We carry out a repeated game of demand for typhoon insurance in China to study how the availability heuristic and gambler's fallacy affect that demand in both short term and long terms. We find that after people experience the first typhoon in the experiment, the availability heuristic dominates...

Private risk reduction will be socially efficient only when firms are liable for all the damage that they cause. We find that environmental insurance can achieve efficiency even when fines and management mandates do not. The evolution of the U.S. Environmental Protection Agency's and states'...

This paper examines whether Underground Storage Tank (UST) regulations had uneven impacts on petroleum retail outlets, and explores the reasons why some outlets are more likely to exit the market than others under UST regulations. The analyses suggest that both the economies of scale and the...

We revisit the Environmental Kuznets Curve (EKC) argument that an economy could pollute and develop at first and reduce pollution as income continues to grow. We propose a dynamic structural model to capture the interaction between economic growth, human capital accumulation, environmental...

In contrast to the Pollution Haven Hypothesis, the Trade-Up Hypothesis holds that international integration helps improve firms' environmental performance in developing countries. Using firm-level data from Shanghai, this paper examines how international linkages, in the form of foreign direct...

Several US states have passed renewable portfolio standard (RPS) policies in order to encourage investment in renewable energy technologies. Existing research on their effectiveness has either employed a cross-sectional approach or has ignored heterogeneity among RPS policies. In this paper, we...

This paper examines whether risk-based pricing promotes risk-reducing effort. Such mechanisms are common in private insurance markets, but are rarely incorporated in government assurance programs. We analyze accidental underground fuel tank leaks--a source of environmental damage to water...