Stated Preferences, Real Behaviour and Anchoring: Some Empirical Evidence

We compare different contingent valuation question formats with each other and with observed behaviour for a non-monetary estimation task, the expected number of kilometers travelled by automobile. Open-ended questions, open-ended follow-up questions, dichotomous choice (DC) questions, and double-bound DC questions are included. The single and double-bound DC questions result in an estimated mean about twice as high as the actual value and the open-ended mean. The DC question overestimation seems to be due to an anchoring effect leading to yea-saying behaviour. Our results about the difference between DC questions and open-ended questions is consistent with the pattern observed in contingent valuations studies of the willingness to pay. Our results indicates that DC questions seem to be associated with a general overestimation problem that is present even for simple non-monetary estimation tasks.     

On a clear day you might see an environmental Kuznets curve

We shed some new light on the Environmental Kuznets curve (EKC) and show how it can be viewed as a particular form of equilibrium relationship, where technology and preference parameters determine the shape of the curve. In contrast to most of the literature on the EKC, we estimate a theoretically consistent model on long-run data (Swedish sulfur emission, covering the period 1900–2002). Furthermore, we test and date structural change. The model suggests four regimes, 1900–1918, 1919–1933, 1934–1967 and 1968–2002, generating four rather different patterns for pollution over time. The policy-conclusions are consonant with Pearce’s general view about the EKC: there is no theoretical presumption that it has an inverted U shape, nor should any country try to “grow out of the environmental problems” without analyzing the benefits and costs of so doing.     

The Return of Geopolitics in the Era of Soft Power: Rereading Rudolf Kjellén on Geopolitical Imaginary and Competitive Identity

This paper looks at how Swedish political scientist Rudolf Kjellén (1864–1922) conceived of the relationship between nature and culture, between material and immaterial power as well as the role of soft power, geopolitical imaginary and competitive identity in off-setting potentially unfavourable geopolitical conditions for small and medium-sized states. It is argued that with regard to small states, Kjellén did not maintain a consistent separation between “soft” cultural resources of power and “hard” laws of nature. Rather, he placed the mutually constitutive tension between geography (nature) and politics (culture) at the centre of his politico-scientific analysis, arguing that active “biopolitics” could supplement geopolitics. In Kjellén’s conception, cultural and natural resources are instruments of an otherwise integrated notion of power which challenges the contemporary separation between hard and soft power.     

Testing the Porter hypothesis: the effects of environmental investments on efficiency in Swedish industry

The main objective of this paper is to test the Porter hypothesis by assessing static and dynamic effects of environmental policy on productivity. According to the hypothesis, stringent environmental regulations have dynamic effects on firm performance, and these effects eventually generate profits that offset the adaptation costs. We extend previous analyses by using unique data on environmental protection investments in the Swedish manufacturing industry as a proxy for environmental stringency. These data enable us to separate environmental protection investments into pollution prevention and pollution control. This distinction is crucial since the hypothesis claims that it is investments in prevention that have positive dynamic effects on firm performance. To test the hypothesis, a stochastic production frontier model is estimated where firm inefficiency is a function of investments in environmental protection. In general, we find no support for the Porter hypothesis within the time frame of our study, indicating that environmental regulations lead to efficiency losses. This result is even stronger in the harshly regulated pulp and paper industry.     

Optimal policy rules and regime switching in disequilibrium models

This paper emphasizes the need to search for globally optimal policy levels (for public production, say) in fix-price disequilibrium analysis. Regime-specific rules are inadequate. They ignore the fact that moving a policy towards its optimal level may move the economy from its initial disequilibrium regime to a different regime where the rule no longer applies.     

The Nordic Model on the Global Market of Ideas: The Welfare State as Scandinavia’s Best Brand

This article analyses the contemporary deployment of the Nordic welfare state model as a centrepiece of Nordic competitive identity and strategic communication on the global market of ideas. First, it looks at the interrelated phenomena of global competition, competitive identity and region branding. Second, it studies the interplay between Nordic transnational public diplomacy and national public diplomacy of individual Nordic countries, in particular Sweden, on the one hand and international media outlets’ reporting on the Nordic countries on the other. In analysing this cross-fertilizing genre, the article identifies how the welfare state is being repackaged for export along with a set of “progressive values” which are coded as specifically “Nordic.” The article discusses (1) the interaction between outer images and inner visions; (2) the place and significance of the Nordic model, progressive values and the welfare state in today’s Nordic branding; and (3) the possible function of outward competitive identity as a kind of “compensatory imagination” directed inward as well as outward.     

Evaluating market efficiency without price data: the Swedish market for wood fuel

The overall objective of this paper is to analyse the price development and price formation for wood fuel used by the Swedish district heating sector. According to Lönner et al., there is a significant potential for increasing the use of wood fuel in Sweden, at a fairly moderate cost. The basic question raised in this paper is then why this potential is not realized. Specifically, a methodology is proposed for testing whether the reason is that market imperfections are present. As a first step the shape of the technology in the Swedish district heating sector is estimated for the period 1989 to 1996. In the second step the estimated technology and the assumption of cost-minimizing firms are combined to calculate shadow prices, i.e. marginal valuation of wood fuel in this sector. If the average shadow price significantly deviates from the average observed price one may conclude that this market is functioning inefficiently due to imperfections. According to constructed bootstrap confidence intervals this difference is significant only for three out of eight years, implying that the quantities of wood fuel traded are too small. For the other years the difference is not significant, implying that one cannot, on statistical grounds, reject the efficient market hypothesis for all years.     

Altruism in cost-benefit analysis

It has recently been argued that altruistic motives for paying for a public sector project should be ignored in a cost-benefit analysis. The reason is that including altruism would mean a kind of double counting of the project's benefits. This paper takes a look at these arguments, and derives cost-benefit rules which cover different kinds of altruism. The paper also provides some recommendations for the treatment of altruism in studies using the contingent valuation method.     

On the interpretation of ‘green’ NNP measures as cost-benefit rules

In this paper we consider the possibility of using green welfare change measures as the basis for cost-benefit analysis of new projects. Such green welfare change measures look very similar to what one would expect a cost-benefit analysis of the entire economy to look like. It is shown that although green welfare measures contain the shadow prices needed in the evaluation of a small new project, one must account for changes in these prices.We are grateful to two referees for helpful comments on an earlier version of this paper