One of the problems with proposals for substantialinstitutional change in water systems is thatmodification and irreversibility make the processslow, cautious and costly to society. In this paper,we discuss the role that experimental economics canplay in evaluating proposed institutional changes...

Individuals are widely believed to overstate their economic valuation of a good by a factor of two or three. This paper reports the results of a meta-analysis of hypothetical bias in 28 stated preference valuation studies that report monetary willingness-to-pay and used the same mechanism for...

We provide a simplified test to determine if choice data from a two-commodity consumption set satisfies the Generalized Axiom of Revealed Preference (GARP), and thus the preference or utility maximization hypothesis. We construct an algorithm for this test and illustrate its application on...

Abstract Air pollution from motor vehicles, electricity-generating plants, industry, and other sources can harm human health, injure crops and forests, damage building materials, and impair visibility. Economists sometimes analyze the social cost of these impacts, in order to illuminate...

The effects of ozone air pollution on the agricultural sector are an important environmental challenge facing policy makers. Most studies of the economic impact of air pollution on agriculture have found that a 25% reduction in ambient ozone would provide benefits of at least $1-2 billion...

Over the past five years, analysts and policymakers have become increasingly interested in the “full social cost†of motor vehicle use. Not surprisingly, there is little agreement about how to estimate the social cost or why, with the result that estimates and interpretations can...

Various studies (e.g. Becker, 1962; Ariely et al., 2003) have noted anomalies concerning the relationship between observed demand and the preferences presumed to motivate it. We re-examine these findings using experimental choice data. After separating our subjects' choices into rational and...

In this Report, we seek to answer the question: “If the U.S. highway transportation sector did not use oil, how much would the U.S. Federal government reduce its military commitment in the Persian Gulf?†The analysis goes in four parts. First, we explain that the U.S. protects its...

Over the past five years, analysts and policy makers have become increasingly interested in the full social cost of motor-vehicle use. Researchers have performed social-cost analyses for a variety reasons, and have used them in a variety of ways, to support a wide range of policy positions. Some...