nep-res New Economics Papers
on Resource Economics
Issue of 2013‒09‒28
five papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Ranking Distributions of Environmental Outcomes Across Population Groups By Glenn Sheriff; Kelly B. Maguire
  2. What do Environmental and Resource Economists Think? Results from a Survey of AERE Members By Timothy C. Haab; John C. Whitehead
  3. Modified Ramsey Discounting for Climate Change By Richard S.J. Tol
  4. Corruption, Entry and Pollution By Eleni Stathopoulou; Dimitrios Varvarigos
  5. Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK By Dennis Guignet; Anna Alberini

  1. By: Glenn Sheriff; Kelly B. Maguire
    Abstract: This paper develops methods for evaluating distributional impacts of alternative environmental policies across demographic groups. The income inequality literature provides a natural methodological toolbox for comparing distributions of environmental outcomes. We show that the most commonly used inequality indexes, such as the Atkinson index, have theoretical properties that make them inappropriate for analyzing bads, like pollution, as opposed to goods, like income. We develop a transformation of the Atkinson index suitable for analyzing bad outcomes. We also show how the rarely used Kolm-Pollak index is particularly convenient for ranking distributions of both good and bad health and environmental outcomes. We demonstrate these methods in the context of emissions standards affecting indoor air quality.
    Keywords: environmental justice, distributional analysis, inequality indexes, Lorenz curves, benefit-cost analysis
    JEL: D61 D63 Q52 Q56
    Date: 2013–08
  2. By: Timothy C. Haab; John C. Whitehead
    Abstract: In this paper we present results from an opinion survey of Association of Environmental and Resource Economists members concerning issues ranging from basic market failure propositions to current policy questions to environmental behavior. The topical issues considered span the discipline including air and water pollution, sustainability, fishery, forestry and energy economics. We use entropy analysis to determine issues where there is consensus and multivariate analysis of the determinants of opinions. We find that AERE members reach consensus on a number of items of opinion and there are a number of items for which consensus is more difficult to reach. We find that agreement with items of opinion is influenced by noneconomic factors: concern about the environment and natural resources, political ideology, gender, the number of children in the household and United States residence. Key Words:
    Date: 2013
  3. By: Richard S.J. Tol (Department of Economics, University of Sussex; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands)
    Abstract: The Ramsey rule for the consumption rate of discount assumes a transfer of money of a (representative) agent at one point in time to the same agent at another point in time. Climate policy (implicitly) transfers money not just over time but also between agents. I propose three alternative modifications of the Ramsey rule to account for this. Taking the Ramsey rule as given, I derive an intuitively clear but ad hoc modification. Using the assumptions underlying the Ramsey rule, I derive a consistent but more elaborate modification. If the discount rate is differentiated by victim, the consistent modified Ramsey rule is simpler and identical to regional equity weights. I apply the modified Ramsey rules to estimates of the marginal damage costs of carbon dioxide emissions. The results confirm that optimal climate policy has differentiated carbon taxes. Results also show that the standard Ramsey rule drastically underestimates the social cost of carbon.
    Keywords: Climate change, social cost of carbon, discount rate, Ramsey rule, equity
    JEL: H43 D63 Q54
    Date: 2013–09
  4. By: Eleni Stathopoulou; Dimitrios Varvarigos
    Abstract: We model an economy where imperfectly competitive firms choose whether to employ a dirty technology and pay an emission tax or employ a clean technology and incur the cost of its adoption. Bureaucrats who are entrusted with the task of monitoring the emissions of each firm, are corruptible in the sense that they may accept bribes in order to mislead authorities on the firms’ actual emissions. Market entry is an important element in the relation between corruption and pollution. Particularly, the incidence of corruption increases the number of entrants in the market, while the bureaucrats’ incentives to be corrupt are higher in a market with more competitors. We find multiple equilibria where both corruption and pollution are either high or low.
    Keywords: Corruption; Pollution; Market entry
    JEL: L13 Q53 Q58
    Date: 2013–09
  5. By: Dennis Guignet (National Center for Environmental Economics US Environmental Protection Agency); Anna Alberini (Department of Agricultural and Resource Economics University of Maryland, and Fondazione Eni Enrico Mattei, Venice)
    Abstract: Hedonic property value models are often used to place a value on localized amenities and disamenities. In practice, however, results may be affected by (i) omitted variable bias and (ii) whether homebuyers and sellers are aware of, and respond to, the assumed environmental measure. In this paper we undertake an alternative stated preference (SP) approach that eliminates the potential for unobserved confounders and where the measure of environmental quality is explicitly presented to respondents. We examine how homeowners in the United Kingdom and Italy value mortality risk reductions by asking them to choose among hypothetical variants of their home that differ in terms of mortality risks from air pollution and price. To our knowledge this is the first stated preference study examining respondents’ willingness to pay for properties using a quantitative and clearly specified measure of health risks. We find that Italian homeowners hold a value of a statistical life (VSL) of about €6.4 million, but UK homeowners tend to hold a much lower VSL (€2.1 million). This may be due to the fact that respondents in the UK do not perceive air pollution where they live to be as threatening, and actually live in cities with relatively low air pollution levels. Exploiting part of our experimental design, we find that Italian homeowners value a reduction in the risk of dying from cancer more than from other causes, but UK respondents do not hold such a premium. We also find that those who face higher baseline risks, due to higher air pollution levels where they live, hold a higher VSL, especially in the UK. In both countries, the VSL is twice as large among individuals who perceive air pollution where they live as relatively high.
    Keywords: Home Values, Air Pollution, Stated Preference, Vsl, Value of Statistical Life, Value of a Prevented Fatality, Health Risks, Cancer Premium
    Date: 2013–07

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