nep-res New Economics Papers
on Resource Economics
Issue of 2018‒07‒16
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Climate change and agriculture: farmer adaptation to extreme heat By Fernando M. Aragón; Francisco Oteiza; Juan Pablo Rud
  2. International Environmental Agreements - The Impact of Heterogeneity among Countries on Stability By Effrosyni Diamantoudi; Eftichios Sartzetakis; Stefania Strantza
  3. The effect of air quality on welfare accounting By Almut Balleer; Morten Endrikat

  1. By: Fernando M. Aragón (Institute for Fiscal Studies); Francisco Oteiza (Institute for Fiscal Studies and EDePo @ Institute for Fiscal Studies); Juan Pablo Rud (Institute for Fiscal Studies and Royal Holloway)
    Abstract: This paper examines how farmers adapt, in the short-run, to extreme heat. Using a production function approach and micro-data from Peruvian households, we find that high temperatures induce farmers to increase the use of inputs, such as land and domestic labor. This reaction partially attenuates the negative effects of high temperatures on output. We interpret this change in inputs as an adaptive response in a context of subsistence farming, incomplete markets, and lack of other coping mechanisms. We use our estimates to simulate alternative climate change scenarios and show that accounting for adaptive responses is quantitatively important.
    JEL: O13 O12 Q12 Q15 Q51 Q54
    Date: 2018–02–23
  2. By: Effrosyni Diamantoudi (Department of Economics, Concordia University); Eftichios Sartzetakis (Department of Economics, University of Macedonia); Stefania Strantza (Department of Economics, Concordia University)
    Abstract: The present paper examines the stability of self-enforcing International Environmental Agreements (IEAs) among heterogeneous countries in a twostage emission game. In the first stage each country decides whether or not to join the agreement, while in the second stage the quantity of emissions is chosen simultaneously by all countries. We use quadratic benefit and environmental damage functions and assume k types of countries that differ in their sensitivity to the global pollutant. We find that the introduction of heterogeneity does not yield larger stable coalitions. In particular, we show that, in the case of two types, when stable coalitions exist their size is very small, and, if the asymmetry is strong enough, they include only one type of countries. Moreover, heterogeneity can reduce the scope of cooperation relative to the homogeneous case. We demonstrated that introducing asymmetry into a stable, under symmetry, agreement can disturb stability.
    Keywords: Environmental Agreements
    JEL: D6 Q5 C7
    Date: 2018–07
  3. By: Almut Balleer (RWTH Aachen University, School of Business and Economics); Morten Endrikat (RWTH Aachen University, School of Business and Economics)
    Abstract: For several decades, there has been a discussion in economics on how to appropriately measure economic welfare. Although it is common perception that a simple GDP evaluation bears several shortcomings, GDP per capita is still the most prominent measure of countries’ welfare and of its development over time. In a recent paper, Jones and Klenow (2016) extend the huge existing literature on alternative welfare measures by a concept that is based on a utility framework and that incorporates, besides consumption, also life expectancy, inequality, and leisure. In this paper, we add a component of environmental quality, in particular air pollution, to this framework and show that for some country groups accounting for air quality remarkably changes their relative welfare position, both in terms of levels and growth rates over time. Especially for some emerging countries we find strong welfare reductions due to high levels of air pollution. Nevertheless, on average, our welfare measure is still highly correlated with GDP per capita. Our results highlight the importance of environmental aspects in welfare accounting.
    Keywords: Economic Welfare, Economic Development, Air Pollution, Environmental Economics
    JEL: D63 I12 O54 O57 Q53 Q56
    Date: 2018

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