Valuing nature in a general equilibrium

We explore the consequences of modeling the demand for environmental quality improvements as a fully integrated part of a general equilibrium demand system in an applied general equilibrium (or CGE) analysis. Demand for non-market goods depends on a full range of relative prices as well as environmental outcomes. We simulate the effects of reducing two air pollutants to improve human health and three ecosystem services provided to households. The ecosystem services make non-separable contributions to household utility. We find that willingness to pay measures of use-based ecosystem services are impacted by changes in demand for complementary market goods. Demand for these goods shifts due to pollution reductions that enhance ecosystem services. Partial equilibrium estimates of these use values can be measured with substantial error if they fail to account for the general equilibrium adjustments caused by pollution. Over 300 calibrations of the model identify the model features important to these errors. We find that effects on ecosystem services associated with non-use values have important implications for the feedback effects on use related measures of economic tradeoffs. This is due to how our model integrates market and non-market effects, reflecting the non-market services importance to general equilibrium market outcomes.     

The influence of individuals in forming collective household preferences for water quality

Preference for water quality and its nonmarket valuation can be used to inform the development of pricing policies and long term supply strategies. Tap water quality is a household concern. The objective status quo of water provision varies between households and not between individuals within households, while charges are levied on households not individuals. Individual preferences differ from collective preferences. In households where there are two adults, we examine the preferences of each separately and then as a couple in collective decisions. We show the level of influence each has in developing the collective decision process. We use discrete choice experiments to model preference heterogeneity across three experiments on women, men and on both. We propose a random utility model which decomposes the error structure in the utility of alternatives so as to identify the individual influence in collective decisions. This approach to choice data analysis is new to environmental economics.     

Leading from the front? Social networks in navigating groups

In many group-living animals, leadership by only a fraction of the group members can be important for group navigation. It has been shown that subgroups of informed individuals can steer the remainder of the group without direct communication, resolving conflicts of interest through individual-to-individual interactions. We present a model for the navigation of collectively moving groups that includes preferential interactions between individuals as a way of imposing social network structures, known to be present in many species. We show that effective leadership can occur when leaders do not occupy frontal spatial positions and when navigation tendency is appropriately balanced with social position. Our model also shows that small minorities can dominate movement decisions if they have navigational knowledge combined with influential social network positions. Our findings highlight the mechanistic importance of social networks for the movement decisions of animal groups. We discuss the implications of our research for interpreting empirical observations.     

Intertemporal and intergenerational Pareto efficiency

Efficiency conditions are derived for both private and public goods which provide benefits over time. In deriving these conditions, the paper extends the notion of efficiency to an intertemporal Pareto-optimal concept requiring the maximization of the ith individual's utility at a point of time subject to the constancy of his utility in all future periods and that of all other individuals during the relevant time span. By permitting births and deaths, a generalization of the basic model recasts the analysis into an intergenerational setting. Additional extensions involve learning by doing and perpetual public goods. The paper concludes that several of the conventional practices in public expenditure analysis do not conform to our definition of intertemporal Pareto efficiency.     

Sequencing and Valuing Public Goods

This paper establishes several propositions concerning the importance of context in valuing public goods. It first provides necessary and sufficient conditions for the value of a public good to be independent of context. Utility-constant valuation sequences are considered where public goods are systematically made available or taken away. For the case of strict Hicksian substitutes, willingness to pay for an increase in one of the public goods is strictly decreasing the farther out in a sequence it is valued. For the destruction of public goods the reverse is true for willingness to accept compensation. Sequencing has opposite implications for the assessment of the benefits of providing public goods than for the assessment of the damage from destroying them.     

Valuing eco-assets: A note on valuation methods

SUMMARY

The valuation of eco-assets should take into account the perceptions and judgments of the public. However, the value of eco-assets based on conventional calculations has often been unreliable as a result of differing situations and individuals involved. Therefore, a reasonable and efficient method for valuing eco-assets is needed. In this paper, a brief summary of the history of valuing eco-assets is provided, followed by a summary of conventional methods of valuation. This summary of the currently used methods revealed that they do not take into account the effect of the stage and development of the population determining the value of the eco-assets. Therefore, we have developed a social development stage coefficient (l), based on Engel's coefficient. A new valuation method was then created by integrating the development stage coefficient (l) with a conventional model. Finally, possible future strategies for valuing eco-assets are discussed.     

Alternative Non-market Value-Elicitation Methods: Are the Underlying Preferences the Same?

We advocate a more formal structural approach for comparing WTP for non-market or pre-test-market goods conveyed by fundamentally different preference elicitation mechanisms. Seven independent samples of respondents were asked to value the identical good. Elicitation methods include one actual purchase and six widely used hypothetical choice formats. Using a common underlying indirect utility function (and stochastic structure) allows data for different elicitation methods to be used independently, compared pair-wise (as in much of the earlier literature) or pooled across all samples in one unified model with heteroscedasticity across elicitation methods. Our differences in estimated WTP for the individual models are typical of earlier findings. However, pooled-data models that allow for heteroscedasticity reveal that while there are substantial differences in the amount of noise in the different samples, a common underlying systematic component of the preference structure cannot be rejected for at least four (and possibly five) of these seven elicitation methods.     

Valuation of human health: An integrated model of willingness to pay for mortality and morbidity risk reductions

This paper develops and applies an integrated model of mortality and morbidity valuation that is consistent with the principles of welfare economics. To obtain the integrated model, the standard one-period expected utility model of one person facing the prospect of either being alive or dead is extended to incorporate (1) a third health state (sick) with a utility level that is intermediate to utility if healthy and utility if dead, (2) a family perspective in which a parent makes choices about risk exposure both for herself and for a child, and (3) a multi-period framework that allows for possible parent/child differences in illness latency. Monetary benefits of health risk reduction obtained from the integrated model are compared with those that would be computed using the standard model. The integrated model then is applied using data obtained from two field studies of skin cancer and leukemia to demonstrate how it can be used to estimate health benefits of reduced illness and death risks.     

Willingness to pay for clean air in China

We use a residential sorting model incorporating migration disutility to recover the implicit value of clean air in China. The model is estimated using China Population Census Data along with PM2.5 satellite data. Our study provides new evidence on the willingness to pay for air quality improvements in developing countries and is the first application of an equilibrium sorting model to the valuation of non-market amenities in China. We employ two instrumental variables based on coal-fired electricity generation and wind direction to address the endogeneity of local air pollution. Results suggest important differences between the residential sorting model and a conventional hedonic model, highlighting the role of moving costs and the discreteness of the choice set. Our sorting results indicate that the economic value of air quality improvement associated with a one-unit decline in PM2.5 concentration is up to $8.83 billion for all Chinese households in 2005.     

The economic impact of the invasion of Acacia saligna in Israel

This paper illustrates the use of alternative, non-market valuation methods to estimate the economic value of ecological damage caused by the invasive plant Acacia saligna. We discuss the motivation to perform an economic valuation for bio-invasion in general and then examine the costs and benefits of conservation management programmes that reduce the risk of A. saligna invasion at the Nizzanim Long-Term Ecosystem Research (LTER) nature reserve in Israel. The study found that the annual mean willingness to pay (WTP) for containment or eradication of A. saligna was US$8.41 and US$8.83, respectively. The value placed on conserving the nature reserve was then compared to the cost of containment or eradication of the species, enabling a standard economic benefit–cost analysis. The result of this analysis showed that, using the most conservative method of valuation of the nature reserve, eradication of A. saligna gave a net benefit.     

Bridging the gap between laboratory experiments and naturally occurring markets: An inferred valuation method

Several recent studies have found important differences between behavior in the laboratory and the field. We explore two possible causes for the divergence: social concerns and unfamiliarity with the traded good. Consistent with our conceptual model, we find that people overstated their preferences for relatively familiar goods with normative attributes and understated their preferences for a relatively unfamiliar good with low normative motivations in the laboratory as compared to the field. We also find that for goods with a normative dimension, a new method we refer to as inferred valuation has the potential to narrow the lab–field gap. In some cases, willingness-to-pay obtained from a conventional valuation elicitation method is more than twice the value from the new inferred valuation approach.     

Territorial resource valuation deviates from habitat quality in an ecologically trapped,long-distance migratory bird

Preference measures are widely used in habitat selection studies to test an animal’s choice relative to particular habitat features, but most measures are subject to criticism as they fail to indicate the underlying behavioral motivation. Order of settlement on breeding sites has been proposed as an effective measure in migratory organisms, as it conceptually approaches a choice experiment. We tested the assumption that early red-backed shrikes (Lanius collurio) are more willing to defend their territorial resource than individuals arriving later. We earlier showed that shrikes arriving first settled in forest plantations that resulted in lower reproductive success compared to territories on farmland, suggesting an ecological trap. Therefore, individuals are expected to place higher value on the lower quality sites in forests. Within the context of resource valuation theory in animal contests, we used a simulated territorial intrusion experiment to measure territorial defense and to evaluate the perceived value of the territory during the settlement phase in both habitat types. Males arriving early were much more motivated to defend their territory than late birds. After correction for the disparity in the timing of arrival between habitat types, shrikes also more vigorously defended their territories in the forest habitat associated with the lowest reproductive returns. Although some resource valuation mechanisms remain unclear, our results show that early and late-arriving individuals strongly differ in behavioral motivation to hold their territorial resources. This study also demonstrates for the first time that organisms may exhibit a higher degree of territorial aggressiveness in a lower quality habitat.     

Pigou meets Mirrlees: On the irrelevance of tax distortions for the second-best Pigouvian tax

This paper extends the Mirrlees (1971) model of optimal income redistribution with optimal corrective taxes to internalize consumption externalities. Using general utility structures and exploring both linear and non-linear taxes, it is demonstrated that the optimal second-best tax on an externality-generating good should not be corrected for the marginal cost of public funds, since it equals one in the optimal tax system. In the optimum, distortions of income taxes are equal to marginal redistributional gains. If the government does not have access to a non-distortionary marginal source of finance, the marginal cost of public funds can be either larger or smaller than one depending on subjective preferences for income redistribution. The optimal second-best corrective tax is then either higher or lower than the Pigouvian level. The findings in this paper generalize and amend prior results based on representative-agent models, shedding new light on the weak double-dividend hypothesis, and on the welfare gains of recycling revenue from environmental taxes.     

Disadvantages and future research directions in valuation of ecosystem services in China

We have reviewed the development, background and valuation history of ecosystem services in China and abroad, and highlight the importance of ecosystem services and the necessity of their valuation at various temporal and spatial scales. Through critical review of the literature, we have elucidated disadvantages in studies of ecosystem services in China, including the lack of a definite purpose for the valuation of ecosystem services, improper emphasis of valuation studies, stifled application of the contingent valuation method, weak power of research panels in the field, and the absence of the participation of government officials. In addition, we discuss some case studies from Western countries which tracked changes in the total economic value (TEV) of ecosystem services across different states of ecological disturbance and evaluated changes in the TEV under different management regimes. These studies may be useful in guiding future research in China. In essence, there are three major aspects involved in the valuation of ecosystem services: improving accuracy of valuation, association of results of valuation with policy and management decisions, and transfer of payments for ecosystem services. We suggest three priorities for future research in China: to develop an ecosystem service valuation model, to enhance the relevance of valuation studies to policy development, and to reward the protectors of ecosystem services.     

Self-insurance against natural disasters

Expenditures on self-insurance to mitigate the effects of natural disasters on the value of private assets are examined in a model where individuals are partially insured against financial loss by a public relief program and where private insurance is unavailable. The model predicts that optimal private expenditures on self-insurance will be excessive or insufficient according to the nature of the technology by which individuals protect their assets. The comparative static effects of variations in the level of public compensation, individual wealth, and attitudes toward risk and the degree of environmental uncertainty on self-insurance expenditures and on the magnitude and frequency of public compensation are also characterized and their implications for remedial government policies are examined.     

Evidence of variable discount rates and non-standard discounting in mortality risk valuation

Time discounting is central to the valuation of future health and mortality risks in public sector allocative decision-making, particularly for environmental policies with delayed health impacts. Using a Risk-Risk trade-off survey, we elicit discount rates for fatality risks and establish discounting functional forms on both a sample and an individual level. We find wide variation in implicit discount rates for fatality risk between individuals, as well as between-individual heterogeneity in discounting functional forms. In aggregate, the sample is best characterised by subadditive discounting. Our work has implications for the academic investigation of intertemporal choice involving mortality risks, and potentially for the evaluation of policy options with delayed mortality risk outcomes. A thought experiment cautions against the standard practice of assuming that exponential discounting characterises society's time preferences.     

Ease vs. noise: Long-run changes in the value of transport (dis)amenities

For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We use difference-in-differences and spatial differencing to estimate the land price capitalization effects of metro rail in Berlin, Germany today and a century ago. Over this period, the negative implicit hedonic price of rail noise tripled. Our results imply income elasticities of the value of noise reduction and transport access of 2.2 and 1.4, substantially exceeding cross-sectional contingent valuation estimates.     

BP模型的改进及其在大气污染预报中的应用

针对传统BP模型存在着训练速度较慢、局部极值以及最佳网络结构无法准确确定的不足，进行了改进，应用于城市空气污染预报，建立大气污染浓度的神经网络预测模型。计算结果表明，应用改进的BP模型进行大气污染预报能够得到更好的预测结果，具有很强的实用性。     

Who should wear mask against airborne infections? Altering the contact network for controlling the spread of contagious diseases

There are several ways of controlling the propagation of a contagious disease. For instance, to reduce the spreading of an airborne infection, individuals can be encouraged to remain in their homes and/or to wear face masks outside their domiciles. However, when a limited amount of masks is available, who should use them: the susceptible subjects, the infective persons or both populations? Here we employ susceptible-infective-recovered (SIR) models described in terms of ordinary differential equations and probabilistic cellular automata in order to investigate how the deletion of links in the random complex network representing the social contacts among individuals affects the dynamics of a contagious disease. The inspiration for this study comes from recent discussions about the impact of measures usually recommended by health public organizations for preventing the propagation of the swine influenza A (H1N1) virus. Our answer to this question can be valid for other eco-epidemiological systems.