The paper presents two simple models of dynamic consumer behavior, both taking into consideration the implications for welfare measurement when agents can delay transactions while obtaining additional information. One model studies the effect when a purchased good is non-perishable and can be...

A new turn in the research agenda of environmental valuation is under way. Rather than treating stated preference (SP) and revealed preference (RP) as competing valuation techniques, analysts have begun to view them as complementary, where the strengths of each approach can be used to provide...

In a static setting, willingness to pay for an environmental improvement is equal to compensating variation. However, in a dynamic setting characterized by uncertainty, irreversibility, and the potential for learning, willingness to pay may also contain an option value. In this paper, we...

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the...

The focal point of the revealed preference (RP) valuation literature, including recreation demand and random utility maximization (RUM) models, has been on eliciting the “use” value associated with environmental amenities; i.e., that portion of value associated with direct use of a resource....

The study evaluates the gains of avoiding data-dependent specification search on an estimation sample in an application to discrete choice models. We incorporate data splitting, the process by which the total available sample is randomly split in two or more sub-samples with the first...

The optimal pollution permit trading system is examined when the regulator, faced with incomplete information on firms’' abatement costs and delivery coefficients, seeks to minimize expected total abatement costs to meet an ex ante pollution target. Intuitively, we find that the optimal trading...

Due to payoff uncertainties combined with risk aversion and/or real options, farmers may demand a premium in order to adopt conservation tillage practices, over and above the compensation for the expected profit losses (if any). We propose a method of directly estimating the financial incentives...

To value water quality improvements in the Chesapeake Bay or elsewhere, it is necessary to choose an appropriate model of consumer behavior. A number of different travel cost based recreation demand models have beenemployed to value changes in water quality or beach access. Among the possible...

This paper examines equilibrium properties of local jurisdictions implied by the Tiebout-style model. A set of equilibrium conditions are derived from a general equilibrium model of local jurisdictions. The conditions are parameterized and empirically estimated in a two-stage procedure. The...