ECONOMIC ANALYSIS OF ON-FARM SOLUTIONS TO DRAINAGE PROBLEMS IN IRRIGATED AGRICULTURE

Agricultural production in many semi-arid areas over the world is affected by poor drainage and saline conditions. Optimal agricultural management can be considerably different under these conditions than in locations where these problems do not occur. A long-run steady-state model is developed to analyse several management strategies for a farm with limited natural drainage and no access to off farm facilities. The model is applied to a representative farm in California. Under optimal management, the results suggest relatively small evaporation ponds, a reduction in water application, and little change in cropping patterns. Some drainage reuse is optimal when only variable reuse costs are considered. Returns to land and management are positive in all cases considered and benefits from a free off-farm facility are approximately $260/ha.     

Health and the evolution of welfare across Brazilian municipalities

This paper describes the pattern of reductions in mortality across Brazilian municipalities between 1970 and 2000, and analyzes its causes and consequences. It shows that, as in the international context, the relationship between income and life expectancy has shifted consistently in the recent past. But reductions in mortality within Brazil have been more homogeneously distributed than across countries. We use a compensating differentials approach to estimate the value of the observed reductions in mortality. The results suggest that gains in life expectancy had a welfare value equivalent to 39% of the growth in income per capita, being therefore responsible for 28% of the overall improvement in welfare. We then use a dynamic panel to conduct a preliminary assessment of the potential determinants of these gains. We show that improvements in education, access to water, and sanitation seem to be important determinants of the dimension of changes in life expectancy not correlated with income.     

Irrational diversification in multiple decision problems

The paper deals with multiple decision problems, which are similar to the task of guessing the color outcomes of five independent spinnings of a roulette wheel, 60% of whose slots are red and 40% white. Each correct guess yields a prize of $1. The guess of 5 Reds clearly first order stochastic dominates any other strategy. In contrast, subjects diversify their choices when facing a multiple decision problem in which the choice is between lotteries with clear objective probabilities. The diversification is stronger when the subjects face uncertainty without objective probabilities and weaker when the choice problem involves real life actions.     

Tax on emissions or subsidy to renewables? Evaluating the effects on the economy and on the environment

We examine the relationship between the economy and the environment in a model where production uses nonpolluting renewable and polluting nonrenewable resources. There is policy intervention through a tax on emissions and a subsidy to renewables extraction/production. Results show that both instruments are able to decrease emissions intensity of output. However, when used together, the desired effect is higher. Empirically it is shown that the subsidy achieves higher renewables intensity and although present emissions per output are similar for both instruments, the subsidy achieves lower future levels.     

Welfare effects of unbundling under different regulatory regimes in natural gas markets

In this paper, we develop a theoretical model that enriches the literature on the pros and cons of ownership unbundling vis-à-vis lighter unbundling frameworks in the natural gas markets. For each regulatory framework, we compute equilibrium outcomes when an incumbent firm and a new entrant compete à la Cournot in the final gas market. We find that the entrant’s contracting conditions in the upstream market and the transmission tariff are key determinants of the market structure in the downstream gas market (both with ownership and with legal unbundling). We also study how the regulator must optimally set transmission tariffs in each of the two unbundling regimes. We conclude that welfare maximizing tariffs often require free access to the transmission network (in both regulatoy regimes). However, when the regulator aims at promoting the break-even of the regulated transmission system operator, the first-best tariff is unfeasible in both regimes. Hence, we study a more realistic set-up, in which the regulator’s action is constrained by the break-even of the regulated firm (the transmission system operator). In this set-up, we find that, for a given transmission tariff, final prices in the downstream market are always higher with ownership unbundling than with legal unbundling.     

Does consumption buy happiness? Evidence from the United States

We examine the association between various components of consumption expenditure and happiness in the Health and Retirement Study (HRS), a nationally representative sample of older Americans. We find that only one component of consumption is positively related to happiness—leisure consumption. In contrast, consumption of durables, charity, personal care, food, health care, vehicles, and housing are not significantly associated with happiness. Second, we find that leisure consumption is associated with higher levels of happiness partially through its effect on social connectedness, as indexed by measures of loneliness and embeddedness in social networks. On one hand, these results counter the conventional wisdom that “material goods can’t buy happiness.” One the other hand, they underscore the importance of social goods and social connectedness in the production of happiness.     

The Impact of the Entry of Biosimilars: Evidence from Europe

Biologics represent a substantial and growing share of the U.S. drug market. Traditional “small molecule” generics quickly erode the price and share of the branded product upon entry, however only a few biosimilars have been approved in the US since 2015, thereby largely preserving biologics from competition. We analyze European markets, which have had biosimilar competition since 2006. Using our own survey, we analyze how market features and public policies predict biosimilar entry, price, and penetration, finding significant heterogeneity across countries and products. Effective buyer institutions are associated with increased biosimilar penetration. Our estimates can inform ongoing policy discussions.     

The stock market’s reaction to macroeconomic news under ambiguity

Financial Markets and Portfolio Management - We investigate the quality of the information that macroeconomic news conveys to the stock market about future business conditions. Our econometric...     

Translating Corporate Social Responsibility into Action: A Social Learning Perspective

Journal of Business Ethics - Interest in the microfoundations of corporate social responsibility (CSR) has grown over the past decade. In this study, we draw on social learning theory to examine...