Leveraging China's distinctive Green Factory Program, we analyse investment data from publicly listed companies and securities funds to assess how voluntary environmental regulations influence the behaviour of green investors. Our findings indicate that the program significantly increased both the number and proportion of green investors attracted to participating firms. The observed effects are driven by several key mechanisms: reduced environmental information asymmetry, enhanced government incentives, improved market performance, and better risk management facilitated by the program. Additional analysis reveals that the impact is especially pronounced among firms with lower environmental sensitivity and less media scrutiny, as well as in regions facing stronger environmental governance challenges and legal risks. Overall, our study provides robust evidence that voluntary environmental regulations can meaningfully shape the investment decisions of green investors.
{"title":"Government-guided voluntary environmental regulations and the entry of green investors: Evidence from the Chinese green factory program","authors":"Xinze Li , Jiayin Zhu , Qiuyun Zhao , Gaofei Zhang , Yuan Gao","doi":"10.1016/j.reseneeco.2025.101530","DOIUrl":"10.1016/j.reseneeco.2025.101530","url":null,"abstract":"<div><div>Leveraging China's distinctive Green Factory Program, we analyse investment data from publicly listed companies and securities funds to assess how voluntary environmental regulations influence the behaviour of green investors. Our findings indicate that the program significantly increased both the number and proportion of green investors attracted to participating firms. The observed effects are driven by several key mechanisms: reduced environmental information asymmetry, enhanced government incentives, improved market performance, and better risk management facilitated by the program. Additional analysis reveals that the impact is especially pronounced among firms with lower environmental sensitivity and less media scrutiny, as well as in regions facing stronger environmental governance challenges and legal risks. Overall, our study provides robust evidence that voluntary environmental regulations can meaningfully shape the investment decisions of green investors.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101530"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144864733","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}
Pub Date : 2025-12-01Epub Date: 2025-08-19DOI: 10.1016/j.reseneeco.2025.101535
Oliver Becker, Tobias Börger, Jürgen Meyerhoff
Destination choice modeling is challenging as the number of feasible sites is often very large. Sampling of alternatives has been used successfully to make large choice sets manageable and yields consistent estimates under certain conditions. However, the specific structure of destination choice data has rarely been addressed explicitly. Besides large numbers of alternatives, it is characterized by a skewed distribution of travel costs with few low-cost nearby sites and a disproportionate increase in alternatives with distance. In this paper, we investigate how this characteristic travel cost structure affects the quality of destination choice models estimated on samples of alternatives. Comparing uniform and strategic sampling (Lemp and Kockelman, 2012), we find that (i) strategic sampling reduces bias and improves efficiency relative to uniform sampling, (ii) sampling performance generally declines with stronger travel cost sensitivity, and (iii) the gains from strategic sampling increase as travel cost sensitivity becomes stronger. For multinomial logit, strategic sampling yields high levels of accuracy and precision when drawing as few as 10 out of 20,000 alternatives. For mixed logit, bias is higher, while the protocol still offers substantial performance gains. After presenting Monte Carlo evidence, we apply both sampling approaches to a nationwide freshwater recreation dataset and examine their impact on welfare estimates for two policy scenarios, as well as on bias and efficiency.
{"title":"Sampling of alternatives in spatial decision contexts with logit and logit mixture models: Simulation and application to freshwater recreation in Germany","authors":"Oliver Becker, Tobias Börger, Jürgen Meyerhoff","doi":"10.1016/j.reseneeco.2025.101535","DOIUrl":"10.1016/j.reseneeco.2025.101535","url":null,"abstract":"<div><div>Destination choice modeling is challenging as the number of feasible sites is often very large. Sampling of alternatives has been used successfully to make large choice sets manageable and yields consistent estimates under certain conditions. However, the specific structure of destination choice data has rarely been addressed explicitly. Besides large numbers of alternatives, it is characterized by a skewed distribution of travel costs with few low-cost nearby sites and a disproportionate increase in alternatives with distance. In this paper, we investigate how this characteristic travel cost structure affects the quality of destination choice models estimated on samples of alternatives. Comparing uniform and strategic sampling (Lemp and Kockelman, 2012), we find that (i) strategic sampling reduces bias and improves efficiency relative to uniform sampling, (ii) sampling performance generally declines with stronger travel cost sensitivity, and (iii) the gains from strategic sampling increase as travel cost sensitivity becomes stronger. For multinomial logit, strategic sampling yields high levels of accuracy and precision when drawing as few as 10 out of 20,000 alternatives. For mixed logit, bias is higher, while the protocol still offers substantial performance gains. After presenting Monte Carlo evidence, we apply both sampling approaches to a nationwide freshwater recreation dataset and examine their impact on welfare estimates for two policy scenarios, as well as on bias and efficiency.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101535"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144912653","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}
Pub Date : 2025-12-01Epub Date: 2025-08-18DOI: 10.1016/j.reseneeco.2025.101534
Huu-Luat Do , Todd L. Cherry
The use of biodegradable fishing gear is increasingly seen as a way to mitigate the negative impacts associated with abandoned, lost, or otherwise discarded fishing gear (ALDFG), often referred to as “ghost gear”. However, a major concern with such an environmentally friendly technique is its potential to reduce catch efficiency due to its degradable characteristics, which may diminish competitiveness. To contribute to the limited empirical evidence, we conducted a survey experiment to investigate how the effectiveness of biodegradable gear, compared to conventional fishing gear, influences the adoption by Norwegian fishers. Our findings reveal that fishers are willing to adopt biodegradable fishing gear without conditions if its catch efficiency is comparable to conventional gear. We consider alternative adoption conditions and find that, as the relative efficiency of biodegradable gear decreases, the individual adoption decision becomes more conditional on other fishers doing so. These findings suggest that strategic concerns make conditional adoption important to widespread use of biodegradable gear. Specifically, adoption depends on improving the relative catch efficiency of biodegradable gear or implementing policies that lead to widespread adoption. Results indicates that marine environment protection concerns drive adoption, while economic concerns drive opposition.
{"title":"Ghost fishing and the voluntary adoption of biodegradable gear","authors":"Huu-Luat Do , Todd L. Cherry","doi":"10.1016/j.reseneeco.2025.101534","DOIUrl":"10.1016/j.reseneeco.2025.101534","url":null,"abstract":"<div><div>The use of biodegradable fishing gear is increasingly seen as a way to mitigate the negative impacts associated with abandoned, lost, or otherwise discarded fishing gear (ALDFG), often referred to as “ghost gear”. However, a major concern with such an environmentally friendly technique is its potential to reduce catch efficiency due to its degradable characteristics, which may diminish competitiveness. To contribute to the limited empirical evidence, we conducted a survey experiment to investigate how the effectiveness of biodegradable gear, compared to conventional fishing gear, influences the adoption by Norwegian fishers. Our findings reveal that fishers are willing to adopt biodegradable fishing gear without conditions if its catch efficiency is comparable to conventional gear. We consider alternative adoption conditions and find that, as the relative efficiency of biodegradable gear decreases, the individual adoption decision becomes more conditional on other fishers doing so. These findings suggest that strategic concerns make conditional adoption important to widespread use of biodegradable gear. Specifically, adoption depends on improving the relative catch efficiency of biodegradable gear or implementing policies that lead to widespread adoption. Results indicates that marine environment protection concerns drive adoption, while economic concerns drive opposition.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101534"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144890245","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}
Storm is a major risk in forestry. However, due to the more or less pessimistic scenarios of future climate change, storm frequency is now ambiguous and only partially known (i.e., scenario ambiguity). Furthermore, within each scenario, the quantification of storm frequency is also ambiguous due to the differences in risk quantification by experts, creating a second level of ambiguity (i.e., frequency ambiguity). In such an ambiguous context, knowledge of the future climate through accurate information about this risk is fundamental and can be of significant value. In this paper, we question how ambiguity and ambiguity aversion affect forest management, in particular, optimal cutting age. Using a classical Faustmann framework of forest rotation decisions, we compare three different situations: risk, scenario ambiguity and frequency ambiguity. We show that in a context of risk or scenario ambiguity, a forest owner characterized by risk aversion and ambiguity aversion reduces the optimal cutting age, whereas in a context of frequency ambiguity the owner does not change it. The optimal cutting age is always reduced when risk aversion increases, whereas an increase in ambiguity aversion never has an impact. The value of information that resolves scenario ambiguity is low and it is almost null for frequency ambiguity.
{"title":"Ambiguity, value of information and forest rotation decision under storm risk","authors":"Patrice Loisel , Marielle Brunette , Stéphane Couture","doi":"10.1016/j.reseneeco.2025.101536","DOIUrl":"10.1016/j.reseneeco.2025.101536","url":null,"abstract":"<div><div>Storm is a major risk in forestry. However, due to the more or less pessimistic scenarios of future climate change, storm frequency is now ambiguous and only partially known (i.e., scenario ambiguity). Furthermore, within each scenario, the quantification of storm frequency is also ambiguous due to the differences in risk quantification by experts, creating a second level of ambiguity (i.e., frequency ambiguity). In such an ambiguous context, knowledge of the future climate through accurate information about this risk is fundamental and can be of significant value. In this paper, we question how ambiguity and ambiguity aversion affect forest management, in particular, optimal cutting age. Using a classical Faustmann framework of forest rotation decisions, we compare three different situations: risk, scenario ambiguity and frequency ambiguity. We show that in a context of risk or scenario ambiguity, a forest owner characterized by risk aversion and ambiguity aversion reduces the optimal cutting age, whereas in a context of frequency ambiguity the owner does not change it. The optimal cutting age is always reduced when risk aversion increases, whereas an increase in ambiguity aversion never has an impact. The value of information that resolves scenario ambiguity is low and it is almost null for frequency ambiguity.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101536"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145266205","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}
Pub Date : 2025-12-01Epub Date: 2025-10-24DOI: 10.1016/j.reseneeco.2025.101538
Scott Behmer
There is an active debate among economists on the value of using clean energy subsidies to address climate change. However, the models used to inform this debate typically make a common simplifying assumption: the preferences of the government are kept constant over time. In reality, control of the government often rotates between parties with very different policy preferences. This paper finds that adding turnover in party control of the government can have significant implications. Specifically, when the two parties are sufficiently polarized, the party more concerned about the environment (“the green party”) finds it optimal to subsidize irreversible investments in clean energy, even when carbon taxes are available and can be placed at any level. We then provide quantitative evidence on the green party’s optimal subsidy using two approaches: sufficient statistic estimation and a calibration exercise. The results suggest that the optimal subsidy is quantitatively significant, between 5% and 17% of the cost of investment. Furthermore, if the green party naively uses just a carbon tax, clean investment is 34% lower than when they use their optimal subsidy.
{"title":"Sticks vs carrots: Climate policy under government turnover","authors":"Scott Behmer","doi":"10.1016/j.reseneeco.2025.101538","DOIUrl":"10.1016/j.reseneeco.2025.101538","url":null,"abstract":"<div><div>There is an active debate among economists on the value of using clean energy subsidies to address climate change. However, the models used to inform this debate typically make a common simplifying assumption: the preferences of the government are kept constant over time. In reality, control of the government often rotates between parties with very different policy preferences. This paper finds that adding turnover in party control of the government can have significant implications. Specifically, when the two parties are sufficiently polarized, the party more concerned about the environment (“the green party”) finds it optimal to subsidize irreversible investments in clean energy, even when carbon taxes are available and can be placed at any level. We then provide quantitative evidence on the green party’s optimal subsidy using two approaches: sufficient statistic estimation and a calibration exercise. The results suggest that the optimal subsidy is quantitatively significant, between 5% and 17% of the cost of investment. Furthermore, if the green party naively uses just a carbon tax, clean investment is 34% lower than when they use their optimal subsidy.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101538"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145415904","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}
Pub Date : 2025-12-01Epub Date: 2025-08-21DOI: 10.1016/j.reseneeco.2025.101531
Marion Davin, Dimitri Dubois, Katrin Erdlenbruch, Marc Willinger
Experimenting with dynamic games raises issues about implementing discounting in experiments. Theoretical rational decision-makers evaluate payoff streams by converting them to a reference period, often “time zero.” In experiments, subjects can adapt their strategy continuously. We explore individual behavior in a dynamic resource extraction experiment with two treatments: “z-discounting” (evaluating gains at time zero) and “p-discounting” (evaluating gains in present-time equivalents). Contrary to theoretical predictions, our data shows a significant positive treatment effect, indicating more substantial extraction under p-discounting. This challenges the theoretical model and prompts discussion on methodological considerations for discounting in laboratory settings.
{"title":"Discounting and extraction behavior in continuous time resource experiments","authors":"Marion Davin, Dimitri Dubois, Katrin Erdlenbruch, Marc Willinger","doi":"10.1016/j.reseneeco.2025.101531","DOIUrl":"10.1016/j.reseneeco.2025.101531","url":null,"abstract":"<div><div>Experimenting with dynamic games raises issues about implementing discounting in experiments. Theoretical rational decision-makers evaluate payoff streams by converting them to a reference period, often “time zero.” In experiments, subjects can adapt their strategy continuously. We explore individual behavior in a dynamic resource extraction experiment with two treatments: “z-discounting” (evaluating gains at time zero) and “p-discounting” (evaluating gains in present-time equivalents). Contrary to theoretical predictions, our data shows a significant positive treatment effect, indicating more substantial extraction under p-discounting. This challenges the theoretical model and prompts discussion on methodological considerations for discounting in laboratory settings.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101531"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144912535","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}
Pub Date : 2025-12-01Epub Date: 2025-08-20DOI: 10.1016/j.reseneeco.2025.101532
Alessandro Bellocchi , Enrico Saltari , Giuseppe Travaglini
We present a dynamic model of land use in a small economy, where land is a fixed resource that can either be used for food consumption, resulting in pollution, or invested in natural capital. Land scarcity imposes a quantity constraint that creates a trade-off between these alternative uses. This constraint shapes the dynamics of the system, influencing its differential equations and leading to a differential–algebraic system of equations (DAE). This approach represents a novelty compared to environmental dynamic models that rely solely on differential equations. Using this analytical framework, we show that shadow prices and stocks are closely interconnected and must be determined simultaneously. We use the DAE system to explore the impact of supranational policies aimed at achieving broader environmental goals on land allocation in the small economy. We derive two main results. First, the relative effectiveness of policy instruments is determined by the pollution intensity of consumption: when pollution intensity is low, incentives that promote land investment in natural capital are more efficient; conversely, when pollution intensity is high, regulatory measures that limit land use for consumption become more effective. Second, although temporary policies do not affect the long-run steady state of the system, they significantly accelerate the transition toward a more sustainable land allocation in the medium term.
{"title":"Land scarcity, sustainable uses and environmental policies","authors":"Alessandro Bellocchi , Enrico Saltari , Giuseppe Travaglini","doi":"10.1016/j.reseneeco.2025.101532","DOIUrl":"10.1016/j.reseneeco.2025.101532","url":null,"abstract":"<div><div>We present a dynamic model of land use in a small economy, where land is a fixed resource that can either be used for food consumption, resulting in pollution, or invested in natural capital. Land scarcity imposes a quantity constraint that creates a trade-off between these alternative uses. This constraint shapes the dynamics of the system, influencing its differential equations and leading to a differential–algebraic system of equations (DAE). This approach represents a novelty compared to environmental dynamic models that rely solely on differential equations. Using this analytical framework, we show that shadow prices and stocks are closely interconnected and must be determined simultaneously. We use the DAE system to explore the impact of supranational policies aimed at achieving broader environmental goals on land allocation in the small economy. We derive <em>two</em> main results. First, the relative effectiveness of policy instruments is determined by the <em>pollution intensity of consumption</em>: when pollution intensity is low, incentives that promote land investment in natural capital are more efficient; conversely, when pollution intensity is high, regulatory measures that limit land use for consumption become more effective. Second, although <em>temporary policies</em> do not affect the long-run steady state of the system, they significantly accelerate the transition toward a more sustainable land allocation in the medium term.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"84 ","pages":"Article 101532"},"PeriodicalIF":3.1,"publicationDate":"2025-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144885878","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}
Pub Date : 2025-08-01Epub Date: 2025-05-14DOI: 10.1016/j.reseneeco.2025.101500
Mehdi Nemati , Steven Buck , Hilary Soldati
This paper estimates how high-frequency online Home Water Use Reports (HWURs) affect household-level water consumption. The HWURs under the study share social comparisons, consumption analytics, leak alerts, and conservation information to residential accounts, primarily through digital communications. The data utilized in this paper is a daily panel dataset that tracks single-family residential households from January 2013 to September 2019. We found a 6.2 % reduction in average daily household water consumption for a typical household enrolled in the program. We estimate heterogeneous treatment effects by the day of the week, the content of push notifications, and baseline consumption quintile. For the latter, we provide an illustrative test to emphasize how mean reversion can severely bias a naïve panel data estimator for heterogeneous treatment effects when the source of heterogeneity is the outcome variable. We also find evidence that leak alerts effectively reduce water consumption immediately following the alert.
{"title":"High-frequency analytics and residential water consumption: Estimating heterogeneous effects","authors":"Mehdi Nemati , Steven Buck , Hilary Soldati","doi":"10.1016/j.reseneeco.2025.101500","DOIUrl":"10.1016/j.reseneeco.2025.101500","url":null,"abstract":"<div><div>This paper estimates how high-frequency online Home Water Use Reports (HWURs) affect household-level water consumption. The HWURs under the study share social comparisons, consumption analytics, leak alerts, and conservation information to residential accounts, primarily through digital communications. The data utilized in this paper is a daily panel dataset that tracks single-family residential households from January 2013 to September 2019. We found a 6.2 % reduction in average daily household water consumption for a typical household enrolled in the program. We estimate heterogeneous treatment effects by the day of the week, the content of push notifications, and baseline consumption quintile. For the latter, we provide an illustrative test to emphasize how mean reversion can severely bias a naïve panel data estimator for heterogeneous treatment effects when the source of heterogeneity is the outcome variable. We also find evidence that leak alerts effectively reduce water consumption immediately following the alert.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"83 ","pages":"Article 101500"},"PeriodicalIF":2.6,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144069695","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}
Pub Date : 2025-08-01Epub Date: 2025-04-30DOI: 10.1016/j.reseneeco.2025.101498
Peio Alcorta , Petr Mariel
Despite its implications for parameter estimation, endogeneity is often overlooked in applications of discrete choice modeling. In environmental valuation, research on endogeneity typically focuses on the case when it originates in the utilities of the underlying random utility maximization model rather than in the class allocation probabilities of a latent class model (LCM). This paper addresses that gap by assuming the allocation function of an LCM includes an endogenous latent variable and examining four scenarios: (i) omitting this latent variable, (ii) directly including an endogenous indicator, (iii) using a multiple indicator solution that accounts for endogeneity, and (iv) employing a hybrid choice model. Simulation results reveal that while the allocation function parameters suffer bias in the first two scenarios, they are consistently estimated in the latter two. Notably, willingness to pay estimates remain unbiased in all these scenarios. We support these findings through simulation studies and draw connections to the existing statistical literature. Furthermore, we apply these insights to a case study focusing on seaweed-based renewable energy in the UK.
{"title":"Beyond biases: Exploring endogeneity in the allocation function of latent class models for environmental valuation","authors":"Peio Alcorta , Petr Mariel","doi":"10.1016/j.reseneeco.2025.101498","DOIUrl":"10.1016/j.reseneeco.2025.101498","url":null,"abstract":"<div><div>Despite its implications for parameter estimation, endogeneity is often overlooked in applications of discrete choice modeling. In environmental valuation, research on endogeneity typically focuses on the case when it originates in the utilities of the underlying random utility maximization model rather than in the class allocation probabilities of a latent class model (LCM). This paper addresses that gap by assuming the allocation function of an LCM includes an endogenous latent variable and examining four scenarios: (i) omitting this latent variable, (ii) directly including an endogenous indicator, (iii) using a multiple indicator solution that accounts for endogeneity, and (iv) employing a hybrid choice model. Simulation results reveal that while the allocation function parameters suffer bias in the first two scenarios, they are consistently estimated in the latter two. Notably, willingness to pay estimates remain unbiased in all these scenarios. We support these findings through simulation studies and draw connections to the existing statistical literature. Furthermore, we apply these insights to a case study focusing on seaweed-based renewable energy in the UK.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"83 ","pages":"Article 101498"},"PeriodicalIF":2.6,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143917793","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}
Pub Date : 2025-08-01Epub Date: 2025-05-23DOI: 10.1016/j.reseneeco.2025.101509
Yuanyuan Yi , Wolfgang Habla , Jintao Xu
China’s economic growth has come at the expense of environmental quality and the degradation of natural resources. In this paper, we identify two sources of environmental degradation: career concerns by managers of state-owned forest enterprises (SFEs) that manage natural resources, and asymmetric information between managers and their superiors regarding the SFEs’ environmental performance. A manager of such an SFE is the agent with two principals: national and sub-national governments. As well as needing to meet ecological targets imposed by the national government, a manager wants profits and promotion into the ranks of sub-national government. We develop hypotheses based on a theoretical model and test them on China’s northeastern SFEs by combining satellite imagery on deforestation with economic survey data. We find that deforestation is more likely for managers of SFEs that have a larger area and are thus more difficult to monitor with respect to ecological targets. Furthermore, we find that sharing a larger proportion of profits with the sub-national government increases the likelihood of getting promoted.
{"title":"Managerial incentives for environmental degradation in Chinese-style federalism","authors":"Yuanyuan Yi , Wolfgang Habla , Jintao Xu","doi":"10.1016/j.reseneeco.2025.101509","DOIUrl":"10.1016/j.reseneeco.2025.101509","url":null,"abstract":"<div><div>China’s economic growth has come at the expense of environmental quality and the degradation of natural resources. In this paper, we identify two sources of environmental degradation: career concerns by managers of state-owned forest enterprises (SFEs) that manage natural resources, and asymmetric information between managers and their superiors regarding the SFEs’ environmental performance. A manager of such an SFE is the agent with two principals: national and sub-national governments. As well as needing to meet ecological targets imposed by the national government, a manager wants profits and promotion into the ranks of sub-national government. We develop hypotheses based on a theoretical model and test them on China’s northeastern SFEs by combining satellite imagery on deforestation with economic survey data. We find that deforestation is more likely for managers of SFEs that have a larger area and are thus more difficult to monitor with respect to ecological targets. Furthermore, we find that sharing a larger proportion of profits with the sub-national government increases the likelihood of getting promoted.</div></div>","PeriodicalId":47952,"journal":{"name":"Resource and Energy Economics","volume":"83 ","pages":"Article 101509"},"PeriodicalIF":2.6,"publicationDate":"2025-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144205283","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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