Recreational fishing is among the most popular outdoor recreational activities in the world. However, uncertainty in angler response to changes in regulation has limited managers’ ability to prevent overfishing. We need to understand the heuristics anglers use to overcome informational and cognitive constraints that may limit their ability to assess stochastic attributes such as catch and environmental amenities. Using data from choice experiments, we specify and estimate preferences that rely on the theory of decision under unknown risks or ambiguity. We build on the observation that anglers interpret possession limits as targets or signals on stock productivity that anchor their expectations on retained catch, to specify a multiple prior model that relies on less onerous assumptions on anglers’ information and numeracy than conventional demand models. We integrate the economic submodel into a bioeconomic model to show that our specification provides better out-of-sample predictions than linear and CARA utility models.
{"title":"The Ambiguity of Fishing for Fun","authors":"J. Holzer, K. McConnell","doi":"10.1086/723495","DOIUrl":"https://doi.org/10.1086/723495","url":null,"abstract":"Recreational fishing is among the most popular outdoor recreational activities in the world. However, uncertainty in angler response to changes in regulation has limited managers’ ability to prevent overfishing. We need to understand the heuristics anglers use to overcome informational and cognitive constraints that may limit their ability to assess stochastic attributes such as catch and environmental amenities. Using data from choice experiments, we specify and estimate preferences that rely on the theory of decision under unknown risks or ambiguity. We build on the observation that anglers interpret possession limits as targets or signals on stock productivity that anchor their expectations on retained catch, to specify a multiple prior model that relies on less onerous assumptions on anglers’ information and numeracy than conventional demand models. We integrate the economic submodel into a bioeconomic model to show that our specification provides better out-of-sample predictions than linear and CARA utility models.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"865 - 901"},"PeriodicalIF":3.6,"publicationDate":"2022-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47027397","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The 1996 Safe Drinking Water Act Amendments required community water systems to disclose violations of drinking water standards to their customers in annual water quality reports. We explore the impact of three methods of disclosure on health-based drinking water quality violations using a matching and differences-in-differences framework with a national data set of drinking water quality violations from 1990 to 2001. We find that this information disclosure requirement reduced drinking water violations significantly and that the primary effect of disclosure on violations persists for at least four years after policy implementation. We find no evidence, however, that water systems trade these potentially more salient violation reductions for potentially less salient reductions in violations of other standards, nor do we find any evidence that water systems responded differentially to disclosure based on the demographic or political characteristics of their customers.
{"title":"Does Information Disclosure Reduce Drinking Water Violations in the United States?","authors":"J. Baker, Lori S. Bennear, Sheila M. Olmstead","doi":"10.1086/722619","DOIUrl":"https://doi.org/10.1086/722619","url":null,"abstract":"The 1996 Safe Drinking Water Act Amendments required community water systems to disclose violations of drinking water standards to their customers in annual water quality reports. We explore the impact of three methods of disclosure on health-based drinking water quality violations using a matching and differences-in-differences framework with a national data set of drinking water quality violations from 1990 to 2001. We find that this information disclosure requirement reduced drinking water violations significantly and that the primary effect of disclosure on violations persists for at least four years after policy implementation. We find no evidence, however, that water systems trade these potentially more salient violation reductions for potentially less salient reductions in violations of other standards, nor do we find any evidence that water systems responded differentially to disclosure based on the demographic or political characteristics of their customers.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"787 - 818"},"PeriodicalIF":3.6,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45141992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
How to design audit mechanisms that harness the benefits of self-reporting for achieving compliance with regulatory targets while limiting misreporting is a pressing question in many regulatory contexts, from climate policies to public health. Contrasting random audit and competitive audit mechanisms, this study theoretically and experimentally examines their performance in regulating socially undesirable emissions when peer information about others’ emissions is present or absent. Our focus is on the compliance of emission levels with regulatory targets, going beyond existing results on truthfulness of reporting. Confirming theoretical predictions, the experiment shows that in contrast to the random audit mechanism, the competitive audit mechanism can leverage peer information for compliance: emission levels are closer to the social optimum. Yet, emission levels fall somewhat short of full compliance. The results highlight the considerable potential of competitive audit mechanisms for achieving not only more truthfulness but also more compliance.
{"title":"Compliance and Truthfulness: Leveraging Peer Information with Competitive Audit Mechanisms","authors":"T. Goeschl, Marcel Oestreich, A. Soldá","doi":"10.1086/723110","DOIUrl":"https://doi.org/10.1086/723110","url":null,"abstract":"How to design audit mechanisms that harness the benefits of self-reporting for achieving compliance with regulatory targets while limiting misreporting is a pressing question in many regulatory contexts, from climate policies to public health. Contrasting random audit and competitive audit mechanisms, this study theoretically and experimentally examines their performance in regulating socially undesirable emissions when peer information about others’ emissions is present or absent. Our focus is on the compliance of emission levels with regulatory targets, going beyond existing results on truthfulness of reporting. Confirming theoretical predictions, the experiment shows that in contrast to the random audit mechanism, the competitive audit mechanism can leverage peer information for compliance: emission levels are closer to the social optimum. Yet, emission levels fall somewhat short of full compliance. The results highlight the considerable potential of competitive audit mechanisms for achieving not only more truthfulness but also more compliance.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"947 - 979"},"PeriodicalIF":3.6,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46465224","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Many recent US Congresses have proposed bills that allow state and local governments to restrict interjurisdictional waste shipments. Using data on intercounty waste flows in California and a random utility model of haulers’ decisions about where to deposit waste from each county, this study examines the economic costs of import bans and import taxes and the implications on the distribution of waste disposal by race (and ethnicity). I find that NIMBY-motivated laws would reduce intercounty waste transport at substantial economic cost. Furthermore, a NIMBY law enacted in a county, despite reducing the county’s imports, could increase total intercounty waste in the whole state, generating additional external costs of transportation. A universal import ban in all counties would reduce transboundary waste, but it would lead to substitution of waste away from facilities near white residents and toward facilities near Hispanic residents, exacerbating distributional concerns.
{"title":"The Costs and Environmental Justice Concerns of NIMBY in Solid Waste Disposal","authors":"Phuong Ho","doi":"10.1086/722613","DOIUrl":"https://doi.org/10.1086/722613","url":null,"abstract":"Many recent US Congresses have proposed bills that allow state and local governments to restrict interjurisdictional waste shipments. Using data on intercounty waste flows in California and a random utility model of haulers’ decisions about where to deposit waste from each county, this study examines the economic costs of import bans and import taxes and the implications on the distribution of waste disposal by race (and ethnicity). I find that NIMBY-motivated laws would reduce intercounty waste transport at substantial economic cost. Furthermore, a NIMBY law enacted in a county, despite reducing the county’s imports, could increase total intercounty waste in the whole state, generating additional external costs of transportation. A universal import ban in all counties would reduce transboundary waste, but it would lead to substitution of waste away from facilities near white residents and toward facilities near Hispanic residents, exacerbating distributional concerns.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"607 - 654"},"PeriodicalIF":3.6,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48639111","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate the potential for targeted treatment assignment rules to improve the performance of a large-scale behavioral intervention to encourage households to conserve energy. We derive treatment rules based on observable household characteristics that maximize the expected benefits of the intervention. Targeting treatment using transparent and easily implemented rules could yield significant gains; the energy savings from optimal treatment assignments are predicted to be double those achieved by the intervention as implemented. Predicted cost savings from targeting are even larger. Our results underscore the potential for targeted treatment assignment to generate significant benefits in many domains.
{"title":"Using Targeting to Optimize Program Design: Evidence from an Energy Conservation Experiment","authors":"Todd D. Gerarden, Muxi Yang","doi":"10.1086/722833","DOIUrl":"https://doi.org/10.1086/722833","url":null,"abstract":"We investigate the potential for targeted treatment assignment rules to improve the performance of a large-scale behavioral intervention to encourage households to conserve energy. We derive treatment rules based on observable household characteristics that maximize the expected benefits of the intervention. Targeting treatment using transparent and easily implemented rules could yield significant gains; the energy savings from optimal treatment assignments are predicted to be double those achieved by the intervention as implemented. Predicted cost savings from targeting are even larger. Our results underscore the potential for targeted treatment assignment to generate significant benefits in many domains.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"687 - 716"},"PeriodicalIF":3.6,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44991832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study investigates whether US senators are more likely to vote in favor of environmentally friendly legislation following damages caused by climate-related natural disasters. We combine senatorial scores of roll call votes on environmental legislation with modeled state-level human and economic natural disaster losses over a 44-year period. Our results show that support for environmental legislation increases in response to unusual human losses but does not respond to unusual economic losses. We also find that the documented response to natural disasters is two years and relatively short-lived. Geography, constituent partisanship, local economic conditions, and senatorial experience affect the magnitude and precision of the treatment effect.
{"title":"Climate-Related Natural Disasters and Voting Behavior: Evidence from Environmental Legislation in the US Senate","authors":"R. Elliott, Viet Nguyen-Tien, E. Strobl, T. Tveit","doi":"10.1086/722540","DOIUrl":"https://doi.org/10.1086/722540","url":null,"abstract":"This study investigates whether US senators are more likely to vote in favor of environmentally friendly legislation following damages caused by climate-related natural disasters. We combine senatorial scores of roll call votes on environmental legislation with modeled state-level human and economic natural disaster losses over a 44-year period. Our results show that support for environmental legislation increases in response to unusual human losses but does not respond to unusual economic losses. We also find that the documented response to natural disasters is two years and relatively short-lived. Geography, constituent partisanship, local economic conditions, and senatorial experience affect the magnitude and precision of the treatment effect.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"753 - 786"},"PeriodicalIF":3.6,"publicationDate":"2022-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42482829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Weitzman’s “dismal theorem” has that the expected net present value of a stock problem with a stochastic growth rate with unknown variance is unbounded. Cost-benefit analysis can therefore not be applied to greenhouse gas emission control. We use the generalized central limit theorem to show that the dismal theorem can be tested, in a finite sample, by estimating the tail index. We apply this test to social cost of carbon estimates from three commonly used integrated assessment models and to previously published estimates. Two of the three models do not support the dismal theorem, but the third one does for low discount rates and most estimators. The meta-analysis does offer qualified support for the dismal theorem.
{"title":"Testing the Dismal Theorem","authors":"D. Anthoff, R. Tol","doi":"10.1086/720612","DOIUrl":"https://doi.org/10.1086/720612","url":null,"abstract":"Weitzman’s “dismal theorem” has that the expected net present value of a stock problem with a stochastic growth rate with unknown variance is unbounded. Cost-benefit analysis can therefore not be applied to greenhouse gas emission control. We use the generalized central limit theorem to show that the dismal theorem can be tested, in a finite sample, by estimating the tail index. We apply this test to social cost of carbon estimates from three commonly used integrated assessment models and to previously published estimates. Two of the three models do not support the dismal theorem, but the third one does for low discount rates and most estimators. The meta-analysis does offer qualified support for the dismal theorem.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"9 1","pages":"885 - 920"},"PeriodicalIF":3.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49053878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop a discounting rule for estimating the social cost of carbon (SCC) given uncertain economic growth. Diminishing marginal utility of income implies a relationship between the discount rate term structure and economic growth uncertainty. In the classic Ramsey framework, this relationship is governed by parameters reflecting pure time preference and the elasticity of the marginal utility of consumption, yet disagreement remains about the values of these parameters. We calibrate these parameters to match empirical evidence on both the future interest rate term structure and economic growth uncertainty, while also maintaining consistency with discount rates used for shorter-term benefit-cost analysis. Such an integrated approach is crucial amid growth uncertainty, where growth is also a key determinant of climate damages. This results in an empirically driven, stochastic discounting rule to be used in estimating the SCC that also accounts for the correlation between climate damage estimates and discount rates.
{"title":"A Discounting Rule for the Social Cost of Carbon","authors":"R. Newell, W. Pizer, Brian C. Prest","doi":"10.1086/718145","DOIUrl":"https://doi.org/10.1086/718145","url":null,"abstract":"We develop a discounting rule for estimating the social cost of carbon (SCC) given uncertain economic growth. Diminishing marginal utility of income implies a relationship between the discount rate term structure and economic growth uncertainty. In the classic Ramsey framework, this relationship is governed by parameters reflecting pure time preference and the elasticity of the marginal utility of consumption, yet disagreement remains about the values of these parameters. We calibrate these parameters to match empirical evidence on both the future interest rate term structure and economic growth uncertainty, while also maintaining consistency with discount rates used for shorter-term benefit-cost analysis. Such an integrated approach is crucial amid growth uncertainty, where growth is also a key determinant of climate damages. This results in an empirically driven, stochastic discounting rule to be used in estimating the SCC that also accounts for the correlation between climate damage estimates and discount rates.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"9 1","pages":"1017 - 1046"},"PeriodicalIF":3.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44978856","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
THIS SPECIAL ISSUE IS A REMINDER that the world lost a truly remarkable scholar when Martin Weitzman sadly passed away in 2019. Across five decades, he explored policy options for the most challenging issues—from unemployment and inflation in the 1970s to climate change in the twenty-first century. In this article, we provide a brief biography and personal remembrance of Weitzman and describe how his contributions advanced the thinking of environmental economists, and the thoughts and actions of policy makers on many fundamental issues. We conclude with a brief description of the articles that follow in this issue. Weitzman was a treasure—a gift that kept on giving to the research and policy worlds—for Harvard University, for economists around the world, and for the global intellectual community. His work as an economic theorist who addressed a broad set of problems, and as an environmental economist who for over a decade focused on climate change, was unparalleled and formed the basis for theoretical and empirical work carried out by legions of economists and other scholars around the world. Weitzman’s contributions to environmental economics in particular were unprecedented, helped to shape the field for nearly five decades, and as the papers in this volume show undoubtedly set the direction for many more years to come. If economic theory is about stripping a problem down to its absolute essentials and deriving meaningful insights from those essentials, thenWeitzman was a master. Over and over again, he demonstrated how careful and rigorous analysis of artfully constructed
{"title":"Martin Weitzman: A Gift That Keeps on Giving","authors":"Robert Stavins, Gernot Wagner","doi":"10.1086/721093","DOIUrl":"https://doi.org/10.1086/721093","url":null,"abstract":"THIS SPECIAL ISSUE IS A REMINDER that the world lost a truly remarkable scholar when Martin Weitzman sadly passed away in 2019. Across five decades, he explored policy options for the most challenging issues—from unemployment and inflation in the 1970s to climate change in the twenty-first century. In this article, we provide a brief biography and personal remembrance of Weitzman and describe how his contributions advanced the thinking of environmental economists, and the thoughts and actions of policy makers on many fundamental issues. We conclude with a brief description of the articles that follow in this issue. Weitzman was a treasure—a gift that kept on giving to the research and policy worlds—for Harvard University, for economists around the world, and for the global intellectual community. His work as an economic theorist who addressed a broad set of problems, and as an environmental economist who for over a decade focused on climate change, was unparalleled and formed the basis for theoretical and empirical work carried out by legions of economists and other scholars around the world. Weitzman’s contributions to environmental economics in particular were unprecedented, helped to shape the field for nearly five decades, and as the papers in this volume show undoubtedly set the direction for many more years to come. If economic theory is about stripping a problem down to its absolute essentials and deriving meaningful insights from those essentials, thenWeitzman was a master. Over and over again, he demonstrated how careful and rigorous analysis of artfully constructed","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"9 1","pages":"843 - 850"},"PeriodicalIF":3.6,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43988597","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop a novel analysis of climate change and policy regarding climate damages to growth under regional cooperation or noncooperation. We introduce a new stylized climate module and compute the regional social cost of carbon (SCC) when climate change impacts the growth rate of regional GDP under cooperation and noncooperation between regions. We find that in the presence of climate damage to economic growth, the regional SCC is high in either a cooperative or a noncooperative world, implying that it is optimal for each region to choose stringent climate policies. Moreover, relative to cooperation, noncooperation reduces the GDP of countries in both high northern latitudes and the tropics, while the loss for developing countries in the tropics is especially significant. The welfare losses to the tropics are larger still in the absence of compensatory transfers from wealthier regions most responsible for climate change.
{"title":"Climate Change Impact on Economic Growth: Regional Climate Policy under Cooperation and Noncooperation","authors":"Y. Cai, William Brock, A. Xepapadeas","doi":"10.1086/722274","DOIUrl":"https://doi.org/10.1086/722274","url":null,"abstract":"We develop a novel analysis of climate change and policy regarding climate damages to growth under regional cooperation or noncooperation. We introduce a new stylized climate module and compute the regional social cost of carbon (SCC) when climate change impacts the growth rate of regional GDP under cooperation and noncooperation between regions. We find that in the presence of climate damage to economic growth, the regional SCC is high in either a cooperative or a noncooperative world, implying that it is optimal for each region to choose stringent climate policies. Moreover, relative to cooperation, noncooperation reduces the GDP of countries in both high northern latitudes and the tropics, while the loss for developing countries in the tropics is especially significant. The welfare losses to the tropics are larger still in the absence of compensatory transfers from wealthier regions most responsible for climate change.","PeriodicalId":47114,"journal":{"name":"Journal of the Association of Environmental and Resource Economists","volume":"10 1","pages":"569 - 605"},"PeriodicalIF":3.6,"publicationDate":"2022-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41937565","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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