economic valuation of the threat posed by the establishment of the asian tiger mosquito in australia invasive species policy could be better informed if we understood how much people value reductions in the risks posed by these organisms this study investigates the public s willingness to pay wtp for additional measures to reduce the risk of invasion of the australian mainland by the asian tiger mosquito atm the study contributes to the literature by applying a stated preference method to estimate the public s wtp to reduce the risk of an atm invasion expressed as a change in probability it is the first ex ante invasive species analysis to test over two discrete invasion reduction probabilities based on management effort further to overcome the challenges in valuing changes in probabilities the study presented respondents with a well defined discrete difference in the final probability with one scenario reducing risk from 50 to 25 and the other from 50 to 5 we find a significant difference in the mean wtp values between these two scenarios a 67 vs a 90 the overall conclusion is that estimated benefits of reducing the probability of an atm incursion outweigh the costs

application of portfolio theory to asset based biosecurity decision analysis abstract a key challenge for biosecurity decision making is how best to allocate scarce resources across multiple environmental assets the allocation of funds for the best return from investment requires a careful assessment of expected return and uncertainty in this paper we applied a portfolio theory based decision support tool that helps determine resource allocation in a way that maximizes expected return and minimizes uncertainty our framework offers three advancements to the literature first it helps in making resource allocation decisions across multiple pests that affect multiple environmental assets second it incorporates multiple sources of uncertainty in the decision analysis including economic value uncertainty finally it demonstrates a generic approach to design a choice experiment study to estimate monetary values of a broad group of environmental assets we find that a portfolio based framework applied in conjunction with a choice experiment study can be a useful tool to guide biosecurity resource allocation decisions our results show that disregarding value uncertainty may cause bias by underestimating true uncertainty in the opportunity set the choice experiment study revealed substantial positive non market values generated by environmental biosecurity in australia however significant preference heterogeneity across respondents with regards to different biosecurity outcomes was observed

contingent valuation from dubious to hopeless abstract approximately 20 years ago peter diamond and i wrote an article for this journal analyzing contingent valuation methods at that time peter s view was that contingent valuation was hopele

money and prices some evidence from india the objective of this paper is to examine the long run relationship between supply of money and prices the prices considered are wholesale price and consumer price indices for industrial workers urban non manual workers and agricultural labourers using the null hypothesis of cointegration it is shown that the supply of money and consumer price indices for urban non manual workers and agricultural labourers are cointegrated in the long run both the prices namely urban non manual workers and agricultural labourers form a stable relationship with money supply in the long run

money prices and stabilization policies in some developing countries in this paper we examine the general reasons for price and balance of payments instability in less developed countries ldcs and critically evaluate the adjustment policies usually prescribed by the international monetary fund imf for these countries the scope for stabilization policies is then examined in the framework of the keynesfan monetarist controversy the causality between money and prices is examined by using a transfer function time series approach a simple model for inflation generation is set up to analyse the price and output effects of the growth of money supply some unfavourable effects of a restrictive monetary stabilization policy in ldcs are indicated the impact of a rise in interest rate on savings in some ldcs are found to be positive but not always significant

devaluation and the trade balance in india stationarity and cointegration a study of devaluation and the trade balance in india corrects the data for nonstationarity previous empirical tests have used non stationary data the trade balance in india is not cointegrated with a number of variables including the exchange rate absorption elasticity and monetary models are compared and the monetary model performs better there has been no j curve in india and devaluations have had no significant long run effect on the trade balance

optimal bid selection for dichotomous choice contingent valuation surveys abstract this paper develops a model for optimal survey design for the dichotomous choice contingent valuation method that finds the bid amounts as well as the sample sizes corresponding to each bid the model uses an iterative procedure to select the survey design that minimizes the mean square error of the welfare measure a set of monte carlo simulations shows that the model produces significantly lower mean squared errors for the welfare estimate than the next best model produces survey design under alternative assumptions regarding the statistical distribution of the welfare measure is also addressed the model produced significantly different survey designs depending on whether the distribution was assumed to be symmetric or asymmetric

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

pension funds corporate responsibility and sustainability abstract the paper introduces two approaches to identify corporate behaviours that should attract the attention of pension funds in the context of debates over sustainability while remaining within a narrow interpretation of their fiduciary duty the approaches are based on two simple models of how different societal spheres interact with one another and influence long term economic performance these models allow exploring the idea that corporations can influence trajectories of societal change keeping in mind that pension funds care about these trajectories because they care about the long term performance of the economies in which they invest the model underlying the internalising investor approach assumes that corporations are the only actors in society in this model pension funds will maximise their expected ability to meet their liabilities if companies internalise negative externalities and spill over effects in order to reduce the cost of market failures for the economy as a whole the model underlying the civic investor approach comprises companies and various actors the state ngos corporate stakeholders engaged in shaping the governance structure that mediates the interaction between the social environmental and economic spheres in this model pension funds will want companies to facilitate effective responses to societal problems these approaches allow us to identify a number of corporate behaviours that should be of concern to pension funds

yea saying in contingent valuation surveys a number of recent papers have provided estimates of willingness to pay derived in contingent valuation surveys exceeding those revealed in experimental or real life markets one possible explanation for the overestimation of values is the presence of yea saying with the objective of reducing the occurrence of yea saying a new elicitation format referred to as the dissonance minimizing d m format is proposed an empirical comparison of the dm format with the conventional dichotomous choice dc format and the ambivalence reducing polychotomous choice pc format suggested by ready whitehead and blomquist 1995 is made results are encouraging for the dm

demand for india s manufactured exports abstract surprisingly few estimates exist of disaggregated world demand functions for ldc exports despite the obvious policy importance of the inherent price elasticities time series simultaneous equation estimates are herein presented of world demand for 23 categories of manufactured exports from india tests for homotheticity separability whether price elasticity of demand differs during world recession and for effects of foreign learning about india s exports are reported estimated price elasticities range from below unity to infinity revealing important variations masked by aggregate studies these results raise considerable doubts about policy design from a uniform small country assumption

confidence intervals for evaluating benefits estimates from dichotomous choice contingent valuation studies i evaluate the potential usefulness of nonmarket valuation concepts and techniques from environmental economics for improving wildlife conservation the concepts include distinguishing between on site recreation use value and off site passive use or

economic valuation of the influence of invasive alien species on the economy of the seychelles islands abstract biodiversity underpins most economic activities in seychelles and loss of biodiversity as a result of invasive alien species ias could result in major negative economic impacts for the country this paper assesses the value of impacts of ias on biodiversity natural resources and the national economy using the principles of total economic value tev the contingent valuation method was used to obtain a willingness to pay wtp estimate for a policy to protect important biodiversity from ias tourists indicated a mean wtp of us 52 us 58 on top of their usual expenditures to fund conservation policy at present approximately us 0 25 million per year is spent on ias control while the economic damage associated with 4 key ias is approximately us 21 million per year comparing the benefits from eradication with the costs involved gives a benefit cost ratio greater than unity indicating that the policy of eradicating ias is economically justified however there is a long way to go before the resources devoted to the problem will be in proportion to the risks

an investigation of part whole biases in contingent valuation studies abstract part whole bias is a possible explanation for nonuse contingent valuation estimates that are insensitive to marginal changes in environmental commodities our empirical analyses reveal no statistically significant differences in willingness to pay of independent samples of nonusers to prevent 2000 20 000 or 200 000 migratory waterfowl deaths in the central flyway all numbers less than 2 of the waterfowl population five alternative propositions for explaining this empirical findings do not provide a completely satisfactory explanation more research is necessary to investigate appropriate commodity metrics sample sizes for small changes in environmental commodities and consider how respondents evaluate small changes in environmental commodities

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

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

international prices wages and inflation in the open economy a chilean model this paper presents a macroeconomic model to explain the dynamics of chilean inflation during 1976 82 the model extends the australian and scandinavian open economy models by making a finer distinction between tradables and nontradables and by introducing more elaborate expectations formation results of the model supplied to quarterly chilean data over the period reject the homogeneity of the system indicating that a devaluation does indeed affect the relative price between tradables and nontradables in the chilean context the results cast doubt on the stabilization policies pursued during the period 1979 82 which implicitly relied upon a model in which full homogeneity obtains

take a risk preferring prevention over control of biological invaders abstract scientists have argued that invasive species can be managed most cost effectively with greater investments in prevention further under ideas like the precautionary principle it is reasonable to expect that a cautious manager would use more prevention relative to control because it keeps more invaders out yet this is not typically done in many cases private and public resources are invested primarily to control existing invaders rather than to prevent new invasions managers frequently wait until after invaders have arrived and then scramble to limit the damages we believe these paradoxical decisions can be understood by recognizing the link between typical human preferences for risk bearing and the technology of risk reduction we demonstrate quantitatively how managers perceived to be cautious or averse to risk tend to shy away from prevention relative to control this counterintuitive result arises because control is a safer choice than prevention because its productivity is relatively less risky it works to remove existing invaders from the system in contrast the productivity of prevention is more uncertain because prevention only reduces the chance of invasion it does not eliminate it and invasion may not occur even in the absence of prevention managers averse to risk will inherently avoid as much uncertainty as possible whether the source of uncertainty regards ecological outcomes or economic productivity implications for environmental decision making are clear in invasive species management if managers act as though they are risk averse their caution can backfire when it leads to more control rather than prevention the social consequences of this choice are a greater probability of future invasions and lower social welfare our results suggest that social welfare is highest when managers were willing to take a risk with prevention

a dynamic macroeconometric model for short run stabilization in india this paper presents a small macroeconometric model examining the determinants of indian trade and inflation to address the effects of a reform policy package similar to those implemented in 1991 this is different from previous studies along one important dimension that we explicitly incorporate the non stationarity of the data into our model and estimation procedures which suggest that the stationarity assumption may be a source of misspecification in previous work so the model has been estimated using the data from 1950 to 1995 employing fully modified phillips hansen method of estimation to obtain the cointegrating relations and short run dynamic model policy simulations using dynamic simulations method compare the dynamic responses to devaluation with the responses to tight credit policy it is shown that the trade balance effects of tight credit policy are more enduring than those of devaluation the simulations demonstrate that the devaluation has actually worsened the trade balance and hence devaluation is not an option in response to a negative trade shock whereas the reduction in domestic credit produces a desirable improvement in the trade balance

exchange rate versus credit policy analysis with a monetary model of trade and inflation in india abstract a general equilibrium model of the trade balance and inflation in india is specified and empirically analyzed the model takes into account many important institutional features of india such as foreign exchange rationing and emphasizes the effects of monetary disequilibrium on the trade balance policy simulations compare the dynamic responses to devaluation with the responses to tight credit policy it is shown that the relative price effects of policies are often significantly offset by perverse liquidity effects which serve to raise absorption however the trade balance effects of devaluation are found to be more enduring than those of tight credit policy

slow money in an age of fiduciary capitalism abstract in the era of fiduciary capitalism investors have begun fulfilling non financial goals in order to address the concerns of a broader range of stakeholders socially responsible investors who were part of fringe movements headed by non profit organizations have emerged as powerful fiduciaries with a strong focus on triple bottom line based outcomes the slow money movement which has been spear headed by non profits in the developed world places a strong emphasis on making capital circulate locally especially within agricultural communities slow money investors across the us some of whom are private investment funds and community development financial institutions are striving to generate triple bottom line based outcomes in our study we have discussed how the slow money movement mirrors fiduciary capitalism we have analyzed how slow money investors have expanded the scope of traditional fiduciary obligations five organizations in the us have participated in our research and we developed a seven point taxonomy of slow money to analyze our findings our findings revealed how slow money investors as fiduciary capitalists generate financial social and environmental returns by investing patient capital in agriculture and local enterprises

rational expectations and price behavior abstract this paper evaluates the role of rational expectations in price setting behavior in india india has a large informal sector where prices are generally flexible since most economic transactions do not take place under formal and fixed contracts empirical tests suggest that prices respond fully to anticipated changes in demand while unanticipated changes affect output furthermore the price equation was found to be consistent with the money demand and output equation in the past the monetary authority in india have not systematically responded to negative output shocks such as those arising from droughts or famines by introducing unanticipated reductions in money growth this policy has been helpful in minimizing output losses and thereby stabilizing prices

socially responsible investing in the united states socially responsible investing sri has emerged in recent years as a dynamic and quickly growing segment of the u s financial services industry involving over 2 trillion in professionally managed assets its conceptual origins can be found in the early history of civilization with it s modern roots in the 1960s this paper provides an overview of the breadth and depth of the concept and practice of socially and environmentally responsible investing describes the investment strategies that together define sri as currently practiced in the u s offers several observations about some of the factors fueling its dramatic growth and presents data showing that investors who choose to invest in a socially and environmentally responsible manner can do so without giving up investment returns sri has matured to a point where virtually any investment need can be met through portfolio design that integrates an investor s personal values institutional mission and or social priorities the socially responsible investment industry in the unitedstates is a young phenomenon even referring to it as an industry ten years ago may have been a bit of a stretch while it has grown dramatically in recent years it is an area of work of study and of practical application that continues to evolve in many significant ways one intriguing example of the ongoing development of the field can be found in the analysis of the language used to describe it the terms social investing socially responsible investing ethical investing socially aware investing socially conscious investing green investing values based investing and mission based or mission related investing all refer to the same general process and are often used interchangeably

valuing public goods discrete versus continuous contingent valuation responses independent applications of open ended and dichotomous choice formats are compared using tests of means estimating joint likelihood functions and nonparametric tests of distributions the null hypothesis of no difference in the open ended and dichotomous choice estimates of central tendency cannot be rejected for two out of three data sets while estimated standard deviations are significantly different for all three data sets in addition actual dichotomous choice means and standard deviations exceed those from comparable synthetic dichotomous choice data sets suggesting either open ended questions underestimate values or dichotomous choice bid structures may lead to systematic overestimates

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

validation of stated preferences for public goods a comparison of contingent valuation survey response and voting behaviour this study reports the results from an in person comparison of contingent valuation cv survey response and subsequent voting behaviour on comparable propositions to increase public spending for landscape protection a substantial proportion of cv responses were not consistent with self reported actual voting decisions suggesting an upward bias of stated willingness to pay item non response and protest zero bids were more frequently given by those rejecting than those approving the actual proposition self reported actual decisions yielded a more consistent explanatory pattern than did hypothetical choices the official aggregate voting records show that these results cannot be explained simply by errors in self reported votes we conclude that referenda provide a valuable opportunity to test stated preference methods for public goods particularly public goods with significant passive use values however an important requirement is that the stated choices to be compared with the referendum decisions unlike in previous studies come from independent contingent valuation surveys