An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment*

Evaluation of value of irrigation water is essential for supporting policy decision making relating to investments in the irrigation sector, efficient allocation of irrigation water and water pricing and for crafting policies to compare the variable impacts of water reform within and across sectors of the economy. This paper asks the question of how much an established irrigator would pay for water and at what price farmers planning to expand the area they have under irrigation would consider paying for the right to access water. An analytical framework is developed to estimate the net present value of both annual and perennial agricultural activities in the Murrumbidgee catchment. Using these estimates the total value of water used in Murrumbidgee catchment is estimated. An aggregate water supply curve is derived for the catchment from where water may be acquired from irrigators for environmental flows.     

Minimum Wage Compliance and the Labor Demand Curve

Contrary to the traditional analysis of the employment effects of the minimum wage setting, the author shows that if compliance is contingent upon enforcement, complying with the minimum wage law involves a leftward shift of the labor demand curve rather than an upward movement along the curve. Furthermore, the labor demand curve will shift leftward with enforcement even if enforcement is insufficient to ensure compliance, becoming vertical when the options of compliance and noncompliance are equally attractive. Hence, it is not paying the statutory minimum wage that brings about a reduction in employment down to the full-compliance level but enforcement that, if sufficiently high, induces that same reduction in employment, even if the employer is still noncomplying with the minimum wage law.     

Leaving EMU: a real options perspective

The real option implicit in a country's decision of whether to leave an existing monetary union when there is uncertainty over the future benefits of this move is examined. The theoretical model used is calibrated for the current Euro-12 area by proxying policymakers’ inflation preferences with unemployment rates and debt-to-GDP ratios. A robust group of countries is observed that would choose to remain within EMU consisting of Belgium, Finland, Greece and Italy; France and Spain loosely also belong to this core. Only Luxembourg would robustly want to leave EMU; Ireland and The Netherlands, however, complement that core closely.     

Inflation Dynamics: The Role of Expectations

This paper estimates the Phillips curve allowing for a simultaneous role of rational and survey expectations. We consider both a reduced form and a structural specification of the Phillips curve. The results suggest that survey expectations can be a statistically significant component of firms' expectations and inflation dynamics. However, rational expectations continue to play a dominant role.     

Agriculture and global climate stabilization: a public good analysis

The stabilization of global climate presents one of the most complex problems in public good provision the world has faced. Continuation of “business as usual” policies, leading to warming of more than 2 degrees over the next year, will produce significant damage to agricultural systems and catastrophic damage to the natural ecosystems that ultimately support agriculture. The best solution to the public goods problem is a “contract and converge” agreement in which the ultimate outcome is a common global entitlement to CO₂ emissions per person.     

主题公园游客满意度曲线研究——以深圳欢乐谷为例

游客量直接决定主题公园的经营绩效,游客满意度是影响游客量的关键要素之一。本文首先通过对深圳华侨城三大主题公园的预调研,构建了主题公园游客满意度曲线模型;然后以深圳欢乐谷为例,通过回归分析,对主题公园的游客满意度曲线进行了拟合检验,发现主题公园的游客满意度曲线表现为倒U形。为了使主题公园经营者能够有效地利用倒U形模型,本文将游客满意度曲线划分为5个区间,针对每个区间给出了提高游客满意度水平的策略,为主题公园稳定游客量提供了理论依据。     

Pricing equity options everywhere

Finite difference methods are a popular technique for pricing American options. Since their introduction to finance by Brennan and Schwartz their use has spread from vanilla calls and puts on one stock to path-dependent and exotic options on multiple assets. Despite the breadth of the problems they have been applied to, and the increased sophistication of some of the newer techniques, most approaches to pricing equity options have not adequately addressed the issues of unbounded computational domains and divergent diffusion coefficients. In this article it is shown that these two problems are related and can be overcome using multiple grids. This new technique allows options to be priced for all values of the underlying, and is illustrated using standard put options and the call on the maximum of two stocks. For the latter contract, I also derive a characterization of the asymptotic continuation region in terms of a one-dimensional option pricing problem, and give analytic formulae for the perpetual case.     

Why persistent high inflation impedes growth? An empirical assessment of threshold level of inflation for India

In the policy debate on growth–inflation trade-off and the role of monetary policy in managing the trade-off in the short-run, theoretical and empirical research suggests the presence of a country specific threshold level of inflation. Empirical findings of this paper suggest that for India the threshold level of inflation could be around 6%. The inflation target for monetary policy may have to be somewhat lower than the growth maximizing threshold, since any positive inflation could be a risk to inclusive and sustainable growth objective.     

Regularities in the vertical arrangement of land uses in Sydney's central area

Summary

Previous studies of the vertical arrangement of land uses within the central areas of cities have been few, incomplete and employed crude methods of analysis. The present study employs 24 categories of land uses and analyses their distribution over 50 floor levels in Sydney's central district. To model the data, the gamma distribution is employed, being a flexible curve type. With only trifling exceptions, this distribution represents the data remarkably well. The two parameters of the fitted curves are interpreted as: (a) a measure of the propensity of a use to be accommodated over a wide range of floor levels, and (b) as a measure of resistance to height. The values of the parameters are used to define, using a clustering algorithm, groups of uses having members characterized by the most similar floor level arrangement. The results are of major importance for three reasons: First, the degree of regularity in the way establishments seek locations in the height dimension has not been discovered before. Second, the gamma‐distribution offers utility in modelling vertical location and should be useful in testing aspects of different town planning policies on plot ratios. Third, draconian town planning restrictions imposed on height controls may introduce locational inefficiencies hitherto unsuspected.     

Rising Food Prices and Household Welfare: Evidence from Brazil in 2008

Food price inflation in Brazil in the 12 months to June 2008 was 18%, whereas overall inflation was 7%. Using spatially disaggregated monthly data on consumer prices and two different household surveys, we estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage‐earning agricultural labour force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. Although the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, estimates of the market‐income effect were positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U‐shaped, with middle‐income groups suffering larger proportional losses than the very poor. Nevertheless, as Brazil is 80% urban, higher food prices still led to a greater incidence and depth of poverty at the national level.