PROJECT EVALUATION AND RESOURCE SUSTAINABILITY

This paper outlines a procedure for embodying the principle of resource sustainability in evaluating projects that use significant amounts of natural resources. In this analysis, sustainability requires maintaining the productivity of the resource used over time, either by renewing the resource or by investing its depletion in other capital assets. The basis of a project's evaluation is its net present social value (NPSV), including resource depletion as a social cost. The social cost of depletion is the amount that must be saved and reinvested annually to accumulate a fund that will yield a perpetual annual income equal to the net output lost by resource depletion. By treating resource depletion as a social cost in calculating NPSV, projects causing a high rate of resource depletion receive a relatively low valuation compared with projects causing less resource depletion. Resource depletion includes environmental damage caused by constructing and operating a project, as well as the direct consumption of natural resources.
Several problems arise in reinvesting depletion to preserve the value of a resource base. One major problem relates to the substitutability of man-made capital for natural resources. The conclusion of the analysis here is that society must invest a substantial amount of resource depletion in: (i) replenishing renewable resources, (ii) increasing product output per unit of resource used, or (Hi) increasing the end-use efficiency of resource-intensive products.     

Recreational Conflict Is Affective: The Case of Cross-Country Skiers and Snowmobiles

The authors conducted a field experiment to test the assumption that subjective feelings are important in recreation conflict. During a weekend, cross-country skiers in a popular recreation area were assigned randomly to an experimental group who were exposed to an operating snowmobile, and a control group who were not exposed. Both groups completed a self-report questionnaire to provide information on their subjective experiences during their outing. The experimental group answered the questions five to ten minutes after encountering a snowmobile. Participants were not informed about the connection between the snowmobile and the investigation, and the questions regarding effects were answered before any clues were given about snowmobiles being an issue. Results showed that relative to the control group, skiers who encountered a snowmobile had their affective quality significantly reduced. Moreover, encountering a single snowmobile had an effect on participants' beliefs about the extent to which noise from snowmobiles disturbed the quality of ski-touring in general.     

Demand for Lottery Products in Massachusetts

The characteristics of demand are examined for the state lottery in Massachusetts, which leads the nation in per capita sales. Cross-sectional OLS regressions of sales per capita are calculated for 1983 and 1990 for each lottery product using explanatory variables representing education, income, race, ethnicity, and age. The results suggest that the lottery no longer exhibits the degree of tax progressivity it had in earlier years and is currently a regressive source of government revenue. While sales of all lottery products consistently decrease with increasing education levels, this inverse relationship has moderated over time. Ethnicity and race are also becoming less of a factor though race is perhaps still important for lottery products combining relatively small payoffs with a high probability of winning. From 1983 to 1990, the 65 and over age group became a significant factor in raising per capita sales of the Massachusetts lottery, thus raising issues of generational and distributional equity.     

Consumer Perceptions of Health Claims in Advertisements and on Food Labels

It has been hypothesized that consumers are more skeptical of health claims made in food ads than of health claims made on food labels. Therefore, the current research explores consumers' skepticism of health claims when the source of such claims is identified as a food ad or a food label. The study also examines whether consumers' beliefs are affected by nutrition information on food labels and whether health claims that have been challenged by the Federal Trade Commission (FTC) and by consumer groups are more likely to affect consumers' beliefs than are unchallenged health claims. The findings have implications for understanding the role of education in reducing consumer misperceptions of health claims.     

Financial Development and Intersectoral Allocation: A New Approach

This paper uses a new methodology based on industry comovement to examine the role of financial market development in intersectoral allocation. Based on the assumption that there exist common global shocks to growth opportunities, we hypothesize that country pairs should have correlated patterns of sectoral growth if they are able to respond to these shocks. Consistent with financial markets promoting responsiveness to shocks, countries have more highly correlated growth rates across sectors when both countries have well‐developed financial markets. This effect is stronger between country pairs at similar levels of economic development, which are more likely to experience similar growth shocks.     

Recreation demand and economic value: An application of travel cost method for Xiamen Island

This paper uses the travel cost method to evaluate the recreational benefits of a beach along the eastern coast of Xiamen Island in China. Our results indicate that the total value for the beach and its associated recreation is in excess of US$53 million. This paper also discusses the protection of this significant tourism resource and considers the use of a suitable entrance fee.     

When a Gain Comes at a Price: Pay Attitudes after Changing Tier Status

This study compares attitudes toward pay and work of employees who changed from the high tier to the low tier after transferring jobs from low-to high-paying departments with those who similarly transferred but did not change tiers. The former had lower Pay Satisfaction than the latter, but they did not differ in Job Satisfaction and Union and Employer Commitment. The findings suggest that the change-tier employees' loss of high-tier status was a likely reason for their pay dissatisfaction.