in the studies by jacob 1971 blume 1975 and fabozzi and francis 1978 in this paper we allow the possibility that systematic risk of an asset is stochastic in principle an attempt to model this stochastic behavior could be made through allowing systematic risk to follow a member of the general arima class of models of box and jenkins 1970 ideally the available data would be employed to suggest a specific model from this general class however this approach has to face very serious we discuss the market model in which the possibility is allowed that beta is stochastic and obeys a first order autoregressive process following a brief discussion of methodological issues in the estimation and testing of such models results are reported on an empirical study of a large sample of monthly returns of common stock we find strong evidence indicating stochastic systematic risk but relatively little evidence against the random coefficient model

a note on the temporal variability of canadian financial services stock returns abstract we show that financial services stock returns in canada are covariance nonstationary with respect to any benchmark variable and vary negatively with interest rate levels we find that the conditional correlation between financial services stock returns and the market returns varies directly and monotonically with market volatility this result is robust to monetary regime shifts and other sources of high volatility these findings combined with those of kane and unal 1988 for the u s cast considerable doubt on the constant coefficient two index model and its variants to provide reliable estimates of usual risk measures

climate change costs recent advancements in the economic assessment climate change is unique among the consequences of fossil fuel burning in its far reaching impact both spatially and temporally earlier studies estimate the aggregated monetized damage due to climate change at 1 5 to 2 0 of world gdp for 2 co2 the oecd would lose 1 0 to 1 5 of gdp the developing countries 2 0 to 9 0 according to these estimates these figures are not comprehensive and highly uncertain newer studies increasingly emphasize adaptation variability extreme events other non climate change stress factors and the need for integrated assessment of damages as a result differences in impacts between regions and sectors have increased the market impacts in developed countries tended to fall and non market impacts have become increasingly important marginal damages are more interesting from a policy point of view earlier estimates range from about us 5 to us 125 per tonne of carbon with most estimates at the lower end of this range these figures are based on polynomial functions in the level of climate change but the rate of change may be equally important as are the speed of adaptation restoration and value adjustment furthermore future vulnerability to climate change will be different from current vulnerability on the whole the market impacts fall relatively with economic growth while the non market impacts rise relatively with growth

willingness to pay for ancillary benefits of climate change mitigation assessing the willingness to pay wtp of the general public for climate change mitigation programmes enables governments to understand how much taxpayers are willing to support the implementation of such programs this paper contributes to the literature on the wtp for climate change mitigation programmes by investigating in addition to global benefits the ancillary benefits of climate change mitigation it does so by considering local and personal benefits arising from climate change policies the contingent valuation method is used to elicit the wtp for ancillary and global benefits of climate mitigation policies in the basque country spain results show that wtp estimates are 53 73 higher when ancillary benefits are considered

a sketch of the economics of the greenhouse effect over the last decade scientists have studied extensively the greenhouse effect which holds that the accumulation of carbon dioxide co2 and other greenhouse gases ghgs is expected to produce global warming and other significant climatic changes over the next century see stephen schneider 1989 the present study presents an economic approach for analyzing policies to slow climate change

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

beta nonstationarity portfolio residual risk and diversification over the past years the beta coefficient has been widely used as a measure of systematic risk in investment and portfolio analysis the validity of using the beta coefficient as the proper measure of systematic risk is dependent upon the assumption that the beta coefficient is stationary over time unfortunately this assumption has been challenged by a number of empirical studies which have found the beta coefficient to be unstable over time examples of such empirical investigations are those documented by blume 4 levy 12 levitz 11 baesel 2 altman jacquillat and levasseur 1 and roenfelt griepentrong and pflaum 16 most recently fabozzi and francis 9 reported that some security beta coefficients tend to be random over time their findings also support the regression tendency of the beta coefficients towards the mean over time as found by blume 4 thus because the beta coefficient is changing over time the use of the ordinary least squares ols method in investment and portfolio analysis will yield an inefficient estimate of systematic risk furthermore the ols estimates of security and portfolio residual risks will be influenced by the variability of beta coefficient therefore the purpose of this paper is to investigate the relationship between the variability of the beta coefficient and portfolio residual risk and hence to provide a real picture of the process of portfolio diversification under the condition of beta nonstationarity it is shown that the use of the ols method to estimate security and portfolio residual risks will produce an incorrect conclusion that larger residual risks tend to be associated with higher variability in the beta coefficient

an examination of risk return relationship in bull and bear markets using time varying betas security behavior in bull and bear markets has received some attention in recent years fabozzi and francis 5 first documented evidence that security betas are not influenced by the alternating forces of bull and bear markets their subsequent study of mutual fund betas also indicated that mutual funds generally respond indifferently to bull and bear market conditions using the concept of bull and bear market variations kim and zumwa1t 9 developed and tested the risk premiums associated with the upside and the downside portions of returns variation they concluded that investors expect to receive a risk premium for downside risk and pay a premium for upside variation of returns from their results kim and zumwalt 9 suggested that the down market beta measuring downside risk downside variation of returns may be a more appropriate measure of portfolio risk than the single beta in the market model

the economic effects of climate change greenhouse gas emissions are fundamental both to the world s energy system and to its food production the production of co2 the predominant gas implicated in climate change is intrinsic to fossil fuel combustion specifically thermal energy is generated by breaking the chemical bonds in the carbohydrates oil coal and natural gas and oxidizing the components to co2 and h2o one cannot have cheap energy without carbon dioxide emissions similarly methane ch4 emissions an important greenhouse gas in its own right are necessary to prevent the build up of hydrogen in anaerobic digestion and decomposition one cannot have beef mutton dairy or rice without methane emissions climate change is the mother of all externalities larger more complex and more uncertain than any other environmental problem the sources of greenhouse gas emissions are more diffuse than any other environmental problem every company every farm every household emits some greenhouse gases the effects are similarly pervasive weather affects agriculture energy use health and many aspects of nature which in turn affects everything and everyone the causes and consequences of climate change are very diverse and those in low income countries who contribute least to climate change are most vulnerable to its effects climate change is also a long term problem some greenhouse gases have an atmospheric life time measured in tens of thousands of years the quantities of emissions involved are enormous in 2000 carbon dioxide emissions alone and excluding land use change were 24 billion metric tons of carbon dioxide tco2

defining the generational environmental debt abstract assume that we have borrowed the earth from our children and that we one day shall give it back to them and account for what we have done to it then we would have to try to restore the damage we have caused further we would have to offer compensation for the damage we have done that we cannot repair at a lower cost the generational environmental debt ged is a measure of these costs in this paper we define and discuss the concept of ged and calculate ged for emissions of the greenhouse gas co 2 the global ged for co 2 emissions is estimated to 10000 billion us dollars and the swedish ged for co 2 emissions is estimated to 60 billion us dollars

weight factors in cost benefit analysis of climate change equity considerations may justify the use of weight factors when estimating the costs of climate change this paper reviews different weight factors that have been used in the climate economics literature based on a simple model it is shown that although the different weight factors imply substantially different cost damage estimates they actually yield the same optimal emission reductions this paradox is explained by the fact that some of the approaches require that also the abatement costs are weighted and this offsets the effect of the diverging cost damage estimates the model is then used to analyse the importance weighting may have on the overall cost benefit analysis at present when most of the global emissions of fossil co2 originate from the industrialised countries the global optimal emissions are considerably lower if costs are weighted however the more the emissions in developing countries grow the less important becomes the introduction of weight factors in cost benefit analysis of climate change for the global emission reductions in the model developed here on a regional level the introduction of weight factors continues to play an important role implying substantially lower emissions in the rich region and slightly higher in the poor

targets for global climate policy an overview a survey of the economic impact of climate change and the marginal damage costs shows that carbon dioxide emissions are a negative externality the estimated pigou tax and its growth rate are too low to justify the climate policy targets set by political leaders a lower discount rate or greater concern for the global distribution of income would justify more stringent climate policy but would imply an overhaul of other public policies catastrophic risk justifies more stringent climate policy but only to a limited extent

on the value of life in rich and poor countries and distributional weights beyond utilitarianism this paper discusses the use ofdistributional weights in cba based on a generalbergson samuelson swf in particular it illustratessome consequences of applying a swf characterized byconstant inequality aversion which includes classicalutilitarianism as a special case together with aconstant relative risk aversion utility function whencalculating the damage costs of global warming itextends and clarifies earlier unintuitive results andemphasizes that utility must be seen as fully cardinalin terms of levels in this context in the specialcase of utilitarianism on the other hand it issufficient to be able to make interpersonalcomparisons of utility changes

the occupational dynamics of recent canadian engineering graduates inside and outside the bounds of technology abstract the increasing pervasiveness of new technologies in a multitude of occupations seems to have given a labour market advantage to engineers offering them a range of job opportunities outside the traditional bounds of technology with important financial and career rewards in this context the oecd technology economy programme tep raised concerns regarding the extent of the increasing availability and attractiveness of job opportunities outside the traditional fields of employment for recent engineering graduates they also however stressed that there was little hard information available to diagnose the problem in canada a series of databases the national graduates surveys allows us to conclude that i there has been no increase in the proportion of recent engineering graduates working in non technical occupations except for the management ladder especially engineering management ii when analysed in a static perspective non engineering occupations do not appear to have generally offered advantages over more traditional occupations and iii using a more dynamic mover stayer analysis which more fully exploits the longitudinal nature of the data non technical occupations and in particular the management ladder have offered certain advantages for at least some engineering graduates thereby raising some concerns in line with those expressed by the oecd tep

estimating market model betas a comparison of random coefficient methods and their ability to correctly identify random variation when estimating market model betas using random coefficient methods the rather fine distinction between significance or insignificance as argued in recent studies overlooks two important factors first the maximum likelihood method has not been tested in comparison to the generalized least squares approximation second and more importantly the ability of these methodologies to correctly identify a known random coefficient process has not been examined in the context of the market model using both simulations and subsequent empirical tests this study shows that for reasonable levels of variation in beta neither method can consistently identify a random coefficient process these results suggest that the nominal level of significant random coefficients previously observed could be indicative of a much more predominant phenomenon

the damage costs of climate change toward more comprehensive calculations it is argued that estimating the damage costs of a certain benchmark climate change is not sufficient what is needed are cost functions and confidence intervals although these are contained in the integrated models and their technical manuals this paper brings them into the open in order to stimulate discussion after briefly reviewing the benchmark climate change damage costs region specific cost functions are presented which distinguish tangible from intangible losses and the losses due to a changing climate from those due to a changed climate furthermore cost functions are assumed to be quadratic as an approximation of the unknown but presumably convex functions results from the damage module of the integrated climate economy model fund are presented next uncertainties are incorporated and expected damages are calculated it is shown that because of convex loss functions and right skewed uncertain ties the risk premium is substantial calling for more action than analysis based on best guess estimates the final section explores some needs for further scientific research

some further evidence on the stochastic properties of systematic risk although there is consensus in the finance literature that the beta risk of equity securities is stochastic there is considerable disagreement as to whether the var iation is purely random or exhibits autocorrelation through time to investigate this issue the authors employ a model that allows beta t o exhibit both random and autoregressive behavior simultaneously the y test this model against alternative specifications on a large sampl e of individual securities and randomly formed portfolios comprising 10 50 and 100 securities results are also presented for portfolios formed according to firm size copyright 1987 by the university of chicago

the productivity slowdown the oil shocks and the real cycle f ive facts stand out about economic performance in the united states since world war ii the first is that for most of the postwar period the u s has had a slower rate of economic growth than the other major developed democracies except great britain and much lower rates of growth than germany japan and italy the gap between the growth of per capita income of the united states and comparable countries has however tended to diminish over time and the united states has lately grown at about the same rate as most other developed countries the second outstanding fact is that the united states has fallen far behind in many mass production industries in which it used to lead the world whereas it is ahead of other nations in many new and especially high technology industries in automobiles steel tires household appliances and earth moving and farm equipment for example u s production has fallen dramatically in relation to output in most comparable countries and the country has become a net importer of most such products by contrast in newer industries such as computers jet aircraft sophisticated weaponry and high technology in general the united states is often dominant both as producer and exporter the third outstanding fact is that most of the older heartland of american industry roughly the area north and east of an arc drawn from baltimore to st louis to milwaukee has declined dramatically in comparison with the south and the west this change in regional fortunes has been due in large part to migration motivated by differences in economic prospects from the declining to the advancing

hedge fund risk dynamics implications for performance appraisal accurate appraisal of hedge fund performance must recognize the freedom with which managers shift asset classes strategies and leverage in response to changing market conditions and arbitrage opportunities the standard measure of performance is the abnormal return defined by a hedge fund s exposure to risk factors if exposures are assumed constant when in fact they vary through time estimated abnormal returns may be incorrect we employ an optimal changepoint regression that allows risk exposures to shift and illustrate the impact on performance appraisal using a sample of live and dead funds during the period january 1994 through december 2005