nep-res New Economics Papers
on Resource Economics
Issue of 2021‒04‒26
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Colluding Against Environmental Regulation By Ale-Chilet, Jorge; Chen, Cuicui; Li, Jing; Reynaert, Mathias
  2. Do temperature shocks affect non-agriculture wages in Brazil? Evidence from individual-level panel data By Jaqueline Oliveira; Bruno Palialol, Paula Pereda
  3. Pandemic-induced de-urbanisation in Indonesia By Peter Warr; Arief Anshory Yusuf
  4. Pollution in times of economic uncertainty: A perverse tragedy of the commons? By Ramón E. López; Roberto Pastén; Pablo Gutiérrez C.

  1. By: Ale-Chilet, Jorge; Chen, Cuicui; Li, Jing; Reynaert, Mathias
    Abstract: We study collusion among rms in response to imperfectly monitored environmental regulation. Firms improve market prots by shading pollution and evade noncompliance penalties by shading jointly. We quantify the welfare eects of alleged collusion among three German automakers to reduce the size of diesel exhaust uid (DEF) tanks, an emission control technology used to comply with air pollution standards. We develop a structural model of the European automobile industry (2007-2018), where smaller DEF tanks create more pollution damages, but improve buyer and producer surplus by freeing up valuable trunk space and reducing production costs. We nd that choosing small DEF tanks jointly reduced the automakers' expected noncompliance penalties by at least 560 million euros. Antitrust and noncompliance penalties would reach between 1.46 and 14.63 billion euros to remedy the welfare damages of the alleged collusion.
    Date: 2021
  2. By: Jaqueline Oliveira; Bruno Palialol, Paula Pereda
    Abstract: The relationship between temperature and agriculture outcomes in Brazil has been widely explored, overlooking that most of the country's labor force is employed in nonagriculture sectors. We use monthly individual-level panel data spanning January 2015 to December 2016 to ask whether temperature shocks impact non-agriculture wages in formal labor markets. Our results show that a 1oC shock increases wages where climate are colder, but reduces wages where climate are hotter. We calculate that wages fall 0.42% on average, an income loss equivalent to 0.06% of GDP annually. Assuming future temperatures rise uniformly by 2oC, and that no adaptation occurs, we expect annual income losses five times larger. The heterogeneous effects we find also suggest that weather vulnerability may deepen existing income inequalities.
    Keywords: temperature shocks; labor productivity; nominal wage exibility; non-agriculture sector; formal labor markets
    JEL: C23 J24 Q54
    Date: 2021–04–14
  3. By: Peter Warr; Arief Anshory Yusuf
    Abstract: The COVID-19 pandemic has affected Indonesia severely. It was initially an urban event, but the loss of urban jobs has induced a large urban to rural migration, which we call de-urbanisation. This phenomenon temporarily reversed the long-term process of rural to urban reallocation of labour. In early 2021 the approximate size of this de-urbanisation was known, but not its effects. This paper analyses the general equilibrium consequences of this overlooked feature of the pandemic. The analysis shows that taking deurbanisation into account, the negative economic impact of the pandemic is largest among rural, not urban households, especially the poorest.
    Keywords: De-industrialisation; Indonesia; COVID-19; structural change; rural poverty; urban poverty; inequality.
    JEL: I15 O12 O53
    Date: 2021
  4. By: Ramón E. López; Roberto Pastén; Pablo Gutiérrez C.
    Abstract: We explore the effects of economic uncertainty on environmental pollution. We show conditions under which an increase of economic uncertainty raises pollution. The results depend on the consumers’ level of risk aversion and prudence behavior, as well as on the elasticity of substitution between pollution and conventional inputs. Under several widely used specifications for preferences and production technologies, we show that, given available empirical evidence about the parameters characterizing these specifications, a damning vicious cycle between increasing economic uncertainty and pollution is likely to occur.
    Date: 2020–08

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