nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

natural resources curse or blessing are natural resources a curse or a blessing the empirical evidence suggests that either outcome is possible this paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources these include that a resource bonanza induces appreciation of the real exchange rate deindustrialization and bad growth prospects and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law corruption presidential democracies and underdeveloped financial systems another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad induces corruption especially in nondemocratic countries and keeps in place bad policies finally resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets the survey also offers some welfare based fiscal rules for harnessing resource windfalls in developed and developing economies

specialization of labor and the distribution of income abstract we analyze a model in which workers must be allocated to tasks to produce there are differences among the workers in absolute ability that are independent of the activity they perform we demonstrate a unique competitive equilibrium that determines both wages and the allocation of workers to tasks the equilibrium wage has the property that workers assigned to the lowest value added tasks will receive a premium above their identifiable contribution to value simply for filling these least valuable positions we examine how the equilibrium wage function changes as the production process becomes more specialized and the division of labor increases journal of economic literature classification numbers d31 d33 j31

robustness of subjective welfare analysis in a poor developing country madagascar 2001 the authors analyze the subjective perceptions of poverty in madagascar in 2001 and their relationship to objective poverty indicators they base their analysis on survey responses to a series of subjective perception questions the authors extend the existing empirical methodology for estimating subjective poverty lines on the basis of categorical consumption adequacy questions based on this methodology they calculate the household specific subjective poverty lines and compare the poverty profiles derived from different subjective welfare questions the results show that the aggregate poverty measures derived from consumption adequacy questions accord quite well with the poverty measures based on objective poverty lines the subjective welfare analysis can be used in poor developing countries for evaluating socioeconomic and distributional impacts of various policy interventions

conjoint effect of environmental labeling disclosure of forest of origin and price on consumer preferences for wood products in the us and uk abstract a study that conjointly analyzed the effects of environmental labeling disclosure of forest of origin and price on consumer preferences for wood products was conducted in the us and the uk a choice based elicitation tool was used to mimic a real life situation where a single product was selected over a set of options data collected were analyzed using a conditional logit model certification issued by a government agency or an environmental non government organization both had a favorable effect on consumer preference over a non certified option the most relevant implication of our findings was the negative effect that disclosing information about a product coming from tropical forests had on consumer preferences even compared to a product of unknown origin a decline in product preference was observed along higher price premiums as expected the degree of sensitivity to price changes was affected by demographic characteristics model coefficients were used to estimate market shares of tropical wood products under different scenarios in both countries scenarios explored the effect of environmental certification and price premiums on product market shares

what drives commodity price booms and busts abstract we provide evidence on the dynamic effects of aggregate commodity demand shocks commodity supply shocks and storage demand or other commodity specific demand shocks on real commodity prices we analyze a new data set of price and production levels for 12 agricultural goods metals and soft commodities from 1870 to 2013 we establish that commodity demand shocks strongly dominate commodity supply shocks in driving prices over a broad set of commodities and over a long period of time while commodity demand shocks have gained importance over time commodity supply shocks have become less relevant

a note on mining with investment in capital one of the principal predictions of the theory of the extractive firm is that its rate of output will decline steadily throughout time recently in this journal campbell 1980 presented an interesting analysis suggesting that this behaviour may be altered if one accounts for the fact that firms must invest in some level of fixed capital which is needed in combination with variable inputs to extract the resource in the campbell analysis the fixed capital places a constraint on the maximum rate of extraction it is shown that this constraint is binding and that extraction is therefore constant over some initial period of the mine when the firm behaves optimally this note demonstrates that the campbell result is due to a fixed proportions technology assumption in particular when a neoclassical technology is assumed one finds that the constraint imposed by the level of fixed capital is never binding and that the optimal extraction rate is strictly monotonically declining as a function of time i to demonstrate this an informal argument will suffice let k be the level of fixed capital chosen by the firm let lt be the amount of the variable factor employed in period t assume that the rate of extraction et is given by the production function2

the choice theory approach to market research this paper surveys economic choice theory stressing developments that permit use of data from psychometric and conjoint experiments to produce market demand forecasts alternatives to the widely used multinomial logit model are summarized and a new method for estimating multinomial probits is described an integration of choice models with attitudinal scaling and perceptual mapping within a latent variable system is described estimation of such systems under either random effects or fixed effects descriptions of heterogeneity across individuals is discussed issues in the use of choice models to describe responses from conjoint experiments are presented new regression diagnostic tests for the consistency of multinomial logit representations are discussed

specialization and human capital incentives for specialization trade and the production of comparative advantage through investment are shown to arise from increasing returns to utilization of human capital indivisibilities imply fixed cost elements of investment that are independent of subsequent utilization hence the rate of return is increasing in utilization and is maximized by utilizing specialized skills as intensively as possible identically endowed individuals have incentives to specialize their investments in skills and trade with each other for this reason even if production technology exhibits constant returns to scale

incentive aligned conjoint analysis abstract because most conjoint studies are conducted in hypothetical situations with no consumption consequences for the participants the extent to which the studies are able to uncover true consumer preference structures is questionable experimental economics literature with its emphasis on incentive alignment and hypothetical bias suggests that more realistic incentive aligned studies result in stronger out of sample predictive performance of actual purchase behaviors and provide better estimates of consumer preference structures than do hypothetical studies to test this hypothesis the authors design an experiment with conventional hypothetical conditions and parallel incentive aligned counterparts using chinese dinner specials as the context the authors conduct a field experiment in a chinese restaurant during dinnertime the results provide strong evidence in favor of incentive aligned choice conjoint analysis in that incentive aligned choice conjoint outperforms hypothetical choice conjo

financial development financial fragility and growth the authors study the apparent contradiction between two strands of the literature on the effects of financial intermediation on economic activity on the one hand the empirical growth literature finds a positive effect of financial depth as measured by for instance private domestic credit and liquid liabilities for example levine loayza and beck 2000 on the other hand the banking and currency crisis literature finds that monetary aggregates such as domestic credit are among the best predictors of crises and their related economic downturns for example kaminski and reinhart 1999 the authors account for these contrasting effects based on the distinction between the short and long run impacts of financial intermediation working with a panel of cross country and time series observations they estimate an encompassing model of short and long run effects using the pooled mean group estimator developed by pesaran shin and smith 1999 their conclusion from this analysis is that a positive long run relationship between financial intermediation and output growth coexists with a mostly negative short run relationship the authors further develop an explanation for these contrasting effects by relating them to recent theoretical models by linking the estimated short run effects to measures of financial fragility namely banking crises and financial volatility and by jointly analyzing the effects of financial depth and fragility in classic panel growth regressions

the environment as a luxury good or too poor to be green abstract this paper discusses the views of different authors on the relations between economic growth and environmental scarcities it lays out the common assumptions behind inglehart s postmaterialist thesis in environmental sociology krutilla s criterion for the valuation of environmental amenities hirsch s notion of the positional economy and pearce s numerical results on weak sustainability the paper shows how different views on the environmental consequences of economic growth imply at the same time different theories about environmental movements in rich countries there is an increasing demand for environmental amenities which cannot be substituted by products of the material economy and there are also environmental movements against the effluents of affluence in poor countries there are environmental movements characterized as the environmentalism of the poor

are stated preferences convergent with revealed preferences empirical evidence from nigeria abstract the debate on the relevance of monetary valuation of environmental goods has often hinged around the convergence of stated and revealed preferences and in turn the actual money choices of respondents in this paper we report two separate experiments conducted in southeastern nigeria to compare irrigators stated willingness to pay for a river basin restoration scheme designed to mitigate soil and water pollution problems in their farms with their actual expenditures to mitigate the same pollution problems we found that the farmers stated and revealed preferences were significantly correlated but yielded significantly different means at 5 level while econometric analysis reveals a systematic association between key socioeconomic variables and farmers stated wtp lending credence to the cvm within its theoretical framework analysis of the qualitative follow ups reveals inconsistencies in some farmers stated and revealed preferences that cannot be satisfactorily explained on the basis of economic theory alone while individual utility maximisation was a dominant driver of both stated and revealed preferences for most farmers lack of environmental awareness information complexity risk aversion and peer pressure were seen to limit the ability and willingness of the least educated segment of the sample to make apparently rational economic decisions in both markets overall the results question the use of convergent and or theoretical validity arguments for justifying and or criticising the use of stated preference experiments in environmental policy

market structure marketing method and price instability data for metals sold on commodity exchanges and at prices set by producers are used to test the relationship between the organization of markets and the behavior of prices on the production side the question is whether prices are more stable in concentrated industries and on the sales side the question is whether markets where buyers are consumers have more stable prices than those with consumers and speculators the recent increase in metal price instability is explained by changes in the market structure and organization variables foremost is increased reliance on commodity exchanges declines in concentration are of less importance

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

can sustainable consumption be learned a model of cultural evolution abstract this paper shows how sustainable consumption patterns can spread within a population via processes of social learning even though a strong individual learning bias may favor environmentally harmful products we present a model depicting how the biased transmission of different behaviors via individual and social learning influences agents consumption behavior the underlying learning biases can be traced back to evolved cognitive dispositions challenging the vision of a permanent transition toward sustainability we argue that green consumption patterns are not self reinforcing and cannot be locked in permanently

self rated economic welfare in russia abstract most of those russian adults who feel that they are poor are not classified as such in the poverty statistics and most of those who are classified as poor don t feel that way we study the determinants of peoples perceptions of their economic welfare in an unusually rich socioeconomic survey while income is a highly significant predictor subjective economic welfare is influenced by many other factors including health education employment assets relative income in the area of residence and expectations about future welfare insights are obtained into how objective data should be weighted in assessing economic welfare

norms and economic motivation in the swedish green electricity market abstract the purpose of this paper is to provide an econometric analysis of the most important determinants of swedish households choice to pay a price premium for green electricity we draw on recent developments in the literature on integrating norm motivated behavior into neoclassical consumer theory and assume that individuals have a preference for keeping a self image as a morally responsible person consumer behavior in the green market place will then be heavily determined by how purchases of different goods affect this self image the analysis is based on postal survey responses from 655 swedish households which are analyzed within a binary choice econometric framework the results indicate that the impact of choosing green on the household budget largely influences the choice between green and brown electricity as does the degree of perceived personal responsibility for the issue and the felt ability to affect the outcome in a positive way we find limited support for the notion that perceptions about others behavior in general affect individual moral norms and ultimately expressed behavior but this is also complemented by the influence of explicit social influence the difficulty in observing others purchases makes it however difficult to distinguish between social and moral norms in the case of green electricity

recent renminbi policy and currency co movements abstract this study investigates how variation in chinese authorities renminbi management since the august 2015 exchange rate reform maps onto variation in the co movement between the renminbi with regional and other emerging market currencies we first identify three post reform periods of rmb management transition basket management and countercyclical management across these periods the reaction of the official fixing rate to market movements differed significantly the co movement with regional and latin american currencies peaked in the basket period when the management was most multilateral making it possible to discern a renminbi zone in this period by contrast the decline in co movement in the countercyclical management period since may 2017 leaves it premature to speak of a renminbi bloc the dependence of the co movements on renminbi management has important implications for renminbi internationalisation

the fuelwood consumption in a rural area of greece abstract renewable energy sources are called to play an important role as regards the increasing energy demand worldwide in particular the need to address the problems created by the oil crises has distinguished the importance of renewable energy in economic development biomass is recognized as one of the most important renewable energy sources that can contribute decisively to the energy needs of modern society and the environment protection in both industrialized and developing countries a very important source of biomass is wood and especially fuelwood in greece because of the economic crisis there is an increased consumption of fuelwood especially in rural areas in this paper using a questionnaire and descriptive statistics and logistic regression analysis we explore the determinants of fuelwood consumption in a rural area in order to propose appropriate policies for the efficient supply of the market

modelling oecd industrial energy demand asymmetric price responses and energy saving technical change abstract the industrial sector embodies a multifaceted production process consequently modelling the derived demand for energy is a complex issue made all the more difficult by the need to capture the effect of technical progress of the capital stock this paper is an exercise in econometric modelling of industrial energy demand using panel data for 15 oecd countries over the period 1962 2003 exploring the issue of energy saving technical change and asymmetric price responses although difficult to determine precisely it is tentatively concluded that the preferred specification for oecd industrial energy demand incorporates asymmetric price responses but not exogenous energy saving technical change

structural change and the kaldor facts in a growth model with relative price effects and non gorman preferences u s data reveal three facts 1 the share of goods in total expenditure declines at a constant rate over time 2 the price of goods relative to services declines at a constant rate over time and 3 poor households spend a larger fraction of their budget on goods than do rich households i provide a macroeconomic model with non gorman preferences that rationalizes these facts along with the aggregate kaldor facts the model is parsimonious and admits an analytical solution its functional form allows a decomposition of u s structural change into an income and substitution effect estimates from micro data show each of these effects to be of roughly equal importance

too poor to be green consumers a field experiment on revealed preferences for firewood in rural guatemala the paper reports on a field experiment that investigates whether households in guatemala are willing to surrender a small material gain in order to buy legal rather than illegal firewood given the ineffectiveness of command and control policies to curb the problem of illegal logging in guatemala the experiment assesses the potential viability of market oriented solutions local consumers in developing countries are generally believed to be too poor to pay a premium for green ethical products therefore little information has been gathered on willingness to pay wtp for such products and its determinants in non affluent consumer markets while our experiment on firewood consumption in central guatemala only implies a weak and indirect test of wtp for green products the results indicate that it is premature if not unwarranted to assume that the poor are not ready to make pro ethical choices in the marketplace moreover we find that information on the legal procedures for firewood extraction significantly affects consumer choice between legal and illegal firewood

a dynamic theory of resource wars we develop a dynamic theory of resource wars and study the conditions under which such wars can be prevented our focus is on the interaction between the scarcity of resources and the incentives for war in the presence of limited commitment we show that a key parameter determining the incentives for war is the elasticity of demand our first result identifies a novel externality that can precipitate war price taking firms fail to internalize the impact of their extraction on military action in the case of inelastic resource demand war incentives increase over time and war may become inevitable our second result shows that in some situations regulation of prices and quantities by the resource rich country can prevent war and when this is the case there will also be slower resource extraction than the hotelling benchmark with inelastic demand our third result is that because of limited commitment and its implications for armament incentives regulation of prices and quantities might actually precipitate war even in some circumstances where wars would not have arisen under competitive markets copyright 2012 oxford university press

religion and the demand for membership in environmental citizen groups i test the hypothesis that religious affiliation is an empirical measure of tastes and beliefs that affect the demand for membership in environmental citizen groups the number of adherents to judeo christian denominations per household has a significant negative effect on state membership rates for nine groups advocating a preservationist approach to environmental policy particularly in states with many catholics baptists and mormons religious affiliation has a marginally significant positive effect on membership rates for two sportsmen groups advocating private stewardship these results suggest that religious affiliation should also be a significant determinant of constituent preferences for environmental policies

the role of economic theory in modelling the long run this argues for a closer link between the modelling of the long run relations in applied economics and the intertemporal equilibrium notion from economic theory this abstract was borrowed from another version of this item

measuring consumers willingness to pay at the point of purchase abstract economists psychologists and marketing researchers rely on measures of consumers willingness to pay wtp in estimating demand for private and public goods and in designing optimal price schedules existing market research techniques for measuring wtp differ in whether they provide an incentive to consumers to reveal their true wtp and in whether they simulate actual point of purchase contexts the authors present an empirical comparison of several procedures for eliciting wtp that are applicable directly at the point of purchase in particular the authors test the applicability of becker degroot and marschak s 1964 well known incentive compatible procedure for assessing the utility of lotteries to measuring consumers wtp in three studies the authors explore the reliability validity and feasibility of the procedure and show that it yields lower wtp estimates than do non incentive compatible methods such as open ended and double bounded contingent valuation they show experimentally t

reformulating the foundations of consumer choice theory and environmental valuation abstract the burgeoning field of environmental valuation has raised serious doubts about the fundamental axioms of consumer choice theory the general validity of the walrasian system and methodological individualism this paper examines these aspects of consumer choice theory paying particular attention to the pioneering contributions of georgescu roegen we argue that evidence from psychology game theory anthropology and contingent valuation surveys reveals a more complex pattern of decision making than that described by neoclassical utility theory we discuss the notions of the invariance of preferences non satiation the principle of complementarity lexicographic preferences and the hierarchy of wants with reference to environmental valuation we also discuss the notion of marginal utility of money the validity of the walrasian system and methodological individualism using scaling concept in hierarchy theory we then address the conflict between theory and reality by introducing a probabilistic binary choice scheme under uncertainty about environmental attributes we argue that these extensions are necessary to account for consumer choices revealed in environmental valuation surveys we conclude with the hope that a reformulation of consumer choice theory based on realistic models of human behavior can be the basis for a viable alternative to neoclassical welfare economics

industrialization and the demand for mineral commodities abstract this paper uses a new data set that begins in 1840 to investigate how industrialization affects the derived demand for mineral commodities i establish that there is substantial heterogeneity in the long run effect of manufacturing output on demand across five commodities a one percent increase in per capita manufacturing output leads to an approximately 1 5 percent increase in aluminum demand and a roughly 1 percent rise in copper demand estimated elasticities for lead tin and zinc are below unity my results suggest that the experience of japan and south korea s industrialization for example may be used to infer the impact of china s industrialization on future demand for metals the results imply substantial differences across commodities with regard to future demand adjustment to equilibrium takes 7 13 years which helps explain the long duration of commodity price fluctuations

determinants of participation versus consumption in the nordic swan eco labeled market abstract this paper analyzes the determinants of demand for nordic swan eco labeled paper products and whether the factors determining the discrete decision to buy a swan labeled product are different from those that determine the quantity purchased using observed consumer purchase data from denmark we find that prices and socio demographic characteristics have a strong impact on the decision to purchase a swan labeled good the quantity consumed of swan labeled goods on the other hand is strongly affected by the availability of swan goods discounts and household size

labor specialization and the extent of the market this paper presents an analytical model of labor specialization workers make human capital investment decisions on the depth and the breadth of their skill given that firms have diverse job requirements and increasing returns to scale workers invest more for the depth of their human capital and less for the breadth as the size of the labor market increases also the larger the size of the market the more varieties of job requirements are used so that the average match between a worker and a firm improves

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

the division of labor coordination costs and knowledge this paper considers specialization and the division of labor a more extensive division of labor raises productivity because returns to the time spent on tasks are usually greater to workers who concentrate on a narrower range of skills the traditional discussion of the division of labor emphasizes the limitations to specialization imposed by the extent of the market we claim that the degree of specialization is more often determined by other considerations especially emphasized are various costs of coordinating specialized workers who perform complementary tasks and the amount of general knowledge available