nep-res New Economics Papers
on Resource Economics
Issue of 2020‒03‒09
three papers chosen by
Maximo Rossi
Universidad de la República

  1. The Impact of Air Pollution on Attributable Risks and Economic Costs of Hospitalization for Mental Disorders By Wu, Ziting; Chen, Xi; Li, Guoxing; Tian, Lin; Wang, Zhan; Xiong, Xiuqin; Yang, Chuan; Zhou, Zijun; Pan, Xiaochuan
  2. Structural change in a small natural resource intensive economy. Switching between diversification and re-primarization By Carolina Román; Henry Willebald
  3. Fundamental utilitarianism and intergenerational equity with extinction discounting By Chichilnisky, Graciela; Hammond, Peter J.; Stern, Nicholas

  1. By: Wu, Ziting (Peking University); Chen, Xi (Yale University); Li, Guoxing (Peking University); Tian, Lin (Peking University); Wang, Zhan (Peking University); Xiong, Xiuqin (Peking University); Yang, Chuan (Peking University); Zhou, Zijun (Peking University); Pan, Xiaochuan (Peking University)
    Abstract: This study aims to fill the gap in our understanding about exposure to particulate matters with diameter less than 2.5 μm (PM2.5) and attributable risks and economic costs of mental disorders (MDs). We identify the relationship between PM2.5 and risk of hospital admissions (HAs) for MDs in Beijing and measure the attributable risk and economic cost. We apply a generalized additive model (GAM) with controls for time trend, meteorological conditions, holidays and day of the week. Stratified analyses are performed by age, gender and season. We further estimate health and economic burden of HAs for MDs attributable to PM2.5. A total of 17,252 HAs for MDs are collected. We show that PM2.5 accounts for substantial morbidity and economic burden of MDs. Specifically, a 10 μg/m3 daily increase in PM2.5 is associated with a 3.55% increase in the risk of HAs for MDs, and the effect is more pronounced for older males in colder weather. According to the WHO's air quality guidelines, 15.12 percent of HAs and 16.19 percent of related medical expenses for MDs are respectively attributable to PM2.5.
    Keywords: attributable risk, economic cost, hospital admissions, mental disorders, PM2.5
    JEL: Q51 Q53 I24 I31 G11 J24
    Date: 2020–02
  2. By: Carolina Román (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: The increasing interest in economic diversification, technological sophistication and production specialization again place structural change at the centre of the analytical and empirical scene of economic development theory. However, efforts to measure structural change from a long-run perspective remain scarce. We aim to fill this gap using a synthetic indicator, based on a trigonometric approach, that represents the dynamics of structural change in the long run and allow us to identify different development patterns. We calculate this indicator including information of thirteen production sectors, for a small natural-resource intensive economy (Uruguay), over 1870-2017. Our results adequately describe the different development patterns that, according to the literature, characterize Uruguayan economic history. In the long run, economic growth causes structural change; only the First Globalization period has the opposite relation. In addition to this, the evolution of our indicator provides other interesting insights. The decline of the index –which indicates “backward movements” in the production structure– is found in periods of economic crisis and downturn cycles. This dynamic reflects critical time periods associated with the (relative) primarization of the economy. In other words, it seems evident that near to each crisis episode, the economy reacted by going back to primary production probably due to looking for traditional comparative advantages or because in such negative phases the weakest and most exposed sectors were those other than agriculture.
    Keywords: structural change, long-run economic patterns, primarization, Uruguay
    JEL: N16 O11 O47
    Date: 2019–12
  3. By: Chichilnisky, Graciela; Hammond, Peter J.; Stern, Nicholas
    Abstract: Ramsey famously condemned discounting “future enjoyments” as “ethically indefensible”. Suppes enunciated an equity criterion which, when social choice is utilitarian, implies giving equal weight to all individuals’ utilities. By contrast, Arrow (Contemporary economic issues. International Economic Association Series. Palgrave Macmillan, London, 1999a; Discounting and Intergenerational Effects, Resources for the Future Press, Washington DC, 1999b) accepted, perhaps reluctantly, what he called Koopmans’ (Econometrica 28(2):287–309, 1960) “strong argument” implying that no equitable preference ordering exists for a sufficiently unrestricted domain of infinite utility streams. Here we derive an equitable utilitarian objective for a finite population based on a version of the Vickrey–Harsanyi original position, where there is an equal probability of becoming each person. For a potentially infinite population facing an exogenous stochastic process of extinction, an equitable extinction biased original position requires equal conditional probabilities, given that the individual’s generation survives the extinction process. Such a position is well-defined if and only if survival probabilities decline fast enough for the expected total number of individuals who can ever live to be finite. Then, provided that each individual’s utility is bounded both above and below, maximizing expected “extinction discounted” total utility—as advocated, inter alia, by the Stern Review on climate change—provides a coherent and dynamically consistent equitable objective, even when the population size of each generation can be chosen.
    JEL: J1
    Date: 2020–01–23

This nep-res issue is ©2020 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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.