2005-03-20 papers

on Resource Economics

Issue of 2005‒03‒20
two papers chosen by

Non-Catastrophic Endogenous Growth and the Environmental Kuznets Curve By J. Aznar-Márquez; J. R. Ruiz-Tamarit
An Analysis of the Impact of Multiple Environmental Goods on House Prices By Katherine Kiel; Michael Williams

Non-Catastrophic Endogenous Growth and the Environmental Kuznets Curve

By:	J. Aznar-Márquez; J. R. Ruiz-Tamarit
Abstract:	The competitive equilibrium in an endogenous growth model is not Pareto-optimal nor environmentally sustainable in presence of pollution externalities, even if costly abatement activities are allowed to be endogenously decided. In this paper we introduce the possibility of an ecological catastrophe by imposing an upper-limit to the pollutants stock. We characterize the socially optimal solution and study sustainability of the long-run balanced growth path. We find that the rate of growth depends negatively on the weight of environmental cares in utility and positively on the population growth rate. The latter effect is stronger as higher is the weight of environment in the utility function. We also identify some policies the central planner could undertake looking to guarantee sustainability. An EKC is derived in the long term using the implications of the demographic transition for the rate of population growth, and the accompanying variation in the willingness to pay for environmental quality as the economy develops.
URL:	http://d.repec.org/n?u=RePEc:fda:fdaddt:2004-15&r=res

An Analysis of the Impact of Multiple Environmental Goods on House Prices

By:	Katherine Kiel (Department of Economics, College of the Holy Cross); Michael Williams (Department of Economics, College of the Holy Cross)
Abstract:	It seems an established empirical fact that Superfund sites lower local property values. Two recent literature reviews (Farber, 1998, Boyle and Kiel, 2001) report that published academic papers on the topic verify that point. The EPA’s approach assumes that all sites negatively impact property values, and that the impact is similar for all sites. This paper examines 74 National Priorities List (NPL) sites in 13 U.S. counties in order to test these two implicit assumptions. Following the hedonic approach of Kiel (1995) and Kiel and McClain (1995), we find that some sites have the expected negative impact, while other sites have either no impact or a positive impact on local property values. We also consider the possibility of ‘stigma’ from sites by looking at those sites that have been cleaned during our sample period and find that some sites do appear to suffer from stigma, while others do not. We then use a meta-analysis approach to examine what factors affect the likelihood and extent of a decrease in property values near the sites. We find that larger sites in areas with fewer blue-collar workers are more likely to have the expected negative impact on local house prices.
Keywords:	Environment, Superfund, Hedonic regressions, meta-analysis, property values
JEL:	Q51 Q53 Q58 R21
Date:	2005–03
URL:	http://d.repec.org/n?u=RePEc:hcx:wpaper:0505&r=res

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