A 10 minute lesson for all - students, academics, everyone.
You can never have enough cartoons. Hopefully a "carbon tax" that might actually work will come to be the accepted solution (eventually - by which point it will be too late).
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Man Friday post - The First Globalization Debate
Friday, 7 January 2011
Any academic paper that can link globalisation and a riveting read is good by me. Having read the first book last year sometime I admit to not putting the book in the context of globalisation and cannot recall how the book links to the gains from international trade even though I teach this stuff. I now feel that I must reread the book with this new found knowledge.
A great idea for a paper. See what I did with the title of this post?
"The First Globalization Debate"
Economic Research Initiatives at Duke (ERID) Working Paper No. 88
CRAUFURD GOODWIN, Duke University - Department of Economics
Email: GOODWIN@ECON.DUKE.EDU
Early in the 18th century, before the birth of political economy as a discipline, two of the earliest novels in the English language were published: Robinson Crusoe (1719) by writer and economic entrepreneur Daniel Defoe, and Gulliver’s Travels (1726) by the cleric and political adviser Jonathan Swift. The first was widely perceived as an entertaining adventure story, the latter as a pioneering work of science fiction. Both contain indirect comment on the foreign policy of Britain at the time. When viewed from the perspective of the modern economist, however, the works appear to be expressions of opposing positions on the desirability of a nation pursuing integration within a world economy. Crusoe demonstrated the gains from international trade and colonization and even the attendant social and political benefits. He explores the instinct to trade overseas, stages of growth, and the need for careful cost-benefit calculations. By contrast Swift warned of the complex entanglements that would arise from globalization, especially with foreign leaders who operated from theory and models rather than common sense. He makes a case for economic autarky.
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A great idea for a paper. See what I did with the title of this post?
"The First Globalization Debate"
Economic Research Initiatives at Duke (ERID) Working Paper No. 88
CRAUFURD GOODWIN, Duke University - Department of Economics
Email: GOODWIN@ECON.DUKE.EDU
Early in the 18th century, before the birth of political economy as a discipline, two of the earliest novels in the English language were published: Robinson Crusoe (1719) by writer and economic entrepreneur Daniel Defoe, and Gulliver’s Travels (1726) by the cleric and political adviser Jonathan Swift. The first was widely perceived as an entertaining adventure story, the latter as a pioneering work of science fiction. Both contain indirect comment on the foreign policy of Britain at the time. When viewed from the perspective of the modern economist, however, the works appear to be expressions of opposing positions on the desirability of a nation pursuing integration within a world economy. Crusoe demonstrated the gains from international trade and colonization and even the attendant social and political benefits. He explores the instinct to trade overseas, stages of growth, and the need for careful cost-benefit calculations. By contrast Swift warned of the complex entanglements that would arise from globalization, especially with foreign leaders who operated from theory and models rather than common sense. He makes a case for economic autarky.
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"Value of statistical life": Does the cause of death matter?
Tuesday, 4 January 2011
Having published a VSL paper and wanting to do more (the work is somewhat down the queue at the moment along with more proactive blogging) I always had a nagging doubt about the whole process of calculating VSLs and why they should differ across countries and levels of development.
The VSL is closely related to the environment especially when it comes to environmental regulation - it regs save lives then they can be justified - but how many lives and at what cost?
After the mega-catastophies post (see below) what better way to begin the year than seeing how VSL is influenced by the cause of death. My pre-reading intuition would be that it will matter but I am not convinced that it should.
Happy new year.
Does the Cause of Death Matter? The Effect of Dread, Controllability, Exposure and Latency on the VSL
Anna Alberini
Milan Scasny
November 17, 2010
FEEM Working Paper No. 139.2010
Abstract:
The Value of a Statistical Life is a key input into the calculation of the benefits of environmental policies that save lives. To date, the VSL used in environmental policy analyses has not been adjusted for age or the cause of death. Air pollution regulations, however, are linked to reductions in the risk of dying for cancer, heart disease, and respiratory illnesses, raising the question whether a single VSL should be applied for all of these causes of death. We conducted a conjoint choice experiment survey in Milan, Italy, to investigate this question. We find that the VSL increases with dread, exposure, the respondents’ assessments of the baseline risks, and experience with the specific risks being studied. The VSL is higher when the risk reduction is delivered by a public program, and increases with the effectiveness rating assigned by the respondent to public programs that address specific causes of death. The effectiveness of private risk-reducing behaviors is also positively associated with the VSL, but the effect is only half as large as that of public program effectiveness. The coefficients on dummies for the cause of death per se – namely, whether it’s cancer, a road traffic accident or a respiratory illness – are strongly statistically significant. All else the same, the fact that the cause of the death is “cancer” results in a VSL that is almost one million euro above the amount predicted by dread, exposure, beliefs, etc. The VSL in the road safety context is about one million euro less than what is predicted by dread, exposure, beliefs, etc. These effects are large, but the majority of the variation in the VSL is accounted for by the public program feature, the effectiveness of public programs at reducing the indicated risk, and dread. The effects of exposure and experience are smaller. These results raise the question whether using VSL figures based on private risk reduction, which is usually recommended to avoid double-counting, severely understates how much a society might be willing to pay for public safety.
Keywords: VSL, Conjoint Choice Experiments, Mortality Risk Reductions, Cost-Benefit Analysis, Forced Choice Questions
JEL Classifications: I18, J17, K32, Q51
Working Paper Series
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The VSL is closely related to the environment especially when it comes to environmental regulation - it regs save lives then they can be justified - but how many lives and at what cost?
After the mega-catastophies post (see below) what better way to begin the year than seeing how VSL is influenced by the cause of death. My pre-reading intuition would be that it will matter but I am not convinced that it should.
Happy new year.
Does the Cause of Death Matter? The Effect of Dread, Controllability, Exposure and Latency on the VSL
Anna Alberini
Milan Scasny
November 17, 2010
FEEM Working Paper No. 139.2010
Abstract:
The Value of a Statistical Life is a key input into the calculation of the benefits of environmental policies that save lives. To date, the VSL used in environmental policy analyses has not been adjusted for age or the cause of death. Air pollution regulations, however, are linked to reductions in the risk of dying for cancer, heart disease, and respiratory illnesses, raising the question whether a single VSL should be applied for all of these causes of death. We conducted a conjoint choice experiment survey in Milan, Italy, to investigate this question. We find that the VSL increases with dread, exposure, the respondents’ assessments of the baseline risks, and experience with the specific risks being studied. The VSL is higher when the risk reduction is delivered by a public program, and increases with the effectiveness rating assigned by the respondent to public programs that address specific causes of death. The effectiveness of private risk-reducing behaviors is also positively associated with the VSL, but the effect is only half as large as that of public program effectiveness. The coefficients on dummies for the cause of death per se – namely, whether it’s cancer, a road traffic accident or a respiratory illness – are strongly statistically significant. All else the same, the fact that the cause of the death is “cancer” results in a VSL that is almost one million euro above the amount predicted by dread, exposure, beliefs, etc. The VSL in the road safety context is about one million euro less than what is predicted by dread, exposure, beliefs, etc. These effects are large, but the majority of the variation in the VSL is accounted for by the public program feature, the effectiveness of public programs at reducing the indicated risk, and dread. The effects of exposure and experience are smaller. These results raise the question whether using VSL figures based on private risk reduction, which is usually recommended to avoid double-counting, severely understates how much a society might be willing to pay for public safety.
Keywords: VSL, Conjoint Choice Experiments, Mortality Risk Reductions, Cost-Benefit Analysis, Forced Choice Questions
JEL Classifications: I18, J17, K32, Q51
Working Paper Series
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Responding to Threats of Climate Change Mega-Catastrophes
There is nothing like a paper on "mega-catastrophes" to begin the new year with a bang. Excellent work.
The small but uncertain possibility that the world could be ending as we know should appeal to economists everywhere.
Responding to Threats of Climate Change Mega-Catastrophes [PDF]
Carolyn Kousky, Olga Rostapshova, Michael Toman, and Richard Zeckhauser
Abstract
There is a low but uncertain probability that climate change could trigger “mega-catastrophes,” severe and at least partly irreversible adverse effects across broad regions. This paper first discusses the state of current knowledge and the defining characteristics of potential climate change mega-catastrophes. While some of these characteristics present difficulties for using standard rational choice methods to
evaluate response options, there is still a need to balance the benefits and costs of different possible responses with appropriate attention to the uncertainties. To that end, we present a qualitative analysis of three options for mitigating the risk of climate mega-catastrophes—drastic abatement of greenhouse gas emissions, development and implementation of geoengineering, and large-scale ex ante adaptation— against the criteria of efficacy, cost, robustness, and flexibility. We discuss the composition of a sound portfolio of initial investments in reducing the risk of climate change mega-catastrophes.
Key Words: climate change, catastrophe, risk, decisionmaking under uncertainty
JEL Classification Numbers: D81, Q54
The small but uncertain possibility that the world could be ending as we know should appeal to economists everywhere.
Responding to Threats of Climate Change Mega-Catastrophes [PDF]
Carolyn Kousky, Olga Rostapshova, Michael Toman, and Richard Zeckhauser
Abstract
There is a low but uncertain probability that climate change could trigger “mega-catastrophes,” severe and at least partly irreversible adverse effects across broad regions. This paper first discusses the state of current knowledge and the defining characteristics of potential climate change mega-catastrophes. While some of these characteristics present difficulties for using standard rational choice methods to
evaluate response options, there is still a need to balance the benefits and costs of different possible responses with appropriate attention to the uncertainties. To that end, we present a qualitative analysis of three options for mitigating the risk of climate mega-catastrophes—drastic abatement of greenhouse gas emissions, development and implementation of geoengineering, and large-scale ex ante adaptation— against the criteria of efficacy, cost, robustness, and flexibility. We discuss the composition of a sound portfolio of initial investments in reducing the risk of climate change mega-catastrophes.
Key Words: climate change, catastrophe, risk, decisionmaking under uncertainty
JEL Classification Numbers: D81, Q54
Who is afraid of the big bad wolf?
Thursday, 2 December 2010
Isn't all economics about "animal instincts"?
Surely it must be "rational" to be a little scared of large man-eating animals? 2455 Swedes cannot be wrong.
It appears that we are rational which is not so good for wolves in Sweden.
The perhaps, not so shocking news, is that those who are scared of large carnivores are less likely to pay to have them on the doorstep.
Beware of the wolf: Is animal fear affecting willingness to pay for conservation of large carnivores?
Date: 2010-05-03
By: Brännlund, Runar (CERE)
Johansson, Maria (Department of Architecture and Built Environment)
Karlsson, Jens (Grimsö Wildlife Research Station)
Sjöström, Magnus (Department of Economics)
URL: http://d.repec.org/n?u=RePEc:hhs:slucer:2010_009&r=env
From an interdisciplinary approach, this study aims at analysing self-reported animal fear, specifically large carnivore fear, in relation to public willingness to financially contribute to fulfil a governmental policy on large carnivore-induced costs. In a survey of 2455 Swedes, it was found that people whose animal fear was directed particularly towards large carnivores, were less likely to be willing to pay (WTP), or were likely to be willing to pay a lower amount of money. In the prediction of WTP, the contribution of the fear variables was equally important as the socio-economic factors. From a management point of view it seems urgent to understand what kinds of measures that may reduce human fear of large carnivores. It is also suggested that further studies should include standardised measures of anxiety and fear in order to be able to closer link the results of large carnivore fear to the psychological literature on human fears.
Keywords: Carnivores; willingness-to-pay
JEL: Q51
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Surely it must be "rational" to be a little scared of large man-eating animals? 2455 Swedes cannot be wrong.
It appears that we are rational which is not so good for wolves in Sweden.
The perhaps, not so shocking news, is that those who are scared of large carnivores are less likely to pay to have them on the doorstep.
Beware of the wolf: Is animal fear affecting willingness to pay for conservation of large carnivores?
Date: 2010-05-03
By: Brännlund, Runar (CERE)
Johansson, Maria (Department of Architecture and Built Environment)
Karlsson, Jens (Grimsö Wildlife Research Station)
Sjöström, Magnus (Department of Economics)
URL: http://d.repec.org/n?u=RePEc:hhs:slucer:2010_009&r=env
From an interdisciplinary approach, this study aims at analysing self-reported animal fear, specifically large carnivore fear, in relation to public willingness to financially contribute to fulfil a governmental policy on large carnivore-induced costs. In a survey of 2455 Swedes, it was found that people whose animal fear was directed particularly towards large carnivores, were less likely to be willing to pay (WTP), or were likely to be willing to pay a lower amount of money. In the prediction of WTP, the contribution of the fear variables was equally important as the socio-economic factors. From a management point of view it seems urgent to understand what kinds of measures that may reduce human fear of large carnivores. It is also suggested that further studies should include standardised measures of anxiety and fear in order to be able to closer link the results of large carnivore fear to the psychological literature on human fears.
Keywords: Carnivores; willingness-to-pay
JEL: Q51
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Local Exposure to Toxic Releases: Does Ethnic Diversity Matter?
Wednesday, 1 December 2010
After many years of work Matt Cole, myself and Kate Khemmarat have finally got our "environmental justice" paper out in working paper form.
This literature has seen a recent return to the academic agenda with Wayne Grey, Ronald Shadbegian and Ann Wolverton also putting out a recent papers on this topic.
Wayne B. Gray & Ronald J. Shadbegian & Ann Wolverton, 2010. "Environmental Justice: Do Poor and Minority Populations Face More Hazards?," NCEE Working Paper Series 201010, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2010.
# Ronald J. Shadbegian & Wayne B. Gray, 2009. "Spatial Patterns in Regulatory Enforcement: Local Tests of Environmental Justice," NCEE Working Paper Series 200902, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2009.
Local Exposure to Toxic Releases: Does Ethnic Diversity Matter? [PDF]
Date: 2010-11
By: Matthew A Cole
Robert J R Elliott
Khemrutai Khemmarat
URL: http://d.repec.org/n?u=RePEc:bir:birmec:10-29&r=env
This paper examines the role played by community characteristics in influencing local environmental quality, focusing specifically on ethnic diversity. In contrast to the previous literature, this study argues that it is the fractionalization and/or polarization of ethnic groups that is the relevant consideration, rather than the population share of ethnic minorities, since such diversity may significantly increase the difficulty of co-ordinating community action. Using toxic release data for the period 1990-1995 and, for the first time, 2000-2005, we find that measures of ethnic diversity do indeed influence local toxic release emissions. This finding persists across a range of robustness exercises.
Keywords: pollution, ethnic diversity, fractionalization, polarization, community characteristics, environmental justice
JEL: Q53
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This literature has seen a recent return to the academic agenda with Wayne Grey, Ronald Shadbegian and Ann Wolverton also putting out a recent papers on this topic.
Wayne B. Gray & Ronald J. Shadbegian & Ann Wolverton, 2010. "Environmental Justice: Do Poor and Minority Populations Face More Hazards?," NCEE Working Paper Series 201010, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2010.
# Ronald J. Shadbegian & Wayne B. Gray, 2009. "Spatial Patterns in Regulatory Enforcement: Local Tests of Environmental Justice," NCEE Working Paper Series 200902, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jun 2009.
Local Exposure to Toxic Releases: Does Ethnic Diversity Matter? [PDF]
Date: 2010-11
By: Matthew A Cole
Robert J R Elliott
Khemrutai Khemmarat
URL: http://d.repec.org/n?u=RePEc:bir:birmec:10-29&r=env
This paper examines the role played by community characteristics in influencing local environmental quality, focusing specifically on ethnic diversity. In contrast to the previous literature, this study argues that it is the fractionalization and/or polarization of ethnic groups that is the relevant consideration, rather than the population share of ethnic minorities, since such diversity may significantly increase the difficulty of co-ordinating community action. Using toxic release data for the period 1990-1995 and, for the first time, 2000-2005, we find that measures of ethnic diversity do indeed influence local toxic release emissions. This finding persists across a range of robustness exercises.
Keywords: pollution, ethnic diversity, fractionalization, polarization, community characteristics, environmental justice
JEL: Q53
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The Impact of Climate on Life Satisfaction
Straight from the economics department at the University of Birmingham comes a new paper that comes hot on the trail of David Cameron's speech on measuring "happiness" to be used alongside traditional GDP figures.
What if happiness is driven by the climate? What does that mean for the Cancun negotiations and David Cameron's grand plans?
It appears that people are happy when the climate is very average.
David Maddison and Katrin Rehanz investigate.
The Impact of Climate on Life Satisfaction [PDF]
Date: 2010-11
David Maddison
Katrin Rehdanz
URL: http://d.repec.org/n?u=RePEc:kie:kieliw:1658&r=env
We analyse the influence of climate on average life satisfaction in 87 countries using data from the World Values Survey. Climate is described in terms of ‘degree-months’ calculated using an optimally-selected base temperature of 65°F (18.3°C). Our results suggest that countries with climates characterised by a large number of degree-months enjoy significantly lower levels of life satisfaction. This finding is robust to a wide variety of model specifications. Using our results to analyse a particular climate change scenario associated with the IPCC A2 emissions scenario points to major losses for African countries, but modest gains for Northern Europe
Keywords: climate; climate change; happiness; life satisfaction; survey data
JEL: D60
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What if happiness is driven by the climate? What does that mean for the Cancun negotiations and David Cameron's grand plans?
It appears that people are happy when the climate is very average.
David Maddison and Katrin Rehanz investigate.
The Impact of Climate on Life Satisfaction [PDF]
Date: 2010-11
David Maddison
Katrin Rehdanz
URL: http://d.repec.org/n?u=RePEc:kie:kieliw:1658&r=env
We analyse the influence of climate on average life satisfaction in 87 countries using data from the World Values Survey. Climate is described in terms of ‘degree-months’ calculated using an optimally-selected base temperature of 65°F (18.3°C). Our results suggest that countries with climates characterised by a large number of degree-months enjoy significantly lower levels of life satisfaction. This finding is robust to a wide variety of model specifications. Using our results to analyse a particular climate change scenario associated with the IPCC A2 emissions scenario points to major losses for African countries, but modest gains for Northern Europe
Keywords: climate; climate change; happiness; life satisfaction; survey data
JEL: D60
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