Environmental Economics

SMDH*

The Lone Star state may be warning Elon Musk “Don’t mess with Texas” thanks to its newest Tesla (NASDAQ:TSLA) sales ban, but Musk doesn’t exactly seem to be running scared. In fact, his company just recently erected a new Supercharger station right on Texas grounds, conveniently halfway between Austin and San Antonio and behind the San Marcos Outlet Mall.

YNN reports that the Supercharger is the first of its kind in Texas, marking just one more benchmark in Tesla’s ultimate goal of constructing charging stations that span the nation’s roads and thus allowing Model S drivers to make coast-to-coast road-trip plans without having to worry about an uncharged sedan.

As of now, there are 18 Superchargers across the country, clustered mostly on both the West and East Coast. But this new charging station, smack-dab in the heart of Texas, proves that more and more Superchargers will soon make an appearance, whether U.S. states agree with Musk’s selling techniques or not.

Musk has his eye on Texas because the Lone Star state was the first of its kind to ban sales of the Model S within its borders. Texas lawmakers don’t like that Musk has removed the middlemen in the car-buying experience; the electric vehicle maker instead sells it product directly to consumers.

via wallstcheatsheet.com

A company that is trying to compete by streamlining a wasteful sales/negotiation process and selling direct to consumers.  The HORROR!

God Bless Texas (and North Carolina, Colorado and Virginia). (sarc)

*SMDH

 

Doing our part to promote the new Journal of the Association of Environmental and Resource Economists (JAERE) despite our conspicuous absence from the list of co-editors*

From the inbox:

1.What is the title of the new journal? 

 The new journal is called the Journal of the Association of Environmental and Resource Economists(JAERE).  This is no longer a placeholder.

 2.  Who will be the first editor?

We are delighted that Dan Phaneuf has agreed to become the first editor in chief of JAERE. Dan remains committed to managing and editing the Journal of Environmental Economics and Management (JEEM) until his contract expires and therefore cannot begin editing responsibilities for JAERE until January 1, 2014.  Thus, the AERE Board has appointed a transitional editorial team comprised of Don Fullerton (chair), Joe Herriges, and Chuck Mason.  This team brings years of editing experience to the table and they have already begun planning the first issue and taking submissions.

3.   Who will be the other members of the editorial team?

In preparing for the new journal’s launch, Dan Phaneuf and the transitional editorial team have begun assembling a team of co-editors. The goal is to involve a large group of visible people from different areas of environmental and resource economics in the editing process. The task of recruiting co-editors to this group is ongoing, but we are pleased to announce that so far the following people have agreed to participate:

Jen Alix-Garcia                        University of Wisconsin-Madison

Max Auffhammer                     University of California-Berkeley

Severin Borenstein                    University of California-Berkeley

Donald Fullerton                       University of Illinois at Urbana-Champaign

Michael Greenstone                 MIT

Joe Herriges                            Iowa State University

Stephen Holland                      University of North Carolina-Greensboro

Arik Levinson                            Georgetown University

John List                                   University of Chicago

Chuck Mason                            University of Wyoming

Daniel Millimet                         Southern Methodist University

Steve Polasky                          University of Minnesota

Kathleen Segerson                   University of Connecticut

Marty Smith                             Duke University

V. Kerry Smith                         Arizona State University

Chris Timmins                           Duke University

Christian Vossler                      University of Tennessee

Jim Wilen                                University of California-Davis

Catherine Wolfram                 University of California-Berkeley

4.   How will manuscripts be solicited for the first issues?

The transitional editors anticipate that they will publish a combination of solicited and contributed papers from top environmental and resource economists around the world. The process of developing content for the first issues is underway. If you have a paper you would like to have considered for one of the early issues, please contact Don Fullerton ([email protected]).

Our publisher, the University of Chicago Press (UCP), is organizing the official launch of the journal. Sometime soon, an online submission portal will be made available and announced. We expect the submission process to operate similarly to other UCP journals. There will be no submission fee initially.

 5.   What kinds of papers will JAERE publish?

While all editorial decisions lie with the editor and co-editors, both empirical and theoretical papers will be welcome in the journal. We expect that JAERE will have a mission similar to that of JEEM in the past, meaning the emphasis will be on full length, original research papers of the highest professional quality.

6.   When can we expect the first issue of JAERE to appear?

UCP and AERE have agreed to a target date of May/June 2014 to produce a double issue (approximately 10 articles).  There will either be a second double issue ready in late 2014 or two single issues. A full year of issues is needed to help get an impact factor rating.

7.   What will happen to manuscripts currently under review at JEEM?

JEEM will carry the Association’s label and logo up through the May 2014 issue. Papers that are currently well into the review process and accepted soon are likely to appear in the AERE-affiliated issues of JEEM. More recent submissions will likely appear after AERE’s affiliation has ended. Until January 2014, papers will be handled according to the same standards that authors and readers are accustomed to at the journal.  After that, handling of manuscripts would be up to the new JEEM editor and Elsevier.

8.   What will happen to JEEM?

To the best of our knowledge, JEEM will continue to exist as an Elsevier-owned journal.

9.   What should I tell my colleagues and department chair about why this new journal was started? Will it rank well? 

The explanation of why the AERE Board chose to launch a new journal is available on the AERE web site (www.aere.org). Please feel free to share it with all of your colleagues. While it is, of course, impossible to know how JAERE will perform in future journal rankings, it is the goal of AERE for JAERE to be the premiere research journal in environmental and resource economics. By launching the journal under a top editorial team and transitioning to a permanent editor with years of experience handling high quality research for the profession, we are confident that JAERE can quickly achieve this goal. You can help by submitting your best work to JAERE and by encouraging your colleagues to do the same.

10.Should AERE organize a boycott of journals that will compete with JAERE to help its launch?

NO!  As an individual, you are, of course, welcome to decide what journals you submit to, referee for, and read. But if AERE were to organize a boycott of competing journals or discourage participation with them, the Association may be liable under antitrust law. In addition, authors at JEEM deserve the same level of collegiality that they would get for publishing in any journal. 

11. Will I have to pay to receive a copy of JAERE?

One of the strengths of UCP’s offer as publisher was that each AERE member will receive online access to all JAERE content as a benefit of membership. This includes access to the full-run of the journal in PDF and HTML formats and any online-only supplemental material. In addition, UCP will make available JAERE print copies and e-Book Editions at a discount for purchase by AERE members.

12. What about my University or Institutions library? Will graduate students and others be able to get access to JAERE? 

UCP will promote and sell JAERE subscriptions to the 9,000 institutional customers with which it has existing relationships. It will also make special offers to customers who subscribe to its prestigious Business and Economics bundle (including Journal of Political Economy, Journal of Law and Economics, Journal of Labor Economics, etc.) and to large national and international buying groups or consortia. JAERE content will be available through databases and archives such as EBSCO and JSTOR, as well as through UCP’s Emerging Nations Initiative, which provides journal content free to approved institutions in developing economies.

13. How will the journal be marketed? 

AERE and UCP will work together to quickly develop name recognition, visibility, and usage for the journal. Look for a JAERE web page on the UCP site, brochures, calls-for-papers, and the prominent display of journal and Association information at all important meetings.

14. What can I do to help promote the journal? 

• ·Post brochures or calls-for-papers on your office doors or bulletin boards (to reach students and colleagues);
• ·Talk to your bibliographer/librarian who acquires serials in economics. Similarly, mention JAERE to colleagues who advise the library on acquisitions;
• ·Submit your papers to JAERE;
• ·Mention the new journal to colleagues at meetings;
• ·Email everyone on your professional contact list to tell them about the new journal and AERE switching its allegiance away from JEEM to JAERE.  Remember that only about 25 percent of JEEM submissions are from current AERE members.  So it is important to reach beyond the AERE membership. 
• ·If you or others you know are not AERE members currently, please join and ask your friends and colleagues to join and take advantage of free online access to JAERE.  Membership information for 2014 will be posted on the AERE web page this fall.

*But they are still recruiting, so there's still hope.

Nail in the coffin?

[Follow-up: here]

Arik Levinson in a NBER Working Paper No. 19329 finds a problem with CVM that Hausman (2012) ignored:

The best-financed, highest-profile CV study to date was conducted after the Exxon Valdez oil spill. Its central findings, reproduced in Table 1, illustrate CV's biases. After 4 describing the accident and the policy to prevent another, surveyors randomly assigned respondents to one of four versions of the questionnaire. In version A, respondents were first asked if they would support the policy if it cost them $10. If they said yes, the follow-up asked if they would support the policy if it cost $30. If instead they said no, the follow-up asked if they would support the policy at $5. Version B started at $30 and asked follow-ups at $10 and $60, and so on. Here's the problem. Suppose we want to estimate the fraction of the population willing to pay between $30 and $60 for the policy. There are multiple equally valid ways to calculate that number. Those who answered yes to the first question of version B but no to the follow-up have expressed willingness to pay at least $30 but not $60. They represent 26 percent of the randomly chosen respondents given version B of the survey. People who answered no to the first question of version C but yes to the follow-up are not willing to pay $60 and are willing to pay $30. They represent 10 percent of version C recipients. Or here's a third way. Of those given version B, 52 percent answered yes to the first question, and are willing to pay at least $30. Of those given version C, 50 percent answered no to the first question, and are unwilling to pay $60. The difference suggests only 2 percent were willing to pay between $30 and $60. So which is it, 26 percent, 10 percent, or 2 percent? The answer clearly depends on the sequence with which questions are asked. Something distinctly behavioral is biasing the respondents' answers.

Other than this 1997 Land Economics paper and a bunch of the 222 papers that have cited it, I wonder if anyone has considered this issue?

And, yes, I do realize that these defensive rants may be Krugmanesquely uncivil.

"A proposed RePEc fantasy league"

The RePEc Blog

Back on the 1st of April (Fool’s Day) of this year, I introduced the RePEc fantasy league. While this post was to be more on the humorous side, many people took it seriously. And interest for th league is unabated, with several people recently asking about it. So I guess there is sufficient demand, and it looks like it could be fun to play with economists. Hence, I want to make a proposal, ask for comments, and let people vote whether such a fantasy league should be run.

Here is the proposal. As the publishing output of economists is rather slow-moving and there is no defined season for play, the league is set up for continuous entry and play is on an infinite horizon. A set of rules has been drafted, and I welcome comments about them, especially from those who are more used to play in this kind of league.

For those who are worried that they could be virtually subject to trades, there would be the ability to opt out from being played with.

Beyond fine-tuning rules, there is also the question whether such a league should be run at all. Below is a poll that will be open for a month. Feel free to vote.

I voted yes.

Contingent valuation sucks, see Hausman (2012) ... Q.E.D.

[Follow-up: here]

Arik Levinson in a NBER Working Paper No. 19329 taking an interesting look at happiness economics: 

To many economists this contingent valuation (CV) approach is an anathema. Conventional economics is about revealed preferences, not surveyed preferences. Hausman (2012) writes that CV respondents are "essentially inventing their answers on the fly, in a way which makes the resulting data useless for serious analysis." Even CV supporters have come up with a taxonomy of biases associated with the practice. Hypothetical bias refers to the fact that respondents don't actually have to pay for the good in question and do not face tangible budget constraints. Embedding refers to the fact that respondents may answer a question about willingness to pay to clean up one river by answering with the value they place on clean water everywhere. Some responses appear strategic: environmentalists claim implausibly high WTP in the hopes of influencing policy, or zero WTP on the grounds that polluters should be responsible for cleanup costs. To some, these biases call into question the legitimacy of contingent valuation.

To me, a list of biases developed by practitioners does not call into question the legitimacy of contingent valuation. To me, that is the process of research and contingent valuation has been improved because of it. The travel cost method has progressed from zonal models to single site models to random utility models as researchers have developed a list of biases associated with each approach. Measurement error in the key variable, the travel cost, is still a concern. The travel cost method has never been called an anathema and its list of biases does not make it illegitimate. I'm sure I could tell a similar story for hedonic methods and other research areas if I were more familiar with them. 

One concern with Hausman (2012) was that it would be used as a red flag to desk reject contingent valuation papers (see here and here for previous posts with other concerns). It may be happening. Hausman (2012) is the only contingent valuation paper cited in Levinson (2012). There is not even a citation to "The best-financed, highest-profile CV study to date ..." (page 3).

Here is Levinson's conclusion:

The pessimistic view was stated by Schwarz and Starck (1999) even before the recent growth of policy applications began: “What is being assessed, and how, seems too context dependent to provide reliable information about a population’s well-being, let alone information that can guide public policy.” If that seems too negative, recall that other methods of valuing public goods are not without their own biases and unaddressed issues. Contingent value responses vary wildly based on the nature of the questions asked, and hedonic regressions may be skewed if home purchasers exhibit projection bias. Although travel cost models, hedonic regressions, and contingent valuations are not without unsolved problems, they have become mainstream tools for cost-benefit analysis and other policy applications. The past 10 years have seen the introduction of happiness economics as a new tool for answering important policy questions, a tool with its own new set of hurdles and biases that must be confronted. Whether in coming years we can learn enough about those biases to make happiness a policy tool on par with the others remains to be seen, but in the meantime there's no doubt the process will be interesting.

I agree that happiness economics is interesting and a place where economists should devote their attention. But using a lazy cite to Hausman (2012) and a list of well-known contingent valuation method biases does not seem like the best way to motivate that endeavor. 

I didn't know that my mom could use a computer*

From the inbox:

Dear John C. Whitehead:

Your paper, "A RECREATION DEMAND MODEL OF THE NORTH CAROLINA FOR-HIRE FISHERY", was recently listed on SSRN's Top Ten download list for: ERN: Other Econometrics: Applied Econometric Modeling in Agriculture, Natural Resource, & Environmental Economics (Topic).

As of 21 August 2013, your paper has been downloaded 16 times. You may view the abstract and download statistics at: http://ssrn.com/abstract=2284939.

Top Ten Lists are updated on a daily basis. Click the following link(s) to view the Top Ten list for:

ERN: Other Econometrics: Applied Econometric Modeling in Agriculture, Natural Resource, & Environmental Economics (Topic) Top Ten.

More evidence that if the pond is small enough, you can make the top ten. This pond is so small that we rank #3 out of three papers. 

*Mom: you can stop downloading my paper now.

Quote of the Day

A leaked draft of a forthcoming report from the Intergovenmental Panel on Climate Change finds that scientists are 95 percent sure that humans are causing global warming. The 2007 report hedged a tiny bit on human culpability, stating that there was only a 90 percent chance that humans were causing warming; but six years later, climatologists are more sure than ever.

“It is extremely likely that human influence on climate caused more than half of the observed increase in global average surface temperature from 1951 to 2010,” the draft report says, according to the New York Times. “There is high confidence that this has warmed the ocean, melted snow and ice, raised global mean sea level and changed some climate extremes in the second half of the 20th century.”

via news.yahoo.com

Clash of the Titans

I will be getting a new boss sometime in the next year or so...here's a rumor:

If you’re going to dream, you might as well dream big.

That seems to be the thinking among a growing number of Columbus’ business and social titans as they consider who would be a good replacement for retired Ohio State University President E. Gordon Gee.

In addition to the usual academic suspects, a name that’s being tossed about with increasing fervor is former U.S. Secretary of State Condoleezza Rice.

To be fair, Rice knows her way around the hallowed halls of a college campus. She’s a former provost and current professor in the graduate school of business at Stanford University.

Many say she might be just the kind of out-of-the-box leader that Ohio State needs. As to whether she would be interested in the job, Rice has been mum about the rumors.

via www.dispatch.com

Business and social titans?

If only we could figure out a way to value dolphins

Warning, blatant self-and-John-promotion ahead.

So I was reading this CNN story this morning about the recent increase in bottlenose dolphin deaths on the east coast.

The carcasses of dozens of the marine mammals, seven times more than normal, have been washing up on beaches this summer, and scientists are struggling for answers to the die-off.

In Virginia alone, at least 164 dead dolphins have been found this year, said Joan M. Barns, public relations manager for the Virginia Aquarium in Virginia Beach. Almost half of those, 78, have washed ashore in August, she said.

As of Tuesday, federal authorities say, they have recorded 228 dolphin deaths this year from New York to Virginia. In all of 2012, 111 deaths were recorded.

'Why,' you ask, 'would I bother reading about dolphins?' Well, I'm glad you asked.  First, dolphins are cute.  And B), I seem to have spent a significant portion of my adult life studying ways to use economics to inform decision makers on environmental and natural resource disasters.  So, upon reading of an anomolous (that's odd) increase in dolphin deaths, I naturally wonder, what are the costs of dolphin deaths, and what are the benefits of preventing dolphin deaths? 

So how do I find teh value of a dolphin.  Naturally I turn to the only reliable source for finding such information...Google.  So I Googled 'value of a dolhin.'  No, reallym, that's what I Googled.  because my typing skills suck.  Fortunately, Google planned for my sucky typing skills and gave me results for 'value of a dolphin.'*

The first entry that came up was this Guardian story from 2012 asking, fortuitously, 'how much is a dolphin worth?'   Using my amazing powers of recognition, I recognized the potential usefulness of the story and read:

At its most basic, the process now consuming teams of BP and government scientists and lawyers revolves around this: How much is a dolphin worth, and how exactly did it die?

...

"It is extraordinarily difficult to monetise environmental harm. What dollar value do we place on a destroyed marsh or the loss of a spawning ground? What is the price associated with killing birds and marine mammals? Even if we were capable of meaningfully establishing a price for ecological harm, there is so much that we do not know about the harm to the Gulf of Mexico – and will not know for years – that it may never be possible to come up with an accurate natural resource damage assessment," said David Uhlmann, a law professor at the University of Michigan and a former head of the justice department's environmental crimes section.

Warning: Snark ahead. Well, gee, if only the lawyers could figure out a way to value environmental harm?  Or a way to place a dollar value on dead birds or marine mammals.  Maybe, just maybe, a bunch of people should get together and think about how lessons learned from how people place values on things like blenders and hamburgers can be translated into ways to place values on things like oil spills, or fish kills, or fish species, or natural hazard mitigation.  And, maybe, with some pie-in-the-sky thinking, these new methods for valuing the impossible might develop to the point where someone could write a book explaining the methods with an obtuse title like "Valuing Environmental and Natural Resources."

Maybe.  Oh, Maybe.  Someday.  One can hope.

*Have I ever mentioned that I am convinced that Google is the greatest invention ever? 

Picture of the day: international trade

Here I am in the Cape Fear River just south of Wilmington being a tourist. The captain of the tour boat said that this ship was unloading corn from Brazil.