Assessing Voluntary Programs to Improve Environmental Quality

The last decade has seen a dramatic increase in the use of voluntaryapproaches (VAs) to environmental protection, which has spurned agrowing literature on the relative merits of voluntary vs. mandatoryapproaches. This paper draws on that literature to discuss both thetheoretical and empirical issues that arise in the evaluation orassessment of a particular VA. We consider both the environmentaleffectiveness and the efficiency of this policy approach. Our aim is toaid policymakers in evaluating a specific program or in thinking aboutthe use and design of a VA. We identify some key features that arelikely to increase both the effectiveness and the efficiency of VAs.     

Legal Liability as an Environmental Policy Tool: Some Implications for Land Markets

This article considers the use of legal liability as a tool for internalizing environmental externalities, considering specifically the implications for land markets. The discussion focuses on liability under CERCLA. A simple model of land markets is used to evaluate alternative assignments of liability in terms of their impacts on decisions to buy and sell property and to invest in pollution abatement. The results suggest that the existence of a land market can alter the effect of the liability rule. In some cases the land market can eliminate an inefficiency that would otherwise exist, while in other cases it can create one.     

A Public Choice Analysis of the Evolution of Tort Law

Abstract . In contrast to the article by W. Harris, it is contended that in the area of product liability a rule of strict liability is not necessarily less efficient than a negligence rule and an analogy between product liability cases and lotteries is not appropriate.     

When Should Providers of Recreational Land be Immune from Liability?

This article examines statutes that limit the liability of landowners who open their property for recreational use. We ask whether landowner immunity promotes efficient provision by owners and efficient entry by recreational users. We examine these questions in several contexts, depending on whether the land is developed or undeveloped, privately or publicly owned, and whether or not the owner charges an entry fee. Our main finding is that, for both privately and publicly owned land, owner immunity is more efficient than owner liability when the land is undeveloped, but this is not true when the land is developed.     

Real Estate and the Environment: An Introduction

The Journal of Real Estate Finance and Economics -     

MEASUREMENT OF CAPACITY UTILIZATION FOR REVENUE-MAXIMIZING FIRMS*

A dual measure of capacity utilization is developed for multiproduct, revenue-maximizing firms. Under the assumption of revenue maximization, the sensitivity of CU to a change in an individual product price is shown to be directly related to the product-specific scale elasticity. The results are given a simple graphical interpretation.     

A profit function approach to measuring productivity growth: The case of U.S. manufacturing

This article proposes a method of estimating productivity growth using an estimated profit function. The approach has the advantage of incorporating endogenous changes in profit-maximizing output levels that would result from productivity changes. As with the cost function, it can be easily adapted to accomodate the presence of quasi-fixed factors. The article first develops the methodology and shows the equivalence between the proposed measure and other measures of productivity based on cost or production functions. An empirical application to the measurement of productivity changes in the U.S. manufacturing industry is presented next. The profit-function measure is compared to a nonparametric measure based on the same data and to the results of other studies of U.S. manufacturing.The refereeing process of this paper was handled through J. deMelo.     

PRODUCTS LIABILITY WHEN CONSUMERS VARY IN THEIR SUSCEPTIBILITY TO HARM AND MAY MISPERCEIVE RISK

This article examines products liability when consumers have private information about their susceptibilities to product‐related harm. In this case, it is efficient for consumers to self‐select their purchases, with those especially prone to harm refraining from purchase. Achieving this outcome requires consumers to bear their own harm, given that producers cannot observe consumer types. When consumers also misperceive risk, the problem becomes more complicated because accurate signaling of risk requires that firms bear liability. A trade‐off therefore emerges between imposing liability on firms versus consumers. This article characterizes the choice among liability rules in the presence of this trade‐off. (JEL K13, L15)     

Experiments on Damage-Based Ambient Taxes for Nonpoint Source Polluters

This article presents experimental tests of a linear and a nonlinear ambient tax mechanism that involve modest information requirements for the regulator. When agents are not allowed to communicate, both tax mechanisms result in emission levels that approximate the social optimum. When agents can communicate, emissions are considerably below the optimum, but we show that the tax function can be scaled to achieve social efficiency. Finally, by disaggregating the overall efficiency measure, we show that changing the pollution threshold that triggers the tax increases the inefficiency resulting from variation in agent-level decisions, but does not affect average emissions.