Environmental Economics

Recommended reading: Another important VSL paper

Why not?

Monetizing Bowser: A Contingent Valuation of the Statistical Value of Dog Life

Deven Carlson, Simon Haeder, Hank Jenkins-Smith, Joseph Ripberger 

Abstract

Households in the USA spend about $70 billion annually on pets. Dogs, the most common pet, can be found in nearly half of American households. An important shadow price in the analysis of policies affecting human mortality is the value of statistical life (VSL), which is imputed from how people make decisions involving tradeoffs between small mortality risks and other goods. The value of statistical dog life (VSDL) is also an important, but until now unavailable, shadow price for use in regulation of such goods as pet foods and environmental toxins. Additionally, an estimate of the VSDL would have uses outside the regulatory process in valuing programs involving zooeyia, in setting tort awards for wrongful dog death, and in property divisions in divorce settlements where joint custody of dogs is not feasible. In order to estimate the VSDL, we conducted a contingent valuation of a national sample of dog owners that elicited willingness-to-pay for changes in mortality risk for pet dogs. Specifically, respondents were asked about willingness-to-pay for a vaccine that would reduce the risk of canine influenza. The design included both quantity (different magnitudes of risk reduction from the offered vaccine) and quality (differences in nature of death from the influenza) treatments as scope tests. It also included treatments involving spillover effects to other dogs and a priming question about disposable income. Based on the analysis and consideration of its assumptions, we recommend $10,000 as the VSDL.

Journal of Benefit-Cost Analysis, November 11, 2019

DOI: https://doi.org/10.1017/bca.2019.33 

Clean Air Act and Clean Water Act Symposium in Journal of Economic Perspectives

The most recent issue of the Journal of Economic Perspectives features a three-article symposium on the 50th anniversary of the Clean Air and Clean Water Acts. (Though that's an iffy anniversary: the CWA was passed in 1972, so it's only 50 with rounding, and the CAA was originally passed in 1963, though the 1970 amendments contained much of the most important stuff.)

In the first article, Janet Currie and Reed Walker provide "a reflection on the 50-year anniversary of the formation of the Environmental Protection Agency, describing what economic research says about the ways in which the Clean Air Act has shaped our society—in terms of costs, benefits, and important distributional concerns."

In the second article, Richard Schmalensee and Robert Stavins discuss the evolution of the CAA over time: "We trace and assess the historical evolution of the Environmental Protection Agency's policy instrument use, with particular focus on the increased use of market-based policy instruments, beginning in the 1970s and culminating in the 1990s."

In the third article, David Keiser and Joseph Shapiro study the CWA and the Safe Drinking Water Act. They summarize four main conclusions: "First, water pollution has fallen since these laws were passed, in part due to their interventions. Second, investments made under these laws could be more cost effective. Third, most recent studies estimate benefits of cleaning up pollution in rivers and lakes that are less than the costs ... Fourth, economic research and teaching on water pollution are relatively uncommon."

Yucks and grins

From the Stand-up Economist email: 

Details on upcoming shows: See my web calendar for all the details, but FYI the San Diego show in January is the 12th Annual American Economic Association Humor Session at the ASSA conference, where I'll also be a discussant on a (serious) paper at an environmental economics session on Friday afternoon. The Humor Session, free and open to the public on Saturday night, will feature (among other acts) Dave McEvoy presenting a paper on "Willingness Toupee" and yours truly joining Mandie Weinandt for a routine / parody called "The 2000-Year-Old Economist". Fun!