Ambient Taxes Under m-Dimensional Choice Sets, Heterogeneous Expectations, and Risk-Aversion

We consider the design of ambient taxes forrisk-neutral and risk-averse polluters whenpolluters and the regulatory agency haveasymmetric information about environmentalrelationships and probabilities associatedwith random events. Unlike prior work, we showthat under these conditions, optimal ambienttaxes must be firm-specific, and accompaniedby additional incentives to influencepolluters' choices of abatement techniques.     

Experimental results on bargaining under alternatives property rights regimes

The effect of alternative property rights regimes on the choicebetween taking an object and acquiring it via a consensual exchangeis experimentally explored in a two-period screening game. Resultsare generally consistent with equilibrium predictions, suggestingthat property rights regimes have a significant impact on observedbehavior.     

Understanding the nature of the risks and the source of the rewards to momentum investing

Buying recent winners and shorting recent losers guaranteestime-varying factor exposures in accordance with the performanceof common risk factors during the ranking period. Adjusted forthis dynamic risk exposure, momentum profits are remarkablystable across subperiods of the entire post-1926 era. Factormodels can explain 95% of winner or loser return variability,but cannot explain their mean return components are more profitablethan those based on total returns. Neither industry effectsnor cross-sectional differences in expected returns are theprimary cause of the momentum phenomenon.     

When Two Wrongs Make a Right: Second-Best Point–Nonpoint Trading Ratios

Most research on point–nonpoint trading focuses on the choice of trading ratio (the rate point source controls trade for nonpoint controls), although the first-best ratio is jointly determined with the optimal number of permits. In practice, program managers often do not have control over the number of permits—only the trading ratio. The trading ratio in this case can only be second-best. We derive the second-best trading ratio and, using a numerical example of trading in the Susquehanna River Basin, we find the values are in line with current ratios, but for different reasons than those that are normally provided.     

IMPACTS OF TAXES TO REDUCE AGRICHEMICAL USE WHEN FARM POLICY IS ENDOGENOUS

The economic impacts of policies to reduce water pollution from agriculture have been explored in a number of studies. A standard assumption in this literature is that farm income support policies are given. However, the modern public choice view of agricultural policy suggests that significant environmental initiatives in agriculture would likely be accompanied by changes in farm income policies to protect those with a significant stake in agriculture. We explore the potential effects of such compensating adjustments on the costs and effectiveness of taxes on polluting chemical inputs in US corn production. We find that compensating farm policy adjustments can greatly increase the costs and reduce the effectiveness of the environmental protection measure. The results also indicate the potentially high costs of poor policy co-ordination.     

A computable market equilibrium model with markets for transferable discharge permits

This paper presents a mathematical programming model for numerically analyzing the impacts of a transferable discharge permit (TDP) system on resource allocation and the distribution of income in a competitive equilibrium setting. Key assumptions of the model are linear household commodity demands, Leontief production functions requiring both primary and produced factors, fixed primary factor supplies and linear pollution dispersion processes. A basic model is presented with discussion of how it may be modified to examine alternative TDP configurations. In addition, there is also a discussion of relationships between key primal and dual variables and of issues involved in actual numerical implementation of the model.     

The optimal control of emissions and renewable resource harvesting under uncertainty

A model of a renewable resource is developed where the growth and quality of the resource are reduced by pollution. Ambient pollution concentrations and the renewable resource stock are modeled as stochastic processes. Conditions for the optimal harvest plan and the optimal emissions rate are derived. The effect of stochastic variations on the optimal management of the resource is analyzed. The steady-state joint probability distribution of the resource and pollution stocks is shown to exist under certain conditions.     

THE RESEARCH ASSESSMENT EXERCISE AND THE REFORM OF ACADEMIC TENURE IN THE UNITED KINGDOM

In this article the reform of academic tenure is examined in the United Kingdom. We test the hypothesis that reforming tenure may have reduced performance in the universities. The years following the 1988 Education Reform Act provide an interesting natural experiment, as the broad effect of the legislation was to soften (though not to remove) tenure in universities in the United Kingdom. It is concluded that the act has not adversely affected efficiency as some writers have predicted it would.