| Abstract: | In this paper we consider environmental damage evaluation using two types of econometric models to analyse tree damage due to acid deposits, using cross-country data for several European countries. First, we use a set of univariate Poisson models and second, a multinomial probit model with the difference that we do not observe class specific data. The damage function is parameterized in terms of a number of economic and environmental variables. Statistical inference is conducted using Bayesian methods relying on Markov Chain Monte Carlo simulation. Natural by-products of our method include an implied ranking of countries according to environmental damage, and (exact, finite sample) posterior distributions of average country-specific environmental damage. |
