Air pollution—both indoor and outdoor—results in more deaths and diseases in India than in any other country in the world. The first chapter in this dissertation explores why despite profoundly negative health consequences of indoor air pollution, most rural Indian households cook using traditional biomass fuel. Among many factors that contribute to households’ continued use of solid fuels, we focus on one: women’s intra-household status. We exploit Indian son preference: having a girl first child lowers women’s status relative to having a boy first child, and is therefore associated with lower likelihood of using clean fuel. This effect is found throughout the wealth distribution, and is not concentrated among households in states with a high child sex ratio or households where women have some education. The second chapter focuses on outdoor air pollution in India. We use a general equilibrium model of Indian economy to quantify the spillovers from a carbon tax on fossil fuels to local air quality and the health outcomes in urban India. We estimate that a $10/ton of Carbon tax on all fossil fuels will reduce CO2 emission by 10.7% from business-as-usual and save nearly 0.3 million urban lives from pollution related deaths while adding 0.2 percent to the GDP over the three decades from 2003 to 2030. We get this double dividend from carbon tax if the tax revenue is used to reduce existing distortionary taxes. Carbon tax is more progressive if the revenue is repatriated to households, but the GDP is slightly smaller than the base case under this regime. In the third chapter, we present the first VSL estimates from India using hedonic wage method with worker and job characteristics data from Employment and Unemployment Survey of India (EUS)—a large nationally representative survey that has not been used in this literature before. We estimate VSL of an average low-skilled urban Indian worker to be about $85,000 in 2004-05 (about 65 times the annual wage) at 2010 constant prices. Our estimates of VSL and VSL-to-income ratio are much lower than all previous estimates from India. Comparisons with estimates from other developing countries like China and Taiwan, however, suggest that our estimates are more reasonable. Our VSL estimate, if reliable, sets a lower threshold for investment in environment and public safety projects that can be justified using cost-benefit criteria.

Ecological economics and its policy recommendations have become overwhelmed by economic valuation, shadow pricing, sustainability measures, and squeezing Nature into the commodity boxes of goods, services and capital in order to make it part of mainstream economic, financial and banking discourses. There are deeper concerns which touch upon the understanding of humanity in its various social, psychological, political and ethical facets. The relationship with Nature proposed by the ecological economics movement has the potential to be far reaching. However, this is not the picture portrayed by surveying the amassed body of articles from this journal or by many of those claiming affiliation. A shallow movement, allied to a business as usual politics and economy, has become dominant and imposes its preoccupation with mainstream economic concepts and values. If, instead, ecological economists choose a path deep into the world of interdisciplinary endeavour they will need to be prepared to transform themselves and society. The implications go far beyond the pragmatic use of magic numbers to convince politicians and the public that ecology still has something relevant to say in the 21st Century. (author's abstract) / Series: SRE - Discussion Papers

In the first essay, I assess the effect of indoor air quality (IAQ) in school buildings on student test performance and attendance rates. Results indicate that performance on standardized tests significantly improves while attendance rates are unresponsive to improvements in IAQ. The improvement in math scores ranges from 0.102 - 0.189 standard deviations per $500,000 spent on IAQ-related renovations and is 35% - 50% greater than the improvement in reading scores. For the same budget, results suggest that the improvement in math scores following IAQ-related renovations is several times larger than the improvement associated with class size reductions. In the second essay, I examine the responsiveness of the daily labor supply of fishermen to transitory variations in the daily wage using data from the Florida spiny lobster fishery. The applicability of this research is both narrow and general. Understanding this relationship is key to determining the effectiveness of landing fees as a means to regulate fisheries. Tracing out the labor supply curve is also fundamental to labor economics and policy. I find that the wage elasticity of labor supply (participation) is positive and statistically different from zero, with a point estimate of 0.967. This suggests an upward slopping labor supply curve and refutes the notion of reference dependent preferences. In the third essay, I examine the bias associated with ignoring the multi-species aspect of labor supply decisions in spatially explicit bioeconomic fishery models. Using a complete 15-year panel of all fishing trips made by fishermen possessing a Florida spiny lobster license, including non-lobster trips, I show that the simplifying assumption of a dichotomous choice structure at the first node (i.e. participate in the target fishery or not) is not innocuous and that predicted participation rates can change substantially with the addition of another species as an outside alternative in the first decision node. / text

Unchecked anthropogenic climate change has the potential to destroy human lives and wealth on an unprecedented scale. This dissertation analyzes from an economic perspective various public policy options to correct the market failures caused by climate change. The widespread adoption of environmentally friendly consumer products can reduce the impacts of climate change. The first chapter analyzes various methods of encouraging the market performance of these products. I build a model of observational learning in which a "green" consumer good enters a market to challenge an established "dirty" product. Among other results, I provide conditions for when financial incentives or informational campaigns should be more effective at encouraging the market performance of green products. I also provide a discussion and an empirical analysis of the performance of compact fluorescent light bulbs in the U.S. residential market, and compare the findings to the predictions of the theoretical model. The second chapter provides a critic of the macroeconomic models economists have used to determine optimal climate change abatement policies. I build a model that can incorporate more realistic ranges of uncertainty for both the occurrence of catastrophic events and societal risk aversion than economists have used in the past. Numerical simulations are then used to calculate a range of risk premiums, the magnitude of which display that previous calculations of optimal carbon dioxide taxes are too imprecise to support any particular policy recommendation. Government-backed energy-efficiency programs have become popular as components of local and national strategies to combat climate change. The effectiveness of such policies hinges on whether they provide the appropriate incentives to both energy consumers and program implementers. The third chapter analyzes evaluations of California's energy-efficiency programs to assess their effectiveness at improving our understanding of the programs' performance and providing a check on utility incentives to overstate energy savings. We find, among other results, that evaluations are useful tools to achieve both of these goals because the programs largely did not meet their energy-savings projections, and the utility savings estimates are systematically higher than the third-party savings estimates of the evaluations. / text

<p>The essays in applied microeconomics contained within this dissertation examine prices in the developing economy contexts of Indonesia and the Philippines. Prices, observed and unobserved, are determined by and incentivize the behavior of all agents in the economy. Prices describe the interaction of individuals within a household and households within a market and reveal traits critical for development. Traits such as the efficiency of household resource allocations and the completeness of markets are analyzed in Central Java, Indonesia using a rich, longitudinal survey containing detailed price data used to estimate household demand systems. Unobserved, implicit prices of environmental goods are analyzed in the context of the Philippines. The valuation of environmental quality's implicit price is illustrated by comparing the health and human capital outcomes of the highly and least exposed. Exposure to environmental toxins can produce short and long-term damages to health and human capital reflecting undervaluation of the implicit price of environmental quality. The combined results of these essays on prices in development economics reveal allocation inefficiencies within the household and the economy and provide direction for development policy around the world.</p> / Dissertation

The purpose of this thesis is to investigate the development of new technologies in the energy industry and to explore how it is possible for these technologies to compete with incumbent technologies in a mature market. The pursuit of renewable energy has been at the forefront of national government and international institutional policy in recent years due to the desire to improve the security of energy supply and to reduce CO2e emissions. This thesis aims to contribute to this policy debate, particularly by focussing on the issue of governmental support for infant energy technologies. In order to conduct this investigation, two main topics have been analysed. Firstly, learning curves have been studied to establish whether support for new technologies can be justified by the potential cost reductions which arise from learning-by-doing. This research evolved into the investigation of econometric issues which affect learning curves. Patent counts are used to demonstrate an alternative output-based measurement of industry wide knowledge stock, which is used as a proxy for innovation. This alternative specification of knowledge stock corroborates recent findings in the literature, that learning curves which model cost using only cumulative capacity leads to the over-estimation of cost reductions from learning-by-doing and the failure to capture cost reductions resulting from innovation. This suggests that government support for infant technologies should form a dual strategy of incentivising the deployment of generators as well as encouraging innovation, instead of using feed-in tariffs or renewable obligations which narrowly focus on increasing deployment. A great deal of progress has been made in identifying further econometric problems affecting learning curves in recent years. In the progress of this study, it was identified that cumulative capacity, the cost of wind power and knowledge stock are all non-stationary time series variables. The hypothesis that these variables are cointegrated was rejected by the Westerlund test, which implies that learning curves produce spurious results. This has major consequences for government policy as it suggests that learning curves should not be used to justify support for infant technologies. Secondly, a choice experiment was conducted to determine Scottish households’ willingness to pay for electricity generated from renewable sources compared to conventional sources such as coal, oil and gas. A labelled choice experiment was used to determine whether households have preferences between onshore wind power, offshore wind power and wave power. The results of a latent class model reveal that the majority of households (76.5%) are willing to pay an additional £89-£196 per year to obtain electricity from renewable resources instead of conventional sources. However, there is no statistically significant difference in the willingness to pay between the renewable technologies included in the choice experiment. The latent class model also illustrated that there is a sizeable minority (23.5%) who are opposed to renewable energy development. Older respondents and those less concerned about CO2 emissions are significantly more likely to form part of this group at the 5% level of significance. The study also included a unique addition by identifying households which purchased a house in the previous seven years. Interacting the actual transaction prices of these houses in a multinomial logit model suggested that households may be concerned about renewable energy developments devaluing their properties or the additional expense required to power larger houses. Due to the increasing difficulty of conducting choice experiments in the UK, a novel method of eliciting choice experiment responses from online advertising was tested and was found to be a cost-effective method of eliciting choice experiment responses. Overall, the research indicates that caution should be exercised when interpreting the results of a choice experiment which elicits responses using Internet advertising. It can be observed that the pseudo R2 of the Internet-based sample is lower than the mail-based sample and that the mean respondent to the Internet-based choice experiment is willing to pay significantly more for renewable electricity than the mean respondent to the mail-based choice experiment at the 5% level of significance. Furthermore, the mean willingness to pay estimate in the Internet-based choice experiment appears to be unrealistically high. Further research investigating the elasticity of survey responses to the prize fund on offer would be valuable in identifying the most cost-effective strategy to obtain responses and to generate a more representative sample.

The motivation for this study arose from the dual observation that there are very few estimates of the local costs of climate change in developing countries and that the few studies that do exist rarely take into account the non-market value of ecosystem services. Using a case study of a coastal lagoon ecosystem in Uruguay, I explore practical reasons for why this might be the case. Informational difficulties related to identifying local climate trends and the identification of ecosystem services as well as the relevance and feasibility of monetary valuation methodologies are discussed using specific examples. Three valuation methodologies are implemented to estimate the monetary values of climate change impacts on specific ecosystem services. The results suggest that climate change is affecting the economic value of the coastal lagoon ecosystem. Implications for local management and lessons learned from the case study are discussed.

Wetlands are recognized for the diverse range of ecosystem services they provide. However, most economic valuations focus on the biophysical ecosystem services and disregard the cultural ecosystem services. A better understanding of the cultural ecosystem services that suburban wetlands provide supplements wetland valuations and contributes to wetland preservation and sustainable suburban development. This study, which was conducted in Sherwood Park, Alberta, explores how suburban residents use, perceive, and value suburban wetlands and draws conclusions about the cultural ecosystem services provided by suburban wetlands. Suburban wetlands have implicit existence value; they are aesthetically pleasing; and they provide recreational, spiritual, and intellectual opportunities. Suburban wetlands are venues for relaxation, stress relief, and connecting with nature. Residents have strong positive feelings toward suburban wetlands, and a strong preference for incorporating natural wetland elements into suburban developments. Incorporating natural wetlands contributes to sustainable suburban development and produces economic, social, and ecological benefits.

Midmar is built on the Umgeni River, KwaZulu-Natal and is 1060m above sea level. The river starts as a small stream in Loteni and has a total catchment area of 906 square kilometres and an annual rainfall of 1016 mm. Midmar provides a multitude of benefits classified as either onsite use benefits or non-use benefits. This dissertation focuses on environmental economics and is concerned with assigning a monetary value to a given environmental good, namely, recreation at Midmar. This entails estimation of the demand curve for recreation at Midmar, and using this curve, establishing the consumer surplus attached to Midmar. The Individual Travel Cost method is used to investigate the nature of recreational demand at Midmar and essentially, measures the economic value of recreation use here. In addition, an examination as to whether consumers enjoy any consumer surplus associated with recreational demand is undertaken. The survey undertaken concludes that recreational visitors to Midmar enjoy a consumer surplus of approximately R71 per visit. Total consumer surplus for Midmar during 1999 was estimated to be R4.9 million. This suggests that the actual price paid by visitors to Midmar understates the true value attached to such a visit and hence, park management needs to be aware of this. Finally, this dissertation emphasizes the importance and potential use of research such as this which could assist and guide future planning and decision making in South Africa. / Thesis (M.Comm.)-University of KwaZulu-Natal, Pietermaritzburg, 2004.

The port of Durban is currently suffering under severe capacity constraints. This has negatively affected efficiency resulting in queuing and berthing delays. If Durban wishes to remain the premier hub status port of the region and Southern hemisphere, then it needs to adequately address the current supply constraints. Shipping vessel operators and owners will not tolerate these inefficiencies indefinitely and if the port does not seek to address the situation, it runs the very real risk of losing patronage in the medium to long term. The obvious response to the supply side constraint is to increase container handling capacity. This dissertation will analyse the expansion options available to the port in this regard. Beside simply increasing capacity, the port needs to increase draught depth at the berths since container vessels are continually migrating to larger sizes to benefit from economies of scale. A key challenge is the fact that the port serves other purposes beyond that of being a gateway for traded goods such as ecological functions and subsistence fishing. This is compounded by the significant environment degradation which the bay has suffered over the last century or so. The port, however, generates significant economic benefits for the city in terms of economic linkages and employment, and for its wider national and regional hinterland, by holding down the generalised cost of the transport of goods. By not expanding capacity, there are significant opportunity costs for Durban and for the port’s wider hinterland. The best way of analysing the benefits and costs of the various options is to conduct a public CBA analysis which monetises and discounts streams of benefits and costs to arrive at a NPV. Several expansion options are examined and include Bayhead, the old DIA site and Richards Bay. An NPV was calculated for each option where environmental externalities were included. The CBA yielded three options with positive NPV’s out of the seven examined. The Southern Access routes, 3CA and 3DA, were both rejected since the effective removal of port sites used presently for the handling and storage of petrochemicals was considered infeasible. One of the Northern Access routes, 1AB, was also rejected since the option yielded a negative NPV. Even though DIA1 had a positive NPV; it was rejected based on mutual exclusivity with option DIA2. Richards Bay was rejected since it had a penalty cost of R89 billion over Durban, due primarily to higher logistical costs. On balance the Bayhead option 1AA and airport option DIA2 were chosen as the projects of choice primarily on the basis of the CBA results. Both these options yielded significantly positive NPV’s and the port should seriously look into their construction as they would provide several years of spare capacity as well as being able to accommodate Post Panamax vessels. / Thesis (M.Com.)-University of KwaZulu-Natal, Westville, 2010.