Thesis (Ph. D.)--Oregon State University, 2010. / Printout. Includes bibliographical references (leaves 104-113). Also available on the World Wide Web.

We revisit the optimal investment and consumption model of Davis and Norman (1990) and Shreve and Soner (1994), following a shadow-price approach similar to that of Kallsen and Muhle-Karbe (2010). Making use of the completeness of the model without transaction costs, we reformulate and reduce the Hamilton-Jacobi-Bellman equation for this singular stochastic control problem to a non-standard free-boundary problem for a first-order ODE with an integral constraint. Having shown that the free boundary problem has a smooth solution, we use it to construct the solution of the original optimal investment/consumption problem in a self-contained manner and without any recourse to the dynamic programming principle. By analyzing the properties of the free boundary problem, we provide an explicit characterization of model parameters for which the value function is finite. Furthermore, we prove that the value function, as well as the slopes of the lines demarcating the no-trading region, can be expanded as a series of integer powers of [lambda superscript 1/3]. The coefficients of arbitrary order in this expansion can be computed. / text

This dissertation examines the performance of China's pulp and paper industry under environmental regulations, and reflects on the implementation of the regulations, and especially on market-based instruments. The dissertation includes two empirical chapters: one uses a frontier production function model to examine the impact of China's environmental policy on paper mills' environmental as well as efficiency performance; the other derives shadow prices for pollutants for the same group of mills, based on a distance function model, to examine the efficiency performance of current pollution control policy and the degree of regional variation in the policy enforcement. The basic conclusion from the first empirical chapter is that the economic instrument-pollution levy system-can be an effective tool in inducing polluting mills to abate their pollution, and there is no strong evidence that the instrument adversely affected the mills' efficiency performance. The reason that the pollution problem is not lessening over time can be largely attributed to allocative inefficiency and regional disparity in policy enforcement, as is demonstrated by the second empirical chapter. These results should point future policy in the direction of better enforcement and/or the trial of a tradable permit system. / Ph. D.

M.Comm / This dissertation comprises of four parts that attempt to explain the history and application of shadow pricing in South African water projects with reference to water resource development and water pricing reforms. Water is a precious resource and people simply cannot survive without fresh water. It becomes a vital function to then price water correctly and therefore revolutionise the way water is treated. The application of CBA has become increasingly important over recent years Governments often finance these projects, but there is a need for a consistent or standard framework to evaluate capital projects to minimise the risk and possible losses. As a result a manual and method to evaluate spending priorities was developed in the 1980’s in South Africa. CBA has found extensive applications in the field of water development. Important issues such as the opportunity cost of water and a method to calculate the economic value or the opportunity cost of water have been developed further in South Africa over the past few years. It emphasises that pricing water can be a complicated process affected by various forces, many of which are difficult to define and model. The History and Application of Shadow Pricing in South African Water Projects Page v This dissertation demonstrates that the strategies employed in each country are different variations of CBA, with the use of shadow pricing and are adapted to each countries varying circumstance. The political experiences in South Africa have placed strain on the countries scarce national resources. As a result there is a need for some kind of framework and method to evaluate spending and pricing of infrastructure and importantly the development of water pricing reforms and management thereof. The study concludes that there is limited literature that actually defines and explains how shadow prices are calculated in water resource management. Wrong policy or planning decisions can often be a result of price distortions. Therefore, countries are becoming more aware that external factors, such as social welfare and the environment need to be taken into consideration.

In project appraisal of infrastructure projects, cost benefit analysis has an important role. One of the central concerns is to adjust the distortions in markets to provide a better guide to a more effective allocation of scarce resources. The objectives of this thesis are : to establish the lack of a comprehensive estimation of the shadow wage rate (SWR) in most project appraisals in the Australian context; to develop a model for the estimation of the SWR for groups of occupations; to estimate the SWRs for the major groups of occupations in Australia; to forecast the number of employees required for Sydney's second airport project and to apply the estimated SWRs to the project, followed by estimation of the total social cost of the project. The latter estimation is done using a novel approach which, unlike many previous studies of transport infrastructure projects, estimates the SWR entirely from published statistical sources. Overall, the results are significant not only in the context of Sydney's second airport, but for other airports, the transportation sector, and in general for Australian project appraisal. The study proposes the need to change the traditional approach to the treatment of labour costs in project appraisal in Australia and provides a framework which can be useful to other researchers and analysts who wish to examine the pricing of labour in Australian project appraisal. / Doctor of Philosophy (PhD)

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Thesis (Ph.D.)--University of Western Sydney, Macarthur, Dept. of Economics and Finance, 1997.

Systematic conservation planning is an essential part of biodiversity preservation.

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This thesis employs a parametric input distance function that incorporates both desirable and undesirable outputs to provide a more complete representation of the production technology. Based on the Shephard (1970) theory of duality, we derive the shadow prices of undesirable outputs in the Czech energy sector on the data over the period 2002 - 2007. The medians of our shadow prices estimates are 8374, 1198, 2805, 6051 and 8549 € per ton of PM, SO2, NOx, CO and VOC, respectively. We decompose shadow prices estimates and test the hypotheses that the marginal abatement cost decline over time; that marginal abatement cost rice with the declining emission level; and that marginal abatement cost rice with declining emission rate. Key Words: shadow prices, distance function, undesirable outputs, marginal abatement cost JEL classification: C61, D24, Q53