The Social Costs of Environmental Goods Provision: A Cautionary Guide to the Revealed-Preference Approach
| Autor: | Cloé Garnache, Pierre Mérel |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Marginal cost
Economics and Econometrics Discrete choice Opportunity cost 010504 meteorology & atmospheric sciences Public economics media_common.quotation_subject Social cost 05 social sciences Management Monitoring Policy and Law Payment 01 natural sciences Revealed preference Microdata (HTML) 0502 economics and business Economics 050202 agricultural economics & policy Marginal abatement cost 0105 earth and related environmental sciences Nature and Landscape Conservation media_common |
| Zdroj: | Journal of the Association of Environmental and Resource Economists. 4:1025-1052 |
| ISSN: | 2333-5963 2333-5955 |
| DOI: | 10.1086/692915 |
| Popis: | Empirically estimated behavioral models have emerged as the preferred approach to revealing the social opportunity costs of pollution abatement in many areas of environmental economics. This paper identifies conceptual issues in the implementation of the revealed-preference approach to nonpoint-source pollution and provides methods to overcome them. We focus on the common second-best setting where emissions are not measurable at the source and pollution reduction is incentivized indirectly through payments tied to practice adoption. First, we show through simulation that in discrete choice models estimated on microdata, the use of predicted opportunity costs provides an erroneous estimate of underlying abatement costs. We then focus on two metrics commonly used to represent the marginal social costs of abatement actions, namely, average and marginal program expenditures incurred by the regulating agency. We show theoretically and empirically that these metrics generally fail to reveal underlying s... |
| Databáze: | OpenAIRE |
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