General equilibrium modelling of the direct and indirect economic impacts of water quality improvements in the Netherlands at national and river basin scale

The main objective of the study presented in this paper is to estimate the direct and indirect economic impacts of water quality policy scenarios in the Netherlands focusing on the reduction of emission levels of nutrients and a number of eco-toxicological substances. For this purpose, an Applied General Equilibrium (AGE) model consisting of 27 production sectors is extended to water through the inclusion of substitution elasticities between labour, capital and emissions to water in the sectors' production functions. The macro-economic costs of a 10, 20 and 50% reduction of the emission levels in the year 2000 of ten priority substances in the EU Water Framework Directive vary between 0.2 and 9.4% of Net National Income (NNI). A large share of the total economic costs are borne by important sources of pollution like commercial shipping, the chemical and metal industry. However, important spin-off effects due to adaptation take place in the tertiary service sector. Besides the estimation of the economy-wide impacts of water quality improvements, the novelty of the study presented here is found in the downscaling of national and sector results to river basin level and the estimation of shadow prices for water-polluting substances through the introduction of an emission permits market.     

The structure of strategy-proof random social choice functions over product domains and lexicographically separable preferences

We characterize the class of dominant-strategy incentive-compatible (or strategy-proof) random social choice functions in the standard multi-dimensional voting model where voter preferences over the various dimensions (or components) are lexicographically separable. We show that these social choice functions (which we call generalized random dictatorships) are induced by probability distributions on voter sequences of length equal to the number of components. They induce a fixed probability distribution on the product set of voter peaks. The marginal probability distribution over every component is a random dictatorship. Our results generalize the classic random dictatorship result in Gibbard (1977) and the decomposability results for strategy-proof deterministic social choice functions for multi-dimensional models with separable preferences obtained in LeBreton and Sen (1999).     

SOCIAL ACCOUNTING MATRIX FOR INDIA

This paper provides the latest Social Accounting Matrix (SAM) of the year 2003–2004 for the Indian economy with a wide variety of disaggregation for the Energy sector and the sectors that are relevant for environmental and climate policy evaluation. This SAM shows the interaction between production, income, consumption and capital accumulation. It can be used to provide an analysis of the interrelationship between the production structure of an economy and the distribution of incomes and expenditures of different household groups. In addition, it can be used for multiplier analysis to capture direct, indirect and induced impact on input use due to any exogenous changes in the economy. This SAM consists of 85 sectors of the economy, three factors of production and nine categories of occupational households. The Indian economy is becoming structurally biased towards capital intensive sectors, such as service and energy production. The energy production sector itself is the most energy intensive sector as of 2003–2004.     

Do trade and investment agreements lead to more FDI? Accounting for key provisions inside the black box

The previous literature provides a highly ambiguous picture on the impact of trade and investment agreements on FDI. Most empirical studies ignore the actual content of BITs and RTAs, treating them as “black boxes”, despite the diversity of investment provisions constituting the essence of these agreements. We overcome this serious limitation by analyzing the impact of modalities on the admission of FDI and dispute settlement mechanisms in both RTAs and BITs on bilateral FDI flows between 1978 and 2004. We find that FDI reacts positively to RTAs only if they offer liberal admission rules. Dispute settlement provisions play a minor role. While RTAs without strong investment provisions may even discourage FDI, the reactions to BITs are less discriminate with foreign investors responding favourably to the mere existence of BITs.     

The Impact of Membership in the Ethics Officer Association

In this study, we propose considering membership in the Ethics Officer Association (EOA) as a proxy for the firm's commitment to ethical decision making, and we analyze the influence of firm- and CEO-specific characteristics on this commitment. While we observe a positive relationship between membership and firm size, we also document a negative relationship between EOA membership and the executive's time in position and, to a more modest extent, accounting returns. Pursuing this further, we present evidence that firms with past legal issues may seek EOA membership as a signal of their intention to be compliant in the future.     

The Life Cycle of the U.S. Tire Industry

We introduce a new theory of industry evolution. According to our model, the nonmonotonicity in firm numbers found in many young industries is a consequence of the gradual decline in unit costs. Early stages of the industry life cycle, when unit costs and profit margins are high, display positive net entry rates. In later stages, declining unit costs and increasing competition limit the market room for (fringe) firms accumulating in a shakeout. The model explains paths of output, price level, and firm numbers using a recursive system of equations. We apply the model to the U.S. tire industry.     

The gains from specialization and population size

This note combines three ideas: the association of more people with new goods, the comparative advantages of individuals, and economic happiness. People may not be happier in a larger knowledge economy, but the gains from specialization are necessarily larger.     

Respondent uncertainty in a contingent market for carbon offsets

The main objective of this paper is to provide additional empirical evidence of what explains respondent uncertainty in contingent valuation (CV) and how this in turn affects stated willingness to pay (WTP). Air travelers asked to pay a carbon travel tax to offset carbon emissions from flying were asked how likely it is that they will actually pay if the tax is voluntary. When changing the market compliance imperative from a mandatory carbon tax to a voluntary contribution, a third of all air travelers consider it unlikely they will actually pay their stated WTP amount. An ordered probit estimation approach is applied to identify the sources of respondent uncertainty. Besides the bid price, respondent sense of responsibility and belief in the effectiveness of the voluntary carbon market are among the main reasons for the experienced uncertainty.     

The Value of Changes in Deer Season Length: An Application of the Nested Multinomial Logit Model

Increasing deer populations can be controlled through manipulatingharvest limits or season length. While such actions often result in benefitsto hunters, both motorists and the agricultural sector also benefit as alower deer population leads to fewer incidences of harmful human-deerencounters. Traditional recreation demand models are often employed toexamine the welfare implications of changes in daily hunting bag limits.Studies measuring the effects of changes in season length, however, arenoticeably absent from the literature. This study uses a nested randomutility model to examine hunter choice over site and season selection toderive the values of changes in season length.