Is Meta-Analysis a Noah's Ark for Non-Market Valuation?

This paper describes meta-analytical methods as they have been appliedto non-market valuation research. These studies have been used to reviewand synthesize literature and, more recently, in benefit transfer. Thissecond use imposes a higher standard on the consistency in economicconcepts being summarized and in the resources included in ameta-analysis. To meet this need, the paper proposes and illustrates astructural framework using a generalized method of moments estimator toestimate the parameters of a preference function with the benefitsestimates usually encountered in meta-analytic summaries.     

Altruism and the Economic Values of Environmental and Social Policies

Altruism is a type of non-use value which can have different definitions depending on the type of goods entering the utility function of the altruists and their expectations about the contributions of others. The purpose of this paper is to measure the trade-offs between different types of altruist values originating from social and environmental policies. Environmental policies are concerned with reducing health effects from a power plant while social policies involve both the attainment of public facilities for education and leisure and an increase in the income of the affected population. The empirical application utilizes a choice experiment technique which allows for valuation of multiple goods. Health effects are decomposed into the values of the risk of becoming ill, the duration of the episodes and the limitations imposed by illness. Altruist values are elicited from a population that is not affected by pollution. Results show that altruism is significant for policies directed to reducing health effects and improving the income level of the affected population, whereas there is egoism for a policy aimed at improving public facilities in the polluted suburb. The value of altruism is significantly influenced by the expectations of net benefits to be received by the affected population.     

Hedonic models and air pollution: Twenty-five years and counting

This paper reports a meta analysis of how effectively hedonic property models have detected the influence of air pollution on housing prices. Probit estimates are reported describing how data, model specification, and local property market conditions in cities represented in thirty-seven studies influence the ability of hedonic models to uncover negative, statistically significant relationships between housing prices and air pollution measures.Partial support for this research was provided by the Russell Sage Foundation. Thanks are due David Cordray, Heidi Hartman, and Larry Hedges of the Foundation's Meta-Analysis Panel for constructive comments, to Ray Palmquist for suggestions and assistance in assembling the results from his studies, to Rick Freeman and Tom Tietenberg and two anonymous referees for comments on the research, and to Barbara Scott for constructive editing of earlier drafts of this paper.     

Enforcing Emissions Trading when Emissions Permits are Bankable

We propose enforcement strategies for emissions trading programs with bankable emissions permits that guarantee complete compliance with minimal enforcement costs. Our strategies emphasize imperfect monitoring supported by a high unit penalty for reporting violations, and tying this penalty directly to equilibrium permit prices. This approach is quite different from several existing enforcement strategies that emphasize high unit penalties for emissions in excess of permit holdings. Our analysis suggests that a high penalty for excess emissions cannot be used to conserve monitoring effort, and that it may actually increase the amount of monitoring necessary to maintain compliance.The authors are grateful to Anthony Heyes and three anonymous referees for their valuable comments. Partial support for this research was provided by the Cooperative State Research Extension, Education Service, U. S. Department of Agriculture, Massachusetts Agricultural Experiment Station under Project No. MAS00871.     

Identification and Measurement of Australian Consumer Sentiment

This article was prepared by Dr L. V. Defris and J. S. McDonnell of the Institute research staff. The authors wish to thank Professor R. F. Henderson and Dr P. J. Sheehan for their helpful comments.     

Dissertation abstract: Experiments on fairness and reputation

The three dissertation essays investigate different aspects of reputation in games where fairness is an important consideration. The first essay studies the effects of reputation on indirect reciprocity in different dictator games. The first experiment places dictators in two environments where they can either give money to the paired player or take money away from them: in one treatment the paired player is a stranger and in the other treatment the dictator has information on the paired player’s reputation. Contrary to anecdotal evidence, the statistical tests show that the dictators’ behavior towards a stranger is not statistically significantly different from their behavior towards an individual with an established reputation. The findings arise because a high proportion of dictators acted purely in their own self interest in both treatments. The data also provides evidence that dictators are more generous when they know that their choices (but not their identities) will be revealed in the future. In the second experiment the dictators’ choices were restricted to only generous actions. In such environment the dictators sent more money on average to recipients with a reputation for being generous than to recipients without a reputation. The second essay explores the ways in which information about others’ actions affects one’s own behavior in a dictator game. The experimental design discriminates behaviorally between three possible effects of recipient’s within-game reputation on the dictator’s decision: reputation causing indirect reciprocity, social influence, and identification. The separation of motives helps to identify the mechanisms of social transmission of impulses towards selfish or generous behavior. The data analysis reveals that the reputation effects have a stronger impact on dictators’ actions than social influence and identification. In the third essay¹ we examine the reputation effects in a labor market setting by analyzing the influence of negative technological shocks on long run relationships between firms and workers. The positive correlation between wage and effort in static conditions has been demonstrated in many experimental studies and has been one of the prominent explanations for the existence of wage rigidity. We subject these findings to further tests in a non-stationary environment that better corresponds to outside-the-lab market conditions. We observe the positive correlation of wages and effort but do not find support for downward wage rigidity in our data. Once the shocks occur, firms lower the wages and relationships often break down. The workers who accept a lower wage respond with exerting a lower effort. JEL Classification C70, C91, D63, D64 ¹Co-authored with Ninghua Du. Dissertation Committee: Dissertation Advisor: James C. Cox Martin Dufwenberg, Price V. Fishback, Ronald L. Oaxaca     

Output decline and the demise of the CMEA and the USSR: The case of Hungary

The direct effect of market losses in CMEA on Hungarian output was 4%, out of the 18% decline registered in gross output in 1988–1992. Total (direct and indirect) effects amounted to 8%. In the same period Hungary's export expansion in western markets led to direct and total effects equivalent to 2.9% and 5.6% of the 1988 output, respectively. The share of reorientation within this switch from east to west was not negligible, it amounted to 19% of respective trade volumes. The 1991 price explosion of imported inputs inhibited the activity of Hungarian firms only moderately, due to earlier realistic domestic prices. In 1991 Hungary suffered a 26% terms of trade loss, and could have experienced an income terms of trade loss of USD 1400 to 1600 million, had the trade volume of 1990 been repeated. Since adjustments in 1991, much smaller income losses accrued. Due to earlier special tax arrangements, much of the burden of terms of trade losses had to be born by the budget.     

THE VALUE OF CLEANER AIR: AN INTEGRATED APPROACH

Policymakers in the legislative and regulatory arenas face increasing public expectations that authorities will both promulgate and implement strict environmental programs. At the same time, the aggregate cost of such programs is rising and is impacting economic sectors previously untouched. In this context, a major study used an integrated interdisciplinary perspective to determine what economic benefits would result from air pollution controls. Specifically, the study developed estimates for the health benefits of reducing ozone and fine particulate matter concentrations in the nation's most polluted region—the South Coast Air Basin centering on Los Angeles. This paper presents the economic methodologies and results of that study. It also discusses how health and atmospheric sciences informed the economic assessment.     

Elasticity estimates of farmed salmon demand in Spain and Italy

In this paper, estimates of the elasticities that characterize the structure of demand for farmed salmon in Spain and Italy are reported. The demand models are specified using a Box-Cox transformation of the variables and a Hausman test is used to determine price endogeneity in the demand equations. The results show short-run unitary own-price elasticity of demand for farmed salmon in both markets, but long run estimates show significant elastic price response. Short run substitution of salmon for other fish species is not observed and, for both Spain and Italy, farmed salmon is characterized as a luxury good. Interestingly, we show that our a priori expectations about own-price elasticities being lower in smaller market areas is confirmed. Finally, the results obtained are compared to other recent results reported in the salmon demand literature.