A Bug Is a Bug Is a Bug: Symbolic Responses to Contingent Valuation Questions about Forest Pest control programs?

Symbolic responses are one of many issues attending contingent valuation studies. The problem is that many objects that are the subject of contingent valuation surveys can act as symbols for larger issues. In this paper, we want to compare the attitudes of residents of five communities with two different forest pests, jack pine budworm and gypsy moth. Jack pine budworm affects commercially important forests in Canada, while gypsy moth generally affects recreational areas and has less commercial significance. All of the respondents were asked about both insects; however, not all of the communities had direct experience with both insects. The purpose is to examine whether respondents would differentiate their willingness to pay for control mechanisms between these different defoliators. The implication is that all bugs are alike and generally noxious, a notion that would not necessarily sit well with resource managers who have to deal with insect outbreaks. Respondents did not differentiate strongly between insect control programs that would impact their community and those that would not. While not conclusive, the results do suggest symbolic responses to this particular issue. This is further evidence that willingness-to-pay results from contingent valuation studies need to be cautiously interpreted as pseudo market values.     

OFFICIAL CRIME STATISTICS: THEIR USE AND INTERPRETATION

In this paper we consider the data used by economists to estimate economic models of crime. We discuss the main sources of Official Crime Statistics in the United Kingdom, Europe and the United States, and raise questions about the reliability of these data for estimation and forecasting purposes. In particular, we focus on the disparity between crime rates suggested by victimisation surveys and the rates suggested by Official Statistics, and show that this is primarily a consequence of under-reporting by victims and under-recording by the police. We conclude our analysis by considering the factors that influence the under-reporting of crime.     

Abstracts

Quality & Quantity -     

Personality and Saving Behavior Among Older Adults

This study investigates how psychological characteristics influence saving behavior within a sample of 1,380 U.S. preretirees aged 50–70 from the Health and Retirement Study (HRS). Using the 3M Model of Motivation and Personality as a theoretical basis, structural equation model results revealed that financial self‐efficacy (FSE) directly explains saving behavior and is central to understanding the link between other psychological characteristics and the saving behavior of older adults. Through higher FSE, increased positive affect and reduced negative affect indirectly supported saving behavior. Moreover, the results revealed personality traits indirectly explained saving behavior. Conscientiousness and extroversion indirectly supported saving behavior; whereas openness to experience and neuroticism indirectly undermined saving behavior. This study connects broad personality traits with saving behavior, which provides information about how older adults' psychological composition is related to their saving practices.     

Urban encroachment,forest regrowth and land-use institutions: Does zoning matter?

As concern grows regarding urban sprawl and forest and agricultural land preservation, the effectiveness of land-use policies in shaping land-use change warrants further study. We evaluate the impact of county-level zoning laws, the most predominant land use policy in the USA, and land rents on the relative amounts of forest, agricultural, and developed land, while controlling for demographic information and taxation rates. Over the past decades, southern Indiana has experienced forest regrowth on private lands, but this regrowth has declined in recent years with increased conversion of open space for urban residential development. We develop a model of land-use shares in 40 southern Indiana counties based on the net benefits to agriculture, forestland, and urban uses using a maximum likelihood estimation of a Dirichlet distribution. We find agricultural land rent and indicators of land productivity are the most important predictors of the proportion of agriculture and urban uses. Forest use is better explained by shifting regional economic structure and hilly terrain. Counties with a greater proportion of their work force in the service sectors have a greater proportion of land forested. Finally, to some extent zoning may protect agricultural land in the region, although land rents, land characteristics, and population are strong predictors of the ratio of agriculture to urban use.     

MONETARY TRANSMISSION MECHANISM IN CENTRAL AND EASTERN EUROPE: SURVEYING THE SURVEYABLE

Abstract.  This paper surveys recent advances in empirical studies of the monetary transmission mechanism, with special attention to Central and Eastern Europe (CEE). Our results indicate that the strength of the exchange rate pass-through substantially declined over time mainly due to a fall in inflation rates and to some extent due to the so-called composition effect. The asset price channel is weak and is likely to remain weak because of shallow stock and private bond markets and because of low stock and bond holdings of domestic households. House prices may become an exception with booming mortgage lending and with high owner occupancy ratios. While the credit channel could be a powerful channel of monetary transmission – as new funds raised on capital markets are close to zero in CEE – it is actually not, as both commercial banks and non-financial corporations can escape domestic monetary conditions by borrowing from their foreign mother companies. The moderately good news, however, is that those banks and firms are influenced by monetary policy in the euro area because their parent institutions are themselves subjected to the credit channel in the euro area.     

Trade Costs,Trade Balances and Current Accounts: An Application of Gravity to Multilateral Trade

In this paper we test the well-known hypothesis of Obstfeld and Rogoff (NBER Macroeconomics Annual 7777:339–390, 2000) that trade costs are the key to explaining the so-called Feldstein–Horioka puzzle. Our approach has a number of novel features. First, we focus on the interrelationship between trade costs, the trade account and the Feldstein–Horioka puzzle. Second, we use the gravity model to estimate the effect of trade costs on bilateral trade and, third, we show how bilateral trade can be used to draw inferences about desired trade balances and desired intertemporal trade. Our econometric results provide strong support for the Obstfeld and Rogoff hypothesis and we are also able to reconcile our results with the so-called home bias puzzle.