nep-res New Economics Papers
on Resource Economics
Issue of 2017‒09‒03
three papers chosen by

  1. Balancing Development and the Environment in a Changing World: Expressways, GDP, and Pollution in China By Guojun He; Yang Xie; Bing Zhang
  2. Cycling tolls and optimal number of bus stops: the importance of congestion and crowding By Börjesson, Maria; Fung, Chau Man; Proost, Stef; Yan, Zifei
  3. Product Quality and Sustainability: The Effect of International Environmental Agreements on Bilateral Trade By Stefan Borsky; Andrea Leiter; Michael Pfaffermayr

  1. By: Guojun He (Division of Social Sciencee, Division of Environment, and Department of Economics, The Hong Kong University of Science and Technology); Yang Xie (Department of Economic, University of California, Riverside); Bing Zhang (Center for Environmental Management and Policy Analysis, School of Environment, Nanjing University)
    Abstract: When productivity changes, how would an economy rebalance economic production and environmental preservation? We develop a conceptual framework to analyze the question, and predict that a productivity shock can have heterogeneous impacts on environmental quality and income. Exploiting a quasi-experiment provided by the dramatic expansion of China’s national expressway system, we find empirical evidence that is consistent with the model’s predictions: expressway access increases both pollution and GDP in initially poor counties, decreases pollution and GDP in initially rich counties, and decreases pollution while increasing GDP in counties with moderate levels of initial income. These findings cannot be fully explained by alternative theories such as the pollution haven hypothesis and home market effect.
    Date: 2017–08
  2. By: Börjesson, Maria (KTH); Fung, Chau Man (Katholieke Universiteit Leuven); Proost, Stef (Katholieke Universiteit Leuven); Yan, Zifei (KTH)
    Abstract: This paper optimises the number of bus stops, and prices for car, bus and cycling in the busiest inner city corridor in Stockholm. We find that the number of bus stops is already close to optimal. Welfare would increase if the peak frequency was increased, the bus fares were differentiated such that short trips paid less than the current rate, and that the toll for longer car trips was increased. The optimal toll for cyclists, and the welfare benefit from it, is small and does not compensate the transaction costs. The distributional effects of bus fare changes and higher car tolls are small because on one hand, high income groups place more value on travel time gains, but on the other hand, low income groups travel less frequently by car. Surprisingly, we find that in the welfare optimum, the bus service generates a surplus due to congestion in the bus lane, crowding in the buses, and extra boarding and alighting time per passenger. The Mohring effect is limited because the demand, and thereby the baseline frequency, is already high.
    Keywords: Public transport; Cycling; Bus stops; Congestion; Optimal pricing of urban transport
    JEL: R41 R48
    Date: 2017–08–21
  3. By: Stefan Borsky (University of Graz); Andrea Leiter (University of Innsbruck); Michael Pfaffermayr (University of Innsbruck)
    Abstract: This paper addresses the impact of sustainability in production on international trade. In particular, it examines the effect of the International Tropical Timber Agreement (ITTA) on tropical timber trade. The empirical analysis is based on a gravity equation in a difference-in-difference setting, which is estimated by a panel Heckman's selection model. This accounts for the potentially systematic selection of trading partners into timber trade activity. We then conduct a comprehensive comparative static analysis solving the structural gravity model with and without the ITTA. This allows us to determine the trade impact of an ITTA induced increase in sustainability for participating as well as for third-countries. We find that countries participating in the ITTA exhibit a significant and substantial increase in trade intensity ranging from 4% to 6%. Furthermore, we observe that this effect is more pronounced for smaller member countries. Non-ITTA countries are confronted with reduced tropical timber flows.
    Keywords: Sustainable production standards; Product quality; Gravity equation; Panel sample selection
    JEL: Q27 F18 L15 O19 Q23
    Date: 2017–07

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.