Template-Type: ReDIF-Paper 1.0 Number: 2005.1 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.1 Title: Accounting for Extreme Events in the Economic Assessment of Climate Change Author-Name: Stéphane Hallegatte Author-X-Name-First: Stéphane Author-X-Name-Last: Hallegatte Author-WorkPlace-Name: CIRED Abstract: Extreme events are one of the main channels through which climate and socio- economic systems interact. It is likely that climate change will modify their probability distributions and their consequences. The long-term growth models used in climate change assessments, however, cannot capture the effects of short-term shocks; they thus model extreme events in a very crude manner. To assess the importance of this limitation, a non-equilibrium dynamic model (NEDyM) is used to model the macroeconomic consequences of extreme events. Its conclusions are the following: (i) Dynamic processes multiply the extreme event direct costs by a factor 20; half of this increase comes from short-term processes; (ii) A possible modication of the extreme event distribution due to climate change can be responsible for significant GDP losses; (iii) The production losses caused by extreme events depend, with strong non-linearity, both on the changes in the extreme distribution and on the ability to fund the rehabilitation after each disaster. These conclusions illustrate that the economic assessment of climate change does not only depend on beliefs on climate change but also on beliefs on the economy. Moreover, they suggest that averaging short-term processes like extreme events over the five- or ten-year time step of a classical long-term growth model can lead to inaccurately low assessments of the climate change damages. Keywords: Climate change, Extreme events, Economic impacts Classification-JEL: E10, E22, O16, O40 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.2 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.2 Title: Application of Technological Control Measures on Vehicle Pollution: A Cost-Benefit Analysis in China Author-Name: Paulo Augusto Nunes Author-X-Name-First: Paulo Augusto Author-X-Name-Last: Nunes Author-WorkPlace-Name: University Ca' Foscari of Venice Author-Name: Qiang Wu Author-X-Name-First: Qiang Author-X-Name-Last: Wu Author-WorkPlace-Name: Bologna Center, SAIS and Johns Hopkins University Abstract: For the past two decades, China has experienced strong, continuous economic growth. At the same time, the number of motor vehicles in China has rapidly increased. As a direct result of such a phenomenon, China has been registering significant increases in air pollution. In spite of recent advances in air pollution control, it remains a serious problem for China’s major cities, and constitutes an important issue in the agenda of its policy makers. The object of this paper is to explore the use of cost-benefit analysis (CBA) to evaluate and rank alternative policy scenarios regarding the control of air pollution emitted by motor vehicles. The empirical analysis carried out relates specifically to the Chinese context, over a twenty year period, from 2001 to 2020, and focuses on emission changes of the following three principal pollutants: CO, HC and NOx. Keywords: Vehicle, Pollution, CO, HC, NOx, Scenario, Standard, Cost, Benefit, China Classification-JEL: O33, O53 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.3 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.3 Title: A Global Database of Domestic and International Tourist Numbers at National and Subnational Level Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Hamburg University Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Catholic University of Leuven Author-Name: Jacqueline M. Hamilton Author-X-Name-First: Jacqueline M. Author-X-Name-Last: Hamilton Author-WorkPlace-Name: Hamburg University and Centre for Marine and Atmospheric Science Author-Name: Yuan Zhou Author-X-Name-First: Yuan Author-X-Name-Last: Zhou Author-WorkPlace-Name: Hamburg University and Centre for Marine and Atmospheric Science Abstract: We present a new, global data base on tourist destinations. The data base differs from other data bases in that it includes both domestic and international tourists; and it contains data, for the most important destinations, data at national level as well as at lower administrative levels. Missing observations are interpolated using statistical models. The data are freely accessible on the internet. Keywords: Tourism, Data Classification-JEL: L83 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.4 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.4 Title: The Impact of Climate on Holiday Destination Choice Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Hamburg University Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Catholic University of Leuven Author-Name: Jacqueline M. Hamilton Author-X-Name-First: Jacqueline M. Author-X-Name-Last: Hamilton Author-WorkPlace-Name: Hamburg University and Centre for Marine and Atmospheric Science Abstract: The holiday destination choice is analysed for tourists from 45 countries, representing all continents and all climates. Tourists are deterred by distance, political instability and poverty, and attracted to coasts. Tourists prefer countries with a sunny yet mild climate, shun climes that are too hot or too cold. A country’s tourists’ aversion for poverty and distance can be predicted by that country’s average per capita income. The preferred holiday climate is the same for all tourists, independent of the home climate. However, tourists from hotter climates have more pronounced preferences. Keywords: Climate change, Impacts, Adaptation, Acclimatisation, Domestic tourism, International tourism Classification-JEL: L83, Q25 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.5 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.5 Title: Is Inequality Harmful for the Environment in a Growing Economy? Author-Name: Hubert Kempf Author-X-Name-First: Hubert Author-X-Name-Last: Kempf Author-WorkPlace-Name: Université Paris-1 Panthéon Sorbonne Author-Name: Stéphane Rossignol Author-X-Name-First: Stéphane Author-X-Name-Last: Rossignol Author-WorkPlace-Name: Université de Versailles, and EUREQua Université Paris-1 Panthéon-Sorbonne Abstract: In this paper we investigate the relationship between inequality and the environment in a growing economy from a political economy perspective. We consider an endogenous growth economy, where growth generates pollution and a deterioration of the environment. Public expenditures may either be devoted to supporting growth or abating pollution. The decision over the public programs is done in a direct democracy, with simple majority rule. We prove that the median voter is decisive and show that inequality is harmful for the environment: the poorer the median voter relative to the average individual, the less she will tax and devote resources to the environment, preferring to support growth. Keywords: Inequality, Environment, Pollution abatement policy, Growth, Political economy Classification-JEL: D31, O11, Q50, Q58 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.6 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.6 Title: The Dynamics of Carbon and Energy Intensity in a Model of Endogenous Technical Change Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: Università di Venezia and Fondazione Eni Enrico Mattei Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Università di Milano and Fondazione Eni Enrico Mattei Abstract: In recent years, a large number of papers have explored different attempts to endogenise technical change in climate models. The obvious reason is that technical change is widely considered the main route to achieving a significant reduction in global GHG emissions. This recent literature has emphasized that four factors – two inputs and two outputs – should play a major role when modelling technical change in climate models. The two inputs are R&D investments and Learning by Doing, the two outputs are energy-saving and fuel switching. Indeed, R&D investments and Learning by Doing are the main drivers of a climate-friendly technical change that eventually affect both energy intensity and fuel-mix. In this paper, we present and discuss an extension of the FEEM-RICE model in which these four factors are explicitly accounted for. In our new specification of endogenous technical change, an index of technical progress depends on both Learning by Researching and Learning by Doing. This index enters the equations defining energy intensity (i.e. the amount of carbon energy required to produce one unit of output) and carbon intensity (i.e. the level of carbonization of primarily used fuels). This new specification is embodied in the RICE 99 integrated assessment climate model and then used to generate a business as usual scenario and to analyze the relationship between climate policy and technical change. Sensitivity analysis is performed on different key parameters of the energy module in order to obtain crucial insights into the relative importance of the main channels through which technological changes affects the impact of human activities on climate. In addition, the effectiveness of different possible ways of combining Learning by Researching and Learning by Doing is also investigated. Keywords: Climate Policy, Environmental Modelling, Integrated Assessment, Technical Change Classification-JEL: H0, H2, H3 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.7 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.7 Title: The Allure of Technology: How France and California Promoted Electric Vehicles to Reduce Urban Air Pollution Author-Name: David Calef Author-X-Name-First: David Author-X-Name-Last: Calef Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Robert Goble Author-X-Name-First: Robert Author-X-Name-Last: Goble Author-WorkPlace-Name: George Perkins Marsh Institute, Clark University Abstract: All advanced industrialized societies face the problem of air pollution produced by motor vehicles. In spite of striking improvements in internal combustion engine technology, air pollution in most urban areas is still measured at levels determined to be harmful to human health. Throughout the 1990s and beyond, California and France both chose to improve air quality by means of technological innovation, adopting legislation that promoted clean vehicles, prominently among them, electric vehicles (EVs). In California, policymakers chose a technology-forcing approach, setting ambitious goals (e.g., zero emission vehicles), establishing strict deadlines and issuing penalties for non-compliance. The policy process in California called for substantial participation from the public, the media, the academic community and the interest groups affected by the regulation. The automobile and oil industries bitterly contested the regulation, in public and in the courts. In contrast, in France the policy process was non-adversarial, with minimal public participation and negligible debate in academic circles. We argue that California's stringent regulation spurred the development of innovative hybrid and fuel cell vehicles more effectively than the French approach. However, in spite of the differences, both California and France have been unable to put a substantial number of EVs on the road. Our comparison offers some broad lessons about how policy developments within a culture influence both the development of technology and the impact of humans on the environment. Keywords: Environmental policy, Electric vehicles, Air pollution, Technology policy, Sustainable transport Classification-JEL: O33, O57, Q53, K32, L5 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.8 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.8 Title: An Empirical Contribution to the Debate on Corruption,Democracy and Environmental Policy Author-Name: Lorenzo Pellegrini Author-X-Name-First: Lorenzo Author-X-Name-Last: Pellegrini Author-WorkPlace-Name: Vrije Universiteit Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: Institute for Environmental Studies (IVM-FALW), Vrije Universiteit Abstract: Both theoretical and empirical studies have shown that democracy and corruption have substantial influence on environmental policy. In this paper, we empirically analyse whether both democracy and corruption are equally important determinants. When these variables are jointly included as explanatory variables, we find that corruption stands out as an important determinant of environmental policies, while democracy has a very limited impact. Further on, we discuss our results in the context of the Environmental Kuznets Curve literature. We argue that institutional disarray that plagues developing countries will make it problematic for them to have increasing environmental policy stringency combined with increasing incomes. Finally, and more optimistically, when we consider our results in the context of institutions and growth, we conclude that there is a possibility of reaching a double dividend. Reductions in corruption would induce both higher growth rates and stricter environmental policies. Thus, institutional improvement is an extremely valuable step in achieving sustainable development. Keywords: Corruption, Democracy, Development, Environmental policy, Institutions Classification-JEL: H40, D73, Q56, Q58 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.9 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.9 Title: Environmental Resources Depletion and Interplay Between Negative and Positive Externalities in a Growth Model Author-Name: Angelo Antoci Author-X-Name-First: Angelo Author-X-Name-Last: Antoci Author-WorkPlace-Name: DEIR, University of Sassari Abstract: We analyse growth dynamics in an economy where the well-being of economic agents depends on three goods: leisure, a free access environmental good and a private good which can be produced by each agent through his own labour input. The private good can be consumed as a substitute for the environmental resource. The production process of the private good by each agent generates negative externalities on the other agents, by depleting the free access natural resource; but it also produces positive externalities by increasing the productivity of labour via a learning-by-doing mechanism of accumulation of knowledge [which is a pure public good]. In this context, we show that attracting steady states may exist which are Pareto-dominated by others where aggregate private consumption and labour productivity are lower. However, negative externalities can also be an engine of desirable growth: the deterioration of the environmental good can play the role of a coordination device leading economic agents to a wider exploitation of positive externalities. Keywords: Self-protection choices, Consumption patterns, Negative externalities, Undesirable economic growth, Adaptive dynamics Classification-JEL: D62, O11, O13, O40, Q20 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.10 Title: Cost-Reducing Alliances and Local Spillovers Author-Name: Frédéric Deroian Author-X-Name-First: Frédéric Author-X-Name-Last: Deroian Author-WorkPlace-Name: F.O.R.U.M Université Paris X Abstract: Firms raise cost-reducing alliances before competing with each other, but cannot fully internalize the shared knowledge. When spillovers are local and transit through the network of alliances, stable architectures with a moderate level of asymmetry are identified. Keywords: Oligopoly, Cost-Reducing alliances, Local spillovers, Network stability Classification-JEL: C70, L13, L20 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.11 Title: The GMO Dispute before the WTO: Legal Implications for the Trade and Environment Debate Author-Name: Francesco Sindico Author-X-Name-First: Francesco Author-X-Name-Last: Sindico Author-WorkPlace-Name: Universitat Jaume I Abstract: USA, Canada and Argentina have challenged before the World Trade Organisation the European Communities’ (EC) denial of Genetically Modified (GM) product imports, which took place from 1998 to 2004 . Against this background, the goal of this paper is twofold. Firstly, we will determine which WTO provisions would have been violated by the EC. Secondly, we will highlight the dispute’s most important legal issues in order to see to what extent the dispute might influence the ongoing trade and environment debate. The paper concludes that the role of the precautionary principle in the application of the EC legislation is one of the dispute’s main issues. Furthermore, the Panel findings on the legal nature of the precautionary principle, and on its relevance for the interpretation of WTO provisions, will finally determine the influence of the GMO dispute on the trade and environment debate. Keywords: GMO, WTO, Trade, Environment Classification-JEL: Q00, F10 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.12 Title: Estimating the New Keynesian Phillips Curve for Italian Manufacturing Sectors Author-Name: Carla Massidda Author-X-Name-First: Carla Author-X-Name-Last: Massidda Author-WorkPlace-Name: University of Cagliari Abstract: The purpose of this paper is to test the general validity of the NKPC previsions for the Italian manufacturing industries. In particular we are interested in estimating the extent to which the degree of nominal inertia and the fraction of backward-looking price-setters differ from industry to industry. We attempt to address this issue by testing three different model specifications: a pure forward-looking model versus a hybrid model where an income labour share marginal cost measure is considered, and a modified hybrid model specification where marginal costs are corrected to include intermediate inputs. Our results show that the backward-looking component is statistically significant and quantitatively large for all industries. Moreover, this estimate does not depend on the model’s specification. Conversely, the parameter measuring the extent of price rigidity is sensitive to the definition of firms’ cost. Interpreting the overall results, we conclude that price-setting behaviour is not totally homogeneous among Italian firms. Keywords: Phillips curve, Inflation, Unit labour cost Classification-JEL: E3 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.13 Title: Start-up Entry Strategies: Employer vs. Nonemployer firms Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Brescia Author-Name: Gianpaolo Rossini Author-X-Name-First: Gianpaolo Author-X-Name-Last: Rossini Author-WorkPlace-Name: University of Bologna Abstract: From 1997 to 2001 we observe in the Usa a faster growth in the number of Nonemployer firms (NF) vis à vis Employer firms (EF). The diverse speed of net entry may be due to particular internal organisation of the two types of firms and the effect that this has on the reactions to market uncertainty. However, the set of internal organizations of firms is larger than that made up simply by EFs and NFs, in particular among newborn firms, since we observe corporate start-ups with employees, firms owned and managed by their founders who are simultaneously the employees and, finally, non corporate enterprises. The second class of firms mostly belongs to the category of NFs, according to US nomenclature, while non corporate firms may belong to either category. Our curiosity is attracted by different entry patterns of NFs and EFs and our aim is to interpret them. According to recent literature, firms carry out an irreversible investment, such as entry, only if market prices are strictly larger than average total costs (Marshallian point). However, the trigger price that makes firms become active is affected by institutional rules, the existence of profit sharing, efficiency wages, exit options - i.e. partial reversibility -, financial constraints. Then, the internal organization of a newborn firm may make the difference. In a continuous time stochastic environment, where firms bear a sunk cost, we model entry as a growth option. On the trace of distinct objective functions we show that NFs and EFs have specific entry patterns in terms of output price and/or size. Why? Simply because they react in diverse fashions to market price volatility. In this sense we are able to show that, in most cases, the NF is locally less risky. This makes the NF better suited to enter under conditions of higher volatility. This exactly corresponds to what happened during the years between 1997-2001. Keywords: Entry strategies, Uncertainty, Nonemployer, Employer firms Classification-JEL: L21, L3, J54, G13 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.14 Title: Ownership Concentration, Monitoring and Optimal Board Structure Author-Name: Clara Graziano Author-X-Name-First: Clara Author-X-Name-Last: Graziano Author-WorkPlace-Name: University of Udine Author-Name: Annalisa Luporini Author-X-Name-First: Annalisa Author-X-Name-Last: Luporini Author-WorkPlace-Name: University of Florence Abstract: The paper analyzes the optimal structure of board of directors in a firm with ownership concentrated in the hands of a large shareholder who sits on the board. We focus our attention on the choice between one-tier board who performs all tasks and two-tier board where the management board is in charge of project selection and the supervisory board is in charge of monitoring. We consider the case in which the large shareholder sits on (and controls) the supervisory board but not the management board. We show that a two-tier structure can limit the interference of large shareholders and can restore manager’s incentive to exert effort to become informed on new investment projects without reducing the large, shareholder’s incentive to monitor the manager. This results in higher expected profits in a two-tier board than in one-tier board and the difference in profits can be sufficiently high to induce large shareholders to prefer a two-tier board despite the fact that in this case the manager selects his preferred projects rather than the project preferred by large shareholders. The paper has interesting policy implications since it suggests that two-tier boards can be a valuable option in Continental Europe where ownership structure is concentrated. It also offers support to some recent corporate governance reforms, like the so-called Vietti reform in Italy, that have introduced the possibility to choose between one-tier and two-tier structure of boards for listed firms. Keywords: Board of directors, Dual board, Corporate governance, Monitoring, Project Choice Classification-JEL: G34, L22 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.15 Title: Use of Ecolabels in Promoting Exports from Developing Countries to Developed Countries: Lessons from the Indian LeatherFootwear Industry Author-Name: Parashar Kulkarni Author-X-Name-First: Parashar Author-X-Name-Last: Kulkarni Author-WorkPlace-Name: CUTS Centre for International Trade, Economics & Environment Abstract: This paper tries to understand whether importers in the North are able to push exporters in the South towards sustainable production, with the help of a case study of the Indian leather industry. After providing a short description of the global leather footwear industry, the first section provides insights into the competitive advantages of different countries, characteristics of developing country exporters and the difference between large and small European buyers of Indian leather footwear. The subsequent section provides an insight into the different chains of influence that exist in trying to make international trade more sustainable with the help of a broad understanding of the means, their effectiveness, their constraints and a few examples of such chains of influence. Section four studies whether ecolabels are in a position to be suitable indicators of sustainability. Further it delves into understanding the perspectives of consumers, producers and regulators on whether ecolabels are useful in promoting sustainable exports. The explanation of how ecolabels conflict with brand dynamics is quite interesting. The policy measures provide clear options for targeting sustainable production. Suggestions include use of eco-elasticity indicator, toolbox approach to environment policy, introducing comprehensive sustainability labels, maintaining a level of mandatory legislations as well as a constructive effort to increase transparency in supply chains. The annexure include the research methodology adopted for the paper, the reason for choosing Europe as destination for the research, a brief overview about types of ecolabels and a small description of integrated product policies. Keywords: Ecolabels, Export promotion, Leather footwear, Market access Classification-JEL: F18 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.16 Title: How to Measure the Unobservable: A Panel Technique for the Analysis of TFP Convergence Author-Name: Adriana Di Liberto Author-X-Name-First: Adriana Author-X-Name-Last: Di Liberto Author-WorkPlace-Name: Universita' di Cagliari Author-Name: Roberto Mura Author-X-Name-First: Roberto Author-X-Name-Last: Mura Author-WorkPlace-Name: University of York, Università di Cagliari and CRENoS Author-Name: Francesco Pigliaru Author-X-Name-First: Francesco Author-X-Name-Last: Pigliaru Author-WorkPlace-Name: Università di Cagliari and CRENoS Abstract: This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP convergence and the traditional neoclassical-type of convergence. We analyse a sample of Italian regions between 1963 and 1993 and find strong evidence that both mechanisms were at work during the process of aggregate regional convergence observed in Italy up to the mid-seventies. Finally, we find that our TFP estimates are highly positively correlated with standard human capital measures, where the latter is not statistically significant in growth regressions. This evidence confirms one of the hypotheses of the Nelson and Phelps approach, namely that human capital is the main determinant of technological catch-up. Our results are robust to the use of different estimation procedures such as simple LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond. Keywords: TFP, Panel data, Regional convergence Classification-JEL: O47, O33, O18, C23 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.17 Title: Asymmetric Labor Markets, Southern Wages, and the Location of Firms Author-Name: Alireza Naghavi Author-X-Name-First: Alireza Author-X-Name-Last: Naghavi Author-WorkPlace-Name: University College Dublin and CERAS Abstract: This paper studies the behavior of firms towards weak labor rights in developing countries (South). A less than perfectly elastic labor supply in the South gives firms oligopsonistic power tempting them to strategically reduce output to cut wages. In an open economy, competitors operating in perfectly competitive labor markets meanwhile enjoy less aggressive competitors and raise output. Finally, competition effect reduces the ex-post output of a relocating firm. These effects reduce relative profitability of the South casting doubts on traditional beliefs that multinationals are attracted to regions with lower wages. Adopting a minimum wage unambiguously enhances Southern competitiveness and welfare. Keywords: Labor standards, Labor market imperfection, Oligopsony, Location of firms, Minimum wages, Strategic behavior, Multinationals, Southern welfare Classification-JEL: J80, F23, J42, F12, R38, L13 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.18 Title: Strategic Intellectual Property Rights Policy and North-South Technology Transfer Author-Name: Alireza Naghavi Author-X-Name-First: Alireza Author-X-Name-Last: Naghavi Author-WorkPlace-Name: University College Dublin and CERAS Abstract: This paper analyzes welfare implications of protecting intellectual property rights (IPR) in the framework of TRIPS for developing countries (South) through its impact on innovation, market structure and technology transfer. In a North-South trade environment, the South sets its IPR policy strategically to manipulate multinationals’ decisions on innovation and location. Firms can protect their technology by exporting or risk spillovers by undertaking FDI to avoid tariffs. A stringent IPR regime is always optimal for the South as it triggers technology transfer by inducing FDI in less R&D-intensive industries and stimulates innovation by pushing multinationals to deter entry in high-technology sectors. Keywords: Intellectual property rights, Technology transfer, Multinational firms, Foreign direct investment, North-South trade Classification-JEL: O34, F23, F13, L13, O32, L11, O38 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.19 Title: Technology Transfer Through Trade Author-Name: Mombert Hoppe Author-X-Name-First: Mombert Author-X-Name-Last: Hoppe Author-WorkPlace-Name: DG Development, European Commission Abstract: This paper examines the role that trade plays in economic development through the channel of technology transfer, approximated by total factor productivity. Three strains of factors influence the process of technology transfer; direct effort that is taken to transfer technologies, the capacity to adopt technologies, and differences in the underlying conditions between donor- and receiving countries. In this context, trade in (capital) goods allows technology import and improved input decisions. Second, trade opens export markets, allowing learning-by-doing. Third and most importantly, trade increases the set of accessible technologies, increasing the scope for imitation. The theoretical insights are compared to the empirical literature that deals with trade and technology transfer. Not surprisingly, it turns out that openness and human capital have a positive influence on the transfer of technology. Yet methodological problems with the data weaken the practical significance of the results, especially as the precise and fundamental mechanism of spillovers and the factors that condition the degree of technology transfer are not profoundly illuminated. These underlying processes have to be better understood in order to be able to give valuable policy recommendations that will go beyond the general advice of increasing openness and human capital formation. Keywords: Technology transfer, Trade, Economic growth, Total factor productivity Classification-JEL: F10, F43, O40 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.20 Title: Platform Competition with Endogenous Multihoming Author-Name: Roberto Roson Author-X-Name-First: Roberto Author-X-Name-Last: Roson Author-WorkPlace-Name: Università Ca’ Foscari di Venezia Abstract: A model of two-sided market (for credit cards) is introduced and discussed. In this model, agents can join none, one, or more than one platform (multihoming), depending on access prices and the choices made by agents on the opposite market side. Although emerging multihoming patterns are, clearly, one aspect of equilibrium in a two-sided market, this issue has not yet been thoroughly addressed in the literature. This paper provides a general theoretical framework, in which homing partitions are conceived as one aspect of market equilibrium, rather than being set ex-ante, through ad-hoc assumptions. The emergence of a specific equilibrium partition is a consequence of: (1) the structure of costs and benefits, (2) the degree and type of heterogeneity among agents, (3) the intensity of platform competition. Keywords: Two-sided markets, Network externalities, Standards, Platforms, Multihoming Classification-JEL: D85, L10, L15, L89 Creation-Date: 200501 Template-Type: ReDIF-Paper 1.0 Number: 2005.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.21 Title: Regional and Sub-Global Climate Blocs.A Game-Theoretic Perspective on Bottom-up Climate Regimes Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, Fondazione Eni Enrico Mattei, CEPR and CEPS Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: No international regime on climate change is going to be fully effective in controlling GHG emissions without the involvement of countries such as China, India, the United States, Australia, and possibly other developing countries. This highlights an unambiguous weakness of the Kyoto Protocol, where the aforementioned countries either have no binding emission targets or have decided not to comply with their targets. Therefore, when discussing possible post-Kyoto scenarios, it is crucial to prioritise participation incentives for all countries, especially those without explicit or with insufficient abatement targets. This paper offers a bottom-up game-theoretic perspective on participation incentives. Rather than focusing on issue linkage, transfers or burden sharing as tools to enhance the incentives to participate in a climate agreement, this paper aims at exploring whether a different policy approach could lead more countries to adopt effective climate control policies. This policy approach is explicitly bottom-up, namely it gives each country the freedom to sign agreements and deals, bilaterally or multilaterally, with other countries, without being constrained by any global protocol or convention. This study provides a game-theoretic assessment of this policy approach and then evaluates empirically the possible endogenous emergence of single or multiple climate coalitions. Welfare and technological consequences of different multiple bloc climate regimes will be assessed and their overall environmental effectiveness will be discussed. Keywords: Agreements, Climate, Incentives, Negotiations, Policy Classification-JEL: C72, H23, Q25, Q28 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.22 Title: An Integrated Multi-Criteria System to Assess Sustainable Energy Options: An Application of the Promethee Method Author-Name: Fausto Cavallaro Author-X-Name-First: Fausto Author-X-Name-Last: Cavallaro Author-WorkPlace-Name: University of Molise Author-Name: University of Molise Abstract: The planning and appraisal of sustainable energy projects involve rather complex tasks. This is due to the fact that the decision making process is the closing link in the process of analysing and handling different types of information: environmental, technical economic and social. Such information can play a strategic role in steering the decision maker towards one choice instead of another. Some of these variables (technical and economic) can be handled fairly easily by numerical models whilst others, particularly ones relating to environmental impacts, may only be adjudicated qualitatively (subjective or not). In many cases therefore, traditional evaluation methods such as cost-benefit analysis and the main economic and financial indicators (NPV, ROI, IRR etc.) are unable to deal with all the components involved in an environmentally valid energy project. Multi-criteria methods provide a flexible tool that is able to handle and bring together a wide range of variables appraised in different ways and thus offer valid assistance to the decision maker in mapping out the problem. This paper sets out the application of a multi-criteria method (PROMETHEE developed by J.P. Brans et al. 1986) to a real life case that is in tune with the objectives of sustainable development. Keywords: Renewable energy, Multicriteria, Sustainable devolopment Classification-JEL: Q42, Q48, C63 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.23 Title: Uniqueness of Coalitional Equilibria Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: University of Hagen Author-Name: Pierre v. Mouche Author-X-Name-First: Pierre Author-X-Name-Last: Mouche Author-WorkPlace-Name: University of Wageningen Author-Name: Bianca Rundshagen Author-X-Name-First: Bianca Author-X-Name-Last: Rundshagen Author-WorkPlace-Name: University of Hagen Abstract: We provide an existence and a uniqueness result for coalitional equilibria of a game in strategic form. Both results are illustrated for a public good game and a homogeneous Cournot-oligopoly game. Keywords: Existence and uniqueness of coalitional equilibrium, Game in strategic form Classification-JEL: C71 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.24 Title: Decomposition of CO2 Emissions over 1980–2003 in Turkey Author-Name: Wietze LISE Author-X-Name-First: Wietze Author-X-Name-Last: LISE Author-WorkPlace-Name: Vrije Universiteit Abstract: There is a multi-dimensional need for studying the energy situation in Turkey and to ob-tain insight into the development of CO2 emissions. On the one hand, recent projections of the OECD show that Turkey has a yearly GDP growth potential of over 7%. On the other hand, recent projections of UNDP and World Bank indicate that the level of CO2 emission is going to rise six-fold by 2025 with respect to the level of emissions in 1990. It is a great challenge to both meet the growth target and keep the CO2 under control. Thereupon, this paper tries to unfold factors that explain CO2 emissions by undertaking a complete decomposition analysis for Turkey over the period 1980–2003. The analysis shows, as is common to relatively fast growing economies, that the biggest contributor to the rise in CO2 emissions is the expansion of the economy (scale effect). The carbon intensity and the change in composition of the economy, which nearly move in tandem, also contribute to the rise in CO2 emissions, albeit at a slower rate. The energy intensity of the economy, which is decreasing, is responsible for a modest reduction in CO2 emissions. Hence, in congruence with the scale effect, we do not find a decoupling of carbon emissions and economic growth in Turkey over the period 1980–2003. Keywords: Decomposition analysis, Turkey, Energy, CO2 emissions, Economic growth Classification-JEL: Q4, Q54 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.25 Title: The Core of Directed Network Problems with Quotas Author-Name: Somdeb Lahiri Author-X-Name-First: Somdeb Author-X-Name-Last: Lahiri Author-WorkPlace-Name: University of the Witwatersrand at Johannesburg Abstract: This paper proves the existence of non-empty cores for directed network problems with quotas and for those combinatorial allocation problems which permit only exclusive allocations. Keywords: Network problems, Quotas Classification-JEL: C71 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.26 Title: Protection Motivation Theory and Contingent Valuation: Perceived Realism, Threat and WTP Estimates for Biodiversity Protection Author-Name: Riccardo Scarpa Author-X-Name-First: Riccardo Author-X-Name-Last: Scarpa Author-WorkPlace-Name: University of York Author-Name: Susanne Menzel Author-X-Name-First: Susanne Author-X-Name-Last: Menzel Author-WorkPlace-Name: University of Goettingen and University of York Abstract: We report on a discrete-choice CV study conducted in Germany to value the WTP for biodiversity protection in less developed countries. To systematically investigate survey realism and subjective threat assessment from the loss of biodiversity described in the scenario the study includes questions to uncover the constructs of Protection Motivation Theory, which is introduced to the CV literature. The patterns of responses to such questions are analysed using an Expectation-Maximization algorithm to derive class membership probabilities. These are found to match the predictions of Protection Motivation Theory and systematically improve the logistic analysis of the WTP responses. Keywords: Biodiversity valuation, Protection motivation theory, Latent class analysis, Expectation-Maximization algorithm, Contingent valuation Classification-JEL: Q2, D6,C42, C25 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.27 Title: The Determinants of Residential Water Demand Empirical Evidence for a Panel of Italian Municipalities Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara Author-Name: Anna Montini Author-X-Name-First: Anna Author-X-Name-Last: Montini Author-WorkPlace-Name: University of Bologna and CERIS/DSE-CNR Abstract: We present empirical evidence on the determinants of residential water demand for one Italian region, Emilia-Romagna, by using municipal panel data. The estimated water demand price elasticity is negative, showing values between -0.99 and -1.33, never significantly different from one, considering different specifications without and with additional socio-economic factors. Income results associated to a positive elasticity, though lower than one. The role of other socio-economic territory-specific determinants is less relevant, with the exception of altitude. The relative high value of price elasticity is deemed consistent with the higher level of Regional water prices compared to the national average. The applied analysis is an important starting point for the Italian environment, which lacks reliable estimates on elasticities concerning microeconomic water demand studies. The estimation of price elasticity and the investigation on the determinants of water demand are necessary steps for both private and private-public management of water resources within the new framework originating from the implementation of the 96/1994 National water bill. Keywords: Residential water demand, Price elasticity, Income elasticity, Water pricing Classification-JEL: C23, D12, Q25 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.28 Title: Precautionary Effect and Variations of the Value of Information Author-Name: Laurent Gilotte Author-X-Name-First: Laurent Author-X-Name-Last: Gilotte Author-WorkPlace-Name: CIRED Author-Name: Michel de Lara Author-X-Name-First: Michel Author-X-Name-Last: de Lara Author-WorkPlace-Name: CERMICS Abstract: For a sequential, two-period decision problem with uncertainty and under broad conditions (non-finite sample set, endogenous risk, active learning and stochastic dynamics), a general sufficient condition is provided to compare the optimal initial decisions with or without information arrival in the second period. More generally the condition enables the comparison of optimal decisions related to different information structures. It also ties together and clarifies many conditions for the so-called irreversibility effect that are scattered in the environmental economics literature. A numerical illustration with an integrated assessment model of climate-change economics is provided. Keywords: Value of Information, Uncertainty, Irreversibility effect, Climate change Classification-JEL: D62, D63, H23, Q29 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.29 Title: Exportation of Timber in Ghana: The Menace of Illegal Logging Operations Author-Name: Paul Sarfo-Mensah Author-X-Name-First: Paul Author-X-Name-Last: Sarfo-Mensah Author-WorkPlace-Name: Kwame Nkrumah University of Science and Technology Abstract: This paper presents an empirical analysis of the linkage between external timber trade in Ghana and the increased incidence of illegal chainsaw operations which do not only threaten the country’s forests and other natural resources but also the erosion of the basis for sustainable agriculture which is the main-stay of the country’s economy. It uses ethnographic data from case studies of a recent research in selected forest reserves fringe communities in High Forest Zone of the country to explain the frustrations of local people with government policies that favour export to the neglect of local demand for timber and wood products. Although government pronouncements suggest that it is gaining an upper hand in the battle against illegal logging operations, evidence on the ground suggests that the greater part of the lumber on the local markets is supplied through illegal means predominated by itinerant chainsaw operators and their urban financiers . The paper concludes that the country’s forest and tree resources face massive degradation and overexploitation if the government does not take a bold decision on illegal logging, especially the activities of chainsaw operators. An option, though unpalatable and politically sensitive, may be the mainstreaming of chainsaw operations through the re-introduction of limited permits to registered local groups of timber traders and their chainsaw operators to supply the domestic market. This should be under a system which enjoins such groups to be collectively responsible for the activities of their members. And, the government should also strengthen the Forestry Services Division (FSD) to design and operationalize an enhanced monitoring and surveillance system of logging activities. Keywords: Economic recovery program (ERP), Timber exportation, Illegal chainsaw operation, Timber traders, High forest zone, Forestry services division (FSD) Classification-JEL: O, O5 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.30 Title: The Effect of Climate Change and Extreme Weather Events on Tourism Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Alessandra Goria Author-X-Name-First: Alessandra Author-X-Name-Last: Goria Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Jacqueline Hamilton Author-X-Name-First: Jacqueline Author-X-Name-Last: Hamilton Author-WorkPlace-Name: Hamburg University and Centre for Marine and Atmospheric Science Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Hamburg University, Vrije Universiteit and Engineering and Public Policy, Carnegie Mellon University Abstract: Tourism is an industry of primary importance for the world economy. For some countries, tourism is the first source of income and foreign currency, and many local economies heavily depend on tourism. Tourists are sensitive to climate and to climate change, which will affect the relative attractiveness of destinations and hence the motive for international tourists to leave their country of origin. Yet, until recently, the attention devoted by the tourism literature to climate change and by the climate change literature to tourism has been quite limited. This paper is divided in two parts. The first part reviews the literature on the relationship between climate change and tourism. We find that the existing studies have but started unveiling the complexities of this relationship, by means of very heterogeneous approaches and scarcely comparable studies. A comprehensive, coherent quantitative message cannot yet be drawn from the literature. The broad qualitative message is clear, however: climate change will affect tourism, and the consequences for the economy might be wide and pervasive. The second part analyses empirically the relationship between climate characteristics, weather extremes and domestic and international tourism demand across Europe, with a focus on Italy. This study draws on the results on the Italian tourist sector of the WISE project, a multi-sector research project that investigates the impacts of extreme weather events on the socio-economic systems of some European countries by means of both quantitative and qualitative analyses. In general, temperature is the strongest indicator of domestic tourism. The relationship between tourism and temperature is generally positive in the same-month all across Europe, except in winter sports regions. The climate impact depends as well on destination type: for example coastal resorts respond more favourably to summer temperature increases than inland resorts. Moreover, it is not just temperature that counts, but also the expectations about future temperature levels; not just the presence of weather extremes, but also the expectations about their future occurrence. Qualitative results, based on individual surveys, show that during an unusually hot summer day trips are more climate-responsive than short breaks, that short breaks are more climate-responsive than main holidays, and that most people tend not to change plans for their main vacation: those that do change either stay at home or in their own country. On the basis of our literature survey and of our empirical study’s results, the paper concludes by indicating the most urgent gaps to be filled in the knowledge about the relationship between climate change and tourism and by pointing at the most promising directions for further research. Keywords: Tourism, Climate change, Extreme weather events Classification-JEL: L83, Q25, C23, C42 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.31 Title: Decentralization and Environment: An Application to Water Policies Author-Name: Maria Angeles Garcia-Valiñas Author-X-Name-First: Maria Angeles Author-X-Name-Last: Garcia-Valiñas Author-WorkPlace-Name: University of Oviedo Abstract: By means of a two-jurisdictional model, this paper analyses the optimal division of environmental policymaking functions among the different government levels, identifying the most appropriate level of decentralization in each case. The paper focuses on water resources policies, with an application to Spanish regions during the 1996-2001 period. The estimation of an environmental quality-consumption transformation function allows the implementation of a simulation to find the most efficient policies in the context of water resources. Keywords: Fiscal federalism, Environmental policies, Water resources Classification-JEL: H77, Q25, Q28 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.32 Title: Concession Length and Investment Timing Flexibility Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Brescia Author-Name: Chiara D.Alpaos Author-X-Name-First: Chiara Author-X-Name-Last: D.Alpaos Author-WorkPlace-Name: University of Brescia Author-Name: Cesare Dosi Author-X-Name-First: Cesare Author-X-Name-Last: Dosi Author-WorkPlace-Name: University of Padova Abstract: When assigning a concession contract, the regulator faces the issue of setting the concession length. Another key issue is whether or not the concessionare should be allowed to set the timing of new investments. In this paper we investigate the impact of concession length and investment timing flexibility on the “concession value”. It is generally argued that long-term contracts are privately valuable as they enable a concessionaire to increase her overall discounted returns. Moreover, the real option theory suggests that investment flexibility has an intrinsic value, as it allows concessionaires to avoid costly errors. By combining these two conventional wisdoms, one may argue that long- term contracts, which allow for investment timing flexibility, should always result in higher concession values. Our result suggests that this is not always the case. Firstly, investment flexibility does not always increase the concession value. Secondly, long-term contracts do not necessarily increase the concession value. Keywords: Concession contracts, Real option theory, Investment timing flexibility, Water utilities Classification-JEL: D81, G31, L95 Creation-Date: 200502 Template-Type: ReDIF-Paper 1.0 Number: 2005.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.33 Title: Key Environmental Innovations Author-Name: Joseph Huber Author-X-Name-First: Joseph Author-X-Name-Last: Huber Author-WorkPlace-Name: Martin-Luther-University Abstract: This paper is based on empirical research on a taxonomy of technological environmental innovations. It draws on a databank with over 500 examples of new technologies (materials, products, processes and practices) which come with benign environmental effects. The approaches applied to interpreting the datasets are innovation life cycle analysis, and product chain analysis. Main results include the following: 1. Innovations merely aimed at eco-efficienc y do in most cases not represent significant contributions to improving the properties of the industrial metabolism. This can better be achieved by technologies that fulfill the criteria of eco-consistency (metabolic consistency), also called eco-effectiveness. 2. Ecological pressure of a technology is basically determined by its conceptual make-up and design. Most promising thus are technologies in earlier rather than later stages of their life cycle (i.e. during R&D and customisation in growing numbers), because it is during the stages before reaching the inflection point and maturity in a learning curve where technological environmental innovations can best contribute to improving ecological consistency of the industrial metabolism while at the same time delivering their maximum increase in efficiency as well.3. Moreover, environmental action needs to focus on early steps in the vertical manufacturing chain rather than on those in the end. Most of the ecological pressure of a technology is no rmally not caused end-of-chain in use or consumption, but in the more basic steps of the manufacturing chain (with the exception of products the use of which consumes energy, e.g. vehicles, appliances). There are conclusions to be drawn for refocusing attention from downstream to upstream in life cycles and product chains, and for a shift of emphasis in environmental policy from regulation to innovation. Ambitious environmental standards, though, continue to be an important regulative precondition of ecologically benign technological innovation. Keywords: Technological innovation, Environmental innovation, Life cycle analysis, Sustainability strategies, Environmental policy Classification-JEL: O33, Q00 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.34 Title: Pairwise-Stability and Nash Equilibria in Network Formation Author-Name: Antoni Calvó-Armengol Author-X-Name-First: Antoni Author-X-Name-Last: Calvó-Armengol Author-WorkPlace-Name: Universitat Autònoma de Barcelona, Université de Toulouse Sciences Sociales and CEPR Author-Name: Rahmi Ilkiliç Author-X-Name-First: Rahmi Author-X-Name-Last: Ilkiliç Author-WorkPlace-Name: Universitat Autònoma de Barcelona Abstract: Suppose that individual payoffs depend on the network connecting them. Consider the following simultaneous move game of network formation: players announce independently the links they wish to form, and links are formed only under mutual consent. We provide necessary and sufficient conditions on the network link marginal payoffs such that the set of pairwise stable, pairwise-Nash and proper equilibrium networks coincide, where pairwise stable networks are robust to one-link deviations, while pairwise-Nash networks are robust to one-link creation but multi-link severance. Under these conditions, proper equilibria in pure strategies are fully characterized by one-link deviation checks. Keywords: Network formation, Pairwise-stability, Proper equilibrium Classification-JEL: C62, C72, D85, L14 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.35 Title: Network Formation with Endogenous Decay Author-Name: Francesco Feri Author-X-Name-First: Francesco Author-X-Name-Last: Feri Author-WorkPlace-Name: Ca’ Foscari University Abstract: This paper considers a communication network characterized by an endogenous architecture and an imperfect transmission of information as in Bala and Goyal (2000). We propose a similar network's model with the difference that it is characterized by an endogenous rate of information decay. Endogenous decay is modelled as dependent on the result of a coordination game, played by every pair of directly linked agents and characterized by 2 equilibria: one efficient and the other risk dominant. Differently from other models, where the network represents only a channel to obtain information or to play a game, in our paper the network has an intrinsic value that depends on the chosen action in the coordination game by each participant. Moreover the endogenous network structure affects the play in the coordination game as well as the latter affects the network structure. The model has a multiplicity of equilibria and we produce a full characterization of those are stochastically stable. For sufficiently low link costs we find that in stochastically stable states network structure is ever efficient; individuals can be coordinated on efficient as well as on risk dominant action depending on the decay difference among the two equilibria in the single coordination game. For high link costs stochastically stable states can display networks that are not efficient; individuals are never coordinated on the efficient action. Keywords: Network, Decay, Strategical interaction Classification-JEL: A14, D20, J00 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.36 Title: Strategic Basins of Attraction, the Farsighted Core, and Network Formation Games Author-Name: Frank H. Page, Jr. Author-X-Name-First: Frank H. Author-X-Name-Last: Page, Jr. Author-WorkPlace-Name: University of Alabama Author-Name: Myrna H. Wooders Author-X-Name-First: Myrna H. Author-X-Name-Last: Wooders Author-WorkPlace-Name: Vanderbilt University and University of Warwick Abstract: We make four main contributions to the theory of network formation. (1) The problem of network formation with farsighted agents can be formulated as an abstract network formation game. (2) In any farsighted network formation game the feasible set of networks contains a unique, finite, disjoint collection of nonempty subsets having the property that each subset forms a strategic basin of attraction. These basins of attraction contain all the networks that are likely to emerge and persist if individuals behave farsightedly in playing the network formation game. (3) A von Neumann Morgenstern stable set of the farsighted network formation game is constructed by selecting one network from each basin of attraction. We refer to any such von Neumann-Morgenstern stable set as a farsighted basis. (4) The core of the farsighted network formation game is constructed by selecting one network from each basin of attraction containing a single network. We call this notion of the core, the farsighted core. We conclude that the farsighted core is nonempty if and only if there exists at least one farsighted basin of attraction containing a single network. To relate our three equilibrium and stability notions (basins of attraction, farsighted basis, and farsighted core) to recent work by Jackson and Wolinsky (1996), we define a notion of pairwise stability similar to the Jackson-Wolinsky notion and we show that the farsighted core is contained in the set of pairwise stable networks. Finally, we introduce, via an example, competitive contracting networks and highlight how the analysis of these networks requires the new features of our network formation model. Keywords: Basins of attraction, Network formation, Supernetworks, Farsighted core, Nash networks Classification-JEL: A14, D20, J00 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.37 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-037.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.37 Title: Information Channels in Labor Markets. On the Resilience of Referral Hiring Author-Name: Alessandra Casella Author-X-Name-First: Alessandra Author-X-Name-Last: Casella Author-WorkPlace-Name: Columbia University Author-Name: Nobuyuki Hanaki Author-X-Name-First: Nobuyuki Author-X-Name-Last: Hanaki Author-WorkPlace-Name: Earth Institute, Columbia University Abstract: Economists and sociologists disagree over markets' potential to assume functions typically performed by networks of personal connections, first among them the transmission of information. This paper begins from a model of labor markets where social ties are stronger between similar individuals and firms employing productive workers prefer to rely on personal referrals than to hire on the anonymous market (Montgomery (1991). However, we allow workers in the market to engage in a costly action that can signal their high productivity, and ask whether the possibility of signaling reduces the reliance on the network. We find that the network is remarkably resilient. To be effective signaling must fulfill two contradictory requirements: unless the signal is extremely precise, it must be expensive or it is not informative; but it must be cheap, or the network can undercut it. Keywords: Networks, Signaling, Referral hiring, Referral premium Classification-JEL: A14, J31, J41, D83 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.38 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-038.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.38 Title: Social Games: Matching and the Play of Finitely Repeated Games Author-Name: Matthew O. Jackson Author-X-Name-First: Matthew O. Author-X-Name-Last: Jackson Author-WorkPlace-Name: Humanities and Social Sciences Author-Name: Alison Watts Author-X-Name-First: Alison Author-X-Name-Last: Watts Author-WorkPlace-Name: Southern Illinois University Abstract: We examine a new class of games, which we call social games, where players not only choose strategies but also choose with whom they play. A group of players who are dissatisfied with the play of their current partners can join together and play a new equilibrium. This imposes new refinements on equilibrium play, where play depends on the relative populations of players in different roles, among other things. We also examine finite repetitions of games where players may choose to rematch in any period. Some equilibria of fixed-player repeated games cannot be sustained as equilibria in a repeated social game. Conversely, the set of repeated matching (or social) equilibria also includes some plays that are not part of any subgame perfect equilibrium of the corresponding fixed-player repeated games. We explore existence under different equilibrium definitions, as well as the relationship to renegotiation-proof equilibrium. It is possible for repeated matching equilibria to be completely distinct from renegotiation-proof equilibria, and even to be Pareto inefficient. Keywords: Social games, Matching, Games, Repeated games, Renegotiation Classification-JEL: A14, C71, C72, C78, J41 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.39 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-039.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.39 Title: The Egalitarian Sharing Rule in Provision of Public Projects Author-Name: Alexei Savvateev Author-X-Name-First: Alexei Author-X-Name-Last: Savvateev Author-WorkPlace-Name: New Economic School Author-Name: Anna Bogomolnaia Author-X-Name-First: Anna Author-X-Name-Last: Bogomolnaia Author-WorkPlace-Name: Rice University Author-Name: Michel Le Breton Author-X-Name-First: Michel Author-X-Name-Last: Le Breton Author-WorkPlace-Name: Université de Toulouse I, GREMAQ and IDEI Author-Name: Shlomo Weber Author-X-Name-First: Shlomo Author-X-Name-Last: Weber Author-WorkPlace-Name: SMU, CORE, Catholic University of Louvain and CEPR Abstract: In this note we consider a society that partitions itself into disjoint jurisdictions, each choosing a location of its public project and a taxation scheme to finance it. The set of public project is multi-dimensional, and their costs could vary from jurisdiction to jurisdiction. We impose two principles, egalitarianism, that requires the equalization of the total cost for all agents in the same jurisdiction, and efficiency, that implies the minimization of the aggregate total cost within jurisdiction. We show that these two principles always yield a core-stable partition but a Nash stable partition may fail to exist. Keywords: Jurisdictions, Stable partitions, Public projects, Egalitarianism Classification-JEL: C71, C72, D63, H41 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.40 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-040.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.40 Title: Stochastic Stability in Network with Decay Author-Name: Francesco Feri Author-X-Name-First: Francesco Author-X-Name-Last: Feri Author-WorkPlace-Name: Ca’ Foscari University Abstract: This paper considers a simple communication network characterized by an endogenous architecture and an imperfect transmission of information. We analyze the process of network formation in a dynamic framework where self – interested individuals can form or delete links and, occasionally, are doing mistakes. Then, using stochastic stability, we identify which network structures the formation process will converge to. Keywords: Network, Decay, Strategical interaction Classification-JEL: A14, D20, J00 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.41 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-041.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.41 Title: Dynamic Effects on the Stability of International Environmental Agreements Author-Name: Aart de Zeeuw Author-X-Name-First: Aart de Zeeuw Author-X-Name-Last: de Zeeuw Author-WorkPlace-Name: Tilburg University Abstract: In terms of the number of signatories, one observes both large and small international environmental agreements. The theoretical literature, based on game theory, discusses different concepts and mechanisms for the stability of coalitions and has reached the conclusion that, under farsightedness, both large and small stable coalitions can occur. In the context of a repeated game, this implies that large stable coalitions can also be sustained over time by a simple trigger mechanism, for large enough discount factors. However, if changes in time implement changes in state, this conclusion does not hold anymore: only small stable coalitions can be sustained. Keywords: IEA’s, Coalitional stability, Dynamics Classification-JEL: Q2, C70, F42 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.42 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-042.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.42 Title: Measuring the Economic Value of Two Habitat Defragmentation Policy Scenarios for the Veluwe, The Netherlands Author-Name: Paulo A.L.D. Nunes Author-X-Name-First: Paulo A.L.D. Author-X-Name-Last: Nunes Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: C. Martijn van der Heide Author-X-Name-First: C. Martijn Author-X-Name-Last: van der Heide Author-WorkPlace-Name: Agricultural Economics Research Institute (LEI), Public Issues Division Author-Name: Jeroen C.J.M. van den Bergh Author-X-Name-First: Jeroen C.J.M. Author-X-Name-Last: van den Bergh Author-WorkPlace-Name: Faculty of Economics and Business Administration, Institute for Environmental Studies, Free University Author-Name: Ekko C. van Ierland Author-X-Name-First: Ekko C. Author-X-Name-Last: van Ierland Author-WorkPlace-Name: Wageningen University Abstract: This paper offers an economic value assessment of a nature protection programme in the Veluwe. This programme involves two defragmentation scenarios: the first scenario connects the central part of the Veluwe with the IJssel river forelands in a north-eastern direction, while the second scenario is focused on defragmentation in a south-western direction, where the Rhine river forelands are located. The valuation is based on a questionnaire that was administered during face-to-face interviews in the Veluwe area and through the Internet. We employ a contingent valuation approach to assess the respondents’ willingness to pay for the realisation of the defragmentation scenarios. It appears that the mean willingness to pay for the two defragmentation scenarios are € 59.7 and € 162.2 per respondent. These two willingness-to-pay estimates, which refer to a lump sum payment (or ‘once-and-for-all payment’), are based on a lognormal and Weibull distribution respectively. In addition to the willingness to pay, we also estimate recreation benefits of the Veluwe. To that end, we use the travel cost technique, the purpose of which is to arrive at an estimate of the site’s consumer surplus. According to this technique, the yearly recreational benefits are estimated between € 0.06 and € 0.45 per visitor. Whereas the former estimate is based on the fuel costs only, the latter covers also insurance and maintenance costs, and capital depreciation. Finally, we performed an aggregation of individual WTP estimates over Dutch households. With the resulting aggregate estimates we are able to compare the total costs and benefits of the two scenarios for habitat fragmentation in the Veluwe. The result of such a simple comparison turns out to critically depend on whether the mean or median estimate is used for aggregation. If aggregation of individual WTP estimates is based on mean values, then the benefits far exceed the estimated costs of defragmentation. In other words, based on an integrated economic-ecological analysis it makes sense to execute the defragmentation measures described in the scenarios. However, aggregate estimates obtained by using median values result in higher costs than aggregate estimates that are based on mean values. Even stronger, median-based estimates show that the costs of implementing scenario 2 are higher than the total benefits of this scenario. Keywords: Economic value, Nature protection, Defragmentation policy, Veluwe Classification-JEL: Q50, Q57, Q58 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.43 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-043.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.43 Title: Abnormal Returns in Privatization Public Offerings: The Case of Portuguese Firms Author-Name: Carla Vieira Author-X-Name-First: Carla Author-X-Name-Last: Vieira Author-WorkPlace-Name: Faculdade de Economia da Universidade do Porto Author-Name: Ana Paula Serra Author-X-Name-First: Ana Paula Author-X-Name-Last: Serra Author-WorkPlace-Name: CEMPRE, Faculdade de Economia da Universidade do Porto Abstract: This paper provides evidence on abnormal returns of Portuguese privatization public offerings for the period from 1989 to 2001. Previous empirical studies report the existence of underpricing for privatized firms in the short-run and positive abnormal returns in the long run. This study explores the abnormal performance of a comprehensive sample of Portuguese privatization transactions and investigates the determinants of the observed price behavior. Our results are not supportive of the underpricing phenomenon except if we exclude the very extreme observations. The results show further that privatization IPOs underperform private sector IPOs. In the long run, we observe negative abnormal returns. While in early event months, privatization public offerings yield more negative returns than private sector offerings, this effect is reversed in longer horizon periods. Initial underpricing is thus reversed and investors seem to require higher returns in partial privatizations. Keywords: Privatization, IPOs Classification-JEL: G38, G32 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.44 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-044.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.44 Title: Combining Actual and Contingent Behavior to Estimate the Value of Sports Fishing in the Lagoon of Venice Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland Author-Name: Valentina Zanatta Author-X-Name-First: Valentina Author-X-Name-Last: Zanatta Author-WorkPlace-Name: DICAS, Politecnico di Torino and Fondazione Eni Enrico Mattei Author-Name: Paolo Rosato Author-X-Name-First: Paolo Author-X-Name-Last: Rosato Author-WorkPlace-Name: DIC, Università di Trieste and Fondazione Eni Enrico Mattei Abstract: This paper reports the results of a Travel Cost Method (TCM) study about the recreational use of the Lagoon of Venice for sports fishing. In April-July 2002, we conducted a mail survey of anglers with valid licenses fishing on the Lagoon of Venice to gather data on their fishing trips, behaviors and expenditures over the previous year. We also asked questions about trips that would be undertaken under hypothetical changes in the price of a trip and/or in the catch rate. Actual and hypothetical trips are combined to estimate single-site TCM demand function for trips. We propose several models to test whether it is acceptable to pool hypothetical and actual trip data, focusing on the respondent heterogeneity in the contingent behavior questions. Our models suggest actual and contingent behavior are driven by the same demand function, and can be pooled for estimation purposes. We use this estimated demand function, and its shift when the catch rate is improved, to compute angler surplus at the current catch rate and the change in surplus accruing from a 50% improvement in the catch rate. For the average angler in our sample, the former is about €1,700 a year, while the latter is about €2,800. Keywords: Sports fishing value, Travel cost method, Environmental improvement Classification-JEL: Q26, Q51 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.45 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-045.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.45 Title: Participation in International Environmental Agreements: The Role of Timing and Regulation Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: University of Hagen Author-Name: Bianca Rundshagen Author-X-Name-First: Bianca Author-X-Name-Last: Rundshagen Author-WorkPlace-Name: University of Hagen Abstract: We analyze the formation of self-enforcing international environmental agreements under the assumption that countries announce their participation either simultaneously or sequentially. It is shown that a sequential formation process opens up possibilities for strategic behavior of countries that may lead to inferior outcomes in terms of global abatement and welfare. We then analyze whether and under which conditions a regulator like an international organization, even without enforcement power, can improve upon globally suboptimal outcomes through coordination and moderation, given that recommendations must be Pareto-improving to all parties. Keywords: International environmental agreements, Timing of participation decision, Coalition theory, Role of international regulator Classification-JEL: C72, D70, H41, Q50 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.46 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-046.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.46 Title: Are EU Environmental Policies Too Demanding for New Members States? Author-Name: Lorenzo Pellegrini Author-X-Name-First: Lorenzo Author-X-Name-Last: Pellegrini Author-WorkPlace-Name: Vrije Universiteit Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: Vrije Universiteit Abstract: In 2004, ten new states entered the European Union. Relative to the pre-2004 member states, these accession states have lower environmental standards, and some worry that it will be too demanding for these new EU members to fully comply with European environmental provisions. In this paper, we assess one rationale for such harmonization. Specifically, we analyze the determinants of environmental policies’ stringency, and show that differences in corruption levels are more important as explanatory factor when compared to income differentials. Since high levels of corruption characterize some countries in the enlarged EU, we argue that this is a good reason for an upward harmonization of environmental policies at the EU level. Keywords: Corruption, European union, Environmental policy Classification-JEL: C31, K00, Q53 Creation-Date: 200503 Template-Type: ReDIF-Paper 1.0 Number: 2005.47 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-047.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.47 Title: Modeling Factor Demands with SEM and VAR: An Empirical Comparison Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei Abstract: The empirical analysis of the economic interactions between factors of production, output and corresponding prices has received much attention over the last two decades. Most contributions in this area have agreed on the neoclassical principle of a representative optimizing firm and typically use theory-based structural equation models (SEM). A popular alternative to SEM is given by the vector autoregression (VAR) methodology. The most recent attempts to link the SEM approach with VAR analysis in the area of factor demands concentrate on single-equation models, whereas no effort has been devoted to compare these alternative approaches when a firm is assumed to face a multi-factor technology and to decide simultaneously the optimal quantity for each input. This paper bridges this gap. First, we illustrate how the SEM and the VAR approaches can both represent valid alternatives to model systems of dynamic factor demands. Second, we show how to apply both methodologies to estimate dynamic factor demands derived from a cost-minimizing capital-labour-energy-materials (KLEM) technology with adjustment costs (ADC) on the quasi-fixed capital factor. Third, we explain how to use both models to calculate some widely accepted indicators of the production structure of an economic sector, such as price and quantity elasticities, and alternative measures of ADC. In particular, we propose and discuss some theoretical and empirical justifications of the differences between observed elasticities, measures of ADC, and the assumption of exogeneity of output and/or input prices. Finally, we offer some suggestions for the applied researcher. Keywords: Simultaneous equation models, Vector autoregression models, Factor demands, Dynamic duality Classification-JEL: C30, C52, D92 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.48 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-048.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.48 Title: A Characterization of Stochastically Stable Networks Author-Name: Vincent Vannetelbosch Author-X-Name-First: Vincent Author-X-Name-Last: Vannetelbosch Author-WorkPlace-Name: CORE, Université Catholique de Louvain Author-Name: Olivier Tercieux Author-X-Name-First: Olivier Author-X-Name-Last: Tercieux Author-WorkPlace-Name: CentER, Tilburg University Abstract: Jackson and Watts [J. of Econ. Theory 71 (2002), 44-74] have examined the dynamic formation and stochastic evolution of networks. We provide a refinement of pairwise stability, p-pairwise stability, which allows us to characterize the stochastically stable networks without requiring the "tree construction" and the computation of resistance that may be quite complex. When a 1/2-pairwise stable network exists, it is unique and it coincides with the unique stochastically stable network. To solve the inexistence problem of p-pairwise stable networks, we define its set-valued extension with the notion of p-pairwise stable set. The 1/2-pairwise stable set exists and is unique. Any stochastically stable network is included in the 1/2-pairwise stable set. Thus, any network outside the 1/2-pairwise stable set must be considered as a nonrobust network. We also show that the 1/2-pairwise stable set can contain no pairwise stable network and we provide examples where a set of networks is more "stable" than a pairwise stable network. Keywords: Network formation, Pairwise stability, Stochastic stability Classification-JEL: C70, D20 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.49 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-049.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.49 Title: R&D Networks Among Unionized Firms Author-Name: Vincent Vannetelbosch Author-X-Name-First: Vincent Author-X-Name-Last: Vannetelbosch Author-WorkPlace-Name: FNRS and CORE, Université Catholique de Louvain Author-Name: Ana Mauleon Author-X-Name-First: Ana Author-X-Name-Last: Mauleon Author-WorkPlace-Name: FNRS and CEREC, Facultés Universitaires Saint-Louis Author-Name: José Sempere-Monerris Author-X-Name-First: José Author-X-Name-Last: Sempere-Monerris Author-WorkPlace-Name: University of Valencia Abstract: We develop a model of strategic networks in order to analyze how trade unions will affect the stability and efficiency of R&D collaboration networks in an oligopolistic industry with three firms. Whenever firms settle wages, the complete network is always pairwise stable and the partially connected network is stable if and only if spillovers are large enough. If spillovers are small, the complete network is the efficient network; otherwise, the efficient network is the partially connected network. Thus, a conflict between stability and efficiency may occur: efficient networks are pairwise stable, but the reverse is not true. Strong stability even reinforces this conflict. However, once unions settle wages such conflict disappears: the complete network is the unique pairwise and strongly stable network and is the efficient network whatever the spillovers. Keywords: Networks, R&D collaboration, Oligopoly, Unions Classification-JEL: C70, L13, L20, J50, J52 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.50 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-050.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.50 Title: Optimal Transfers and Participation Decisions in International Environmental Agreements Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice Author-Name: Johan Eyckmans Author-X-Name-First: Johan Author-X-Name-Last: Eyckmans Author-WorkPlace-Name: Europese Hogeschool Brussel and Katholieke Universiteit Leuven, Centrum voor Economische Studiën Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: University of Hagen Abstract: The literature on international environmental agreements has recognized the role transfers play in encouraging participation in international environmental agreements (IEAs), but the few results achieved so far are overly specific and do not exploit the full potential of transfers for successful treaty-making. Therefore, in this paper, we develop a framework that enables us to study the role of transfers in a more systematic way. We propose a design for transfers using both internal and external financial resources and making “welfare optimal agreements” self-enforcing. To illustrate the relevance of our transfer scheme for actual treaty-making, we use a well-known integrated assessment model of climate change to show how appropriate transfers may be able to induce almost all countries into signing a self-enforcing climate treaty. Keywords: Self-enforcing international environmental agreements, Climate policy, Transfers Classification-JEL: C72, H23, Q25, Q28 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.51 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-051.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.51 Title: From the Theory of the Firm to FDI and Internalisation: A Survey Author-Name: Valeria Gattai Author-X-Name-First: Valeria Author-X-Name-Last: Gattai Author-WorkPlace-Name: Università Bocconi, ISESAO Abstract: This paper surveys recent contributions on the Internalisation issue, based on different theories of the firm, to show how the make-or-buy decision, at an international level, has been assessed through the opening up of the “black box” - traditionally explored by the theorists of the firm – and the simultaneous endogenization of the market environment – as in the International Economics tradition. In particular, we consider three Archetypes – Grossman-Hart-Moore treatment of hold-up and contractual incompleteness, Holmstrom-Milgrom view of the firm as an incentive system, Aghion-Tirole conceptualisation of formal and real authority in organisations – and show how they have been embedded in industry and general equilibrium models of FDI to explain the boundaries of global firms. Keywords: FDI, Internalisation, International Economics, Incomplete contracts Classification-JEL: F1, F2, L1, L2 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.52 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-052.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.52 Title: Multilateral Environmental Agreements and Trade Obligations: A Theoretical Analysis of the Doha Proposal Author-Name: Alireza Naghavi Author-X-Name-First: Alireza Author-X-Name-Last: Naghavi Author-WorkPlace-Name: PSE, Ecole Normale Supèrieure Abstract: The Doha declaration on trade and environment proposed to clarify the relationship between multilateral environmental agreement (MEA) trade obligations and WTO rules by only guaranteeing economic integration upon ratification of certain MEAs. In other words, it pushed to authorize the use of trade measures against non-compliance, denying a non-signatory of its WTO rights to exercise countervailing tariffs. This paper demonstrates that the Doha proposal can be effective when environmental policy and its trade obligations are endogenous. Under plausible circumstances, ratification by a non-signatory to the MEA along with free trade as a reward is the unique equilibrium outcome. Delocation to pollution havens does not occur, as optimal tariffs are positive if standards are not adopted. Tariffs however only work as a credible threat and do not emerge in equilibrium. Results are consistent with broad empirical evidence that opposes the pollution haven hypothesis and suggests capital movements to be non-pollution related. Keywords: Environmental policy, WTO, Location of firms, Green tariffs, Multilateral environmental agreements, Doha declaration Classification-JEL: F13, F18, F23, H23, Q56, R38 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.53 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-053.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.53 Title: Economic Valuation of On Site Material Damages of High Water on Economic Activities based in the City of Venice: Results from a Dose-Response-Expert-Based Valuation Approach Author-Name: Paulo A.L.D. Nunes Author-X-Name-First: Paulo A.L.D. Author-X-Name-Last: Nunes Author-WorkPlace-Name: University of Venice, Fondazione Eni Enrico Mattei and Free University Author-Name: Margaretha Breil Author-X-Name-First: Margaretha Author-X-Name-Last: Breil Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Gretel Gambarelli Author-X-Name-First: Gretel Author-X-Name-Last: Gambarelli Author-WorkPlace-Name: University of Venice, Fondazione Eni Enrico Mattei Abstract: The paper focuses on the economic assessment of damages caused by high water in the city of Venice. In particular, we focus our attention on a valuation exercise that addresses the estimation of monetary, short period, on-site damages due to high water events on the different business activities located in Venice. On-site damages include both mitigation costs, which refer to all types of financial expenditure undergone to avert physical and material damages caused by flooding, and remediation costs, i.e. costs to be sustained for maintenance and substitution of affected building elements. Hence, the present study can be considered as a pioneering attempt to analytically quantify, from an economic point of view, on-site damages from high water. An integrated dose-response modelling and an expert-based valuation approach have been selected as the most suitable economic valuation methodology to shed light on the on-site damages. The main focus of the work is to assess dose-response relationships, which are able to describe the physical effects of high water on the different on-site damage categories, including inner and front doors maintenance, cleaning of pavements and maintenance of the walls. Bearing in mind such an economic valuation framework, we proceed with the estimation of on-site damages not only for the present high water situation (business as usual) but also extend the valuation exercise to three additional high water scenarios: (1) a climate change scenario; (2) a high water protection scenario; and, (3) a combined climate change and protection scenario. Estimation results show that the welfare loss due to on-site, short-term damages supported by the business activities ranges from 3.41 to 4.73 million Euro per year, respectively for the business as usual and climate change scenarios. Finally, we can conclude that the introduction of a public policy protection mechanism that defends the city of Venice from any flooding above 110 cm above the Punta della Salute Tidal Datum, such as the MOSE, will reduce the on-site damages supported by the business activities up to 2.87 million Euro per year. Keywords: High water damages, Venice, Economic valuation Classification-JEL: C29, Q25 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.54 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-054.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.54 Title: Investment and Time to Plan: A Comparison of Structures vs. Equipment in a Panel of Italian Firms Author-Name: Charles Himmelberg Author-X-Name-First: Charles Author-X-Name-Last: Himmelberg Author-WorkPlace-Name: Federal Reserve Bank of New York Author-Name: Alessandra del Boca Author-X-Name-First: Alessandra Author-X-Name-Last: del Boca Author-WorkPlace-Name: Università di Brescia Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Università di Milano Author-Name: Paola Rota Author-X-Name-First: Paola Author-X-Name-Last: Rota Author-WorkPlace-Name: Università di Brescia Abstract: “Time to build” models of investment expenditures play an important role in many traditional and modern theories of the business cycle, especially for explaining the dynamic propagation of shocks. We estimate the structural parameters of a time-to-build model using firm-level investment data on equipment and structures. For equipment expenditures, we find no evidence of time-to-build effects beyond one period. For structures, by contrast, there is clear evidence of time to build in the range of 2-3 years. The contrast between equipment and structures is intuitively reasonable and consistent with previous results. The estimates for structures also indicate that initial-period expenditures are low, and increase as projects near completion. These results provide empirical support for including “time to plan” effects for investment in structures. More generally, these results suggest a potential source of specification error for Q models of investment and production-based asset pricing models that ignore the time required to plan, build and install new capital. Keywords: Investment expenditures, Panel data, Italian firms, Time to build Classification-JEL: D24, G31, C33, C34 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.55 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-055.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.55 Title: Emissions Trading, CDM, JI, and More – The Climate Strategy of the EU Author-Name: Gernot Klepper Author-X-Name-First: Gernot Author-X-Name-Last: Klepper Author-WorkPlace-Name: Kiel Institute for World Economics Author-Name: Sonja Peterson Author-X-Name-First: Sonja Author-X-Name-Last: Peterson Author-WorkPlace-Name: Kiel Institute for World Economics Abstract: The objective of this paper is to assess the likely allocation effects of the current cli-mate protection strategy as it is laid out in the National Allocation Plans (NAPs) for the European Emissions Trading Scheme (ETS). The multi-regional, multi-sectoral CGE-model DART is used to simulate the effects of the current policies in the year 2012 when the Kyoto targets need to be met. Different scenarios are simulated in order to highlight the effects of the grandfathering of permits to energy-intensive installations, the use of the project-based mechanisms (CDM and JI), and the restriction imposed by the supplementarity criterion. Keywords: Kyoto targets, EU, EU emissions trading scheme, National allocation plans, CDM and JI, Computable general equilibrium model, DART Classification-JEL: D58, F18, Q48, Q54 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.56 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-056.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.56 Title: Environmental Regulationand the Eco-Industry Author-Name: Bernard Sinclair-Desgagné Author-X-Name-First: Bernard Author-X-Name-Last: Sinclair-Desgagné Author-WorkPlace-Name: HEC Montréal Author-Name: Maia David Author-X-Name-First: Maia Author-X-Name-Last: David Author-WorkPlace-Name: UMR INRA-INAPG Économie publique Abstract: This paper re-examines environmental regulation, under the assumption that pollution abatement technologies and services are provided by an imperfectly competitive environment industry. It is shown that each regulatory instrument (emission taxes and quotas; design standards; and voluntary agreements) has a specific impact on the price-elasticity of the polluters’ demand for abatement services, hence on the market power of the eco-industry and the resulting cost of abatement. This implies that the optimal pollution tax will be higher than the marginal social cost of pollution, while a voluntary approach to pollution abatement may fail unless the eco-industry itself is willing to participate. Keywords: Pollution regulation, End-of-pipe pollution abatement, Environment industry Classification-JEL: H23, L13, Q58 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.57 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-057.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.57 Title: The Pigouvian Tax Rule in the Presence of an Eco-Industry Author-Name: Bernard Sinclair-Desgagné Author-X-Name-First: Bernard Author-X-Name-Last: Sinclair-Desgagné Author-WorkPlace-Name: HEC Montréal Author-Name: Alain-Désiré Nimubona Author-X-Name-First: Alain-Désiré Author-X-Name-Last: Nimubona Author-WorkPlace-Name: Institute of Applied Economics, HEC Montréal Abstract: Pollution abatement goods and services are now largely being delivered by a specialized “eco-industry.” This note reconsiders Pigouvian taxes in this context. We find that the optimal emission tax will depart from the marginal social cost of pollution according to the polluters’ and the environment firms’ relative market power. Keywords: Pigouvian taxes, Environment industry Classification-JEL: H23, L13 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.58 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-058.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.58 Title: Environmental Innovations: Institutional Impacts on Co-operations for Sustainable Development Author-Name: Helmut Karl Author-X-Name-First: Helmut Author-X-Name-Last: Karl Author-WorkPlace-Name: Ruhr-University Bochum Author-Name: Antje Möller Author-X-Name-First: Antje Author-X-Name-Last: Möller Author-WorkPlace-Name: Ruhr-University Bochum Author-Name: Ximena Matus Author-X-Name-First: Ximena Author-X-Name-Last: Matus Author-WorkPlace-Name: Ruhr-University Bochum Author-Name: Edgar Grande Author-X-Name-First: Edgar Author-X-Name-Last: Grande Author-WorkPlace-Name: Technical University of Munich Author-Name: Robert Kaiser Author-X-Name-First: Robert Author-X-Name-Last: Kaiser Author-WorkPlace-Name: Technical University of Munich Abstract: A suitable strategy for achieving sustainable development is to foster environmental innovations. Environmental innovations, however, suffer from so-called "double externalities", because apart from innovation spillovers they also improve the quality of public environmental goods, which can be used without cost by free riders. Those innovation spillovers can be avoided through co-operation. Furthermore co-operations can be considered as advantageous because environmental innovations often depend on interaction in research and development, production, selling and disposal. This paper analyzes as to what extent institutional factors impact co-operative arrangements of innovative organizations in the development of new environmental technologies. It applies a multi-dimensional institutional analysis focusing not only on institutional arrangements which exist among organizations but also on opportunities and constraints provided by the institutional environment in which these organizations are embedded. Expanding the existing research we will conclude what kind of policy measure may support the success within networks of environmental oriented innovators. Keywords: Environmental innovation, Co-operation, Sustainability, Institutional analysis, Policy measures Classification-JEL: L14, O31, Q55, Q58 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.59 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-059.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.59 Title: Criteria for Assessing Sustainable Development: Theoretical Issues and Empirical Evidence for the Case of Greece Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: University of Crete Author-Name: Dimitra Vouvaki Author-X-Name-First: Dimitra Author-X-Name-Last: Vouvaki Author-WorkPlace-Name: University of Crete Abstract: We formulate two kinds of sustainability criteria by using feedback and arbitrary rules for selecting policy variables in non optimizing economies. We show that when policy variables are selected arbitrarily their accounting prices could determine sustainability in addition to the accounting prices of the economy’s assets. We use our theoretical framework to obtain estimates of sustainability conditions in real economies. Thus, the paper’s contribution consists in developing a systematic theoretical framework for determining value functions, accounting prices and sustainability criteria, under fairly general non-optimizing behavioral rules, and then showing that this framework can be used in applied work to estimate sustainability conditions. Based on our theoretical model, we examined the case of the Greek economy. When there is no binding environmental policy then migration rate, growth of capital per worker and exogenous technical change are strong positive factors for sustainability. When we introduce potential environmental damages due to sulphur dioxide (SO2) emissions, our findings indicate that these damages affect negatively the sustainability criterion. Keywords: Sustainability criteria, Non-declining social welfare, Accounting prices, Non optimizing economy, Feedback rule, Arbitrary rule Classification-JEL: Q01, O13 Creation-Date: 200504 Template-Type: ReDIF-Paper 1.0 Number: 2005.60 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-060.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.60 Title: Impure Public Goods and Technological Interdependencies Author-Name: Dirk T.G. Rübbelke Author-X-Name-First: Dirk T.G. Author-X-Name-Last: Rübbelke Author-WorkPlace-Name: Chemnitz University of Technology Author-Name: Andreas Löschel Author-X-Name-First: Andreas Author-X-Name-Last: Löschel Author-WorkPlace-Name: Zentrum für Europäische Wirtschaftsforschung Abstract: Impure public goods represent an important group of goods. Almost every public good exerts not only effects which are public to all but also effects which are private to the producer of this good. What is often omitted in the analysis of impure public goods is the fact that – regularly – these private effects can also be generated independently of the public good. In our analysis we focus on the effects alternative technologies – independently generating the private effects of the public good – may have on the provision of impure public goods. After the investigation in an analytical impure public good model, we numerically simulate the effects of alternative technologies in a parameterized model for climate policy in Germany. Keywords: Impure public goods, Climate policy, Rationing Classification-JEL: H41, C61, Q53, Q54 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.61 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-061.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.61 Title: Trust and Fiscal Performance: A Panel Analysis with Swiss Data Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: Yale Center for International and Area Studies Author-Name: Christoph A. Schaltegger Author-X-Name-First: Christoph A. Author-X-Name-Last: Schaltegger Author-WorkPlace-Name: Swiss Federal Tax Administration University of St. Gallen and CREMA, Center for Research in Economics, Management and the Arts Abstract: Citizens are willing to abandon their short-term financial interest in free-riding considerably, if governments act in their interest, if procedures of the public decisions-making process are felt to be fair and if other fellow-citizens have to contribute also an adequate share to the community. In such a situation trustworthiness of a government and trust in a government is high. This paper provides empirical evidence that trust is crucial for fiscal performance using data for the full sample of Swiss cantons over the 1981-2001 period. In cantons with high levels of trust, the level of indebtedness is significantly lower. Trust supports fiscal discipline. In order to get a useful approximation for mutual trust among citizens and between citizens and their representatives, we use information from direct voter participation on political issues (initiatives and public referenda) held in Swiss state (cantonal) governments. Electoral support of government proposals reveals an important aspect of trust in a real world setting. Hence, our trust variable measures the behavior at the ballots thereby reducing possible subjective biases derived from surveys and questionnaires. Keywords: Trust, Social capital, Fiscal performance, Indebtedness Classification-JEL: Z130, H110, O170, D720, E620 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.62 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-062.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.62 Title: A Role for Instructions Author-Name: Irene Valsecchi Author-X-Name-First: Irene Author-X-Name-Last: Valsecchi Author-WorkPlace-Name: Università degli Studi di Milano-Bicocca Abstract: The paper is concerned with instructions as a way of setting premises for subsequent decisions in models of teams à la Marschak-Radner, under information diversification. The paper suggests that instructions can bridge people’s differences in knowledge: they do not require mutual understanding between the sender and the receiver as other forms of communication do. In particular, the knowledge of both the team payoff function and the team organisation can be ordered according to hierarchical ranks. First, the paper shows the equivalence between commands and communication in Marschak and Radner (1972). Second, it derives the requirements in terms of knowledge of the members that follow from given structures of task assignment, information diversification and message flows. Hierarchical ranks are shown to correspond to different degrees of intelligibility of the members with respect to the team operations. Keywords: Instructions, Hierarchy, Knowledge, Decentralisation Classification-JEL: D23, L23, M11 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.63 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-063.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.63 Title: A Data Envelopment Analysis Approach to the Assessment of Natural Parks’ Economic Efficiency and Sustainability. The Case of Italian National Parks Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Gianni Locatelli Author-X-Name-First: Gianni Author-X-Name-Last: Locatelli Author-WorkPlace-Name: DISCo, Università di Milano Bicocca Abstract: Wilderness protection is a growing necessity for modern societies, and this is particularly true for areas where population density is extremely high, as for example Europe. Conservation, however, implies very high opportunity costs. It is thus crucial to create incentives to efficient management practices, to promote benchmarking and to improve conservation management. In the present paper we propose a methodology based on Data Envelopment Analysis, DEA, a non parametric benchmarking technique specifically developed to assess the relative efficiency of decision-making units. In particular, the objective of the discussed methodology is to assess the relative efficiency of the management units of the protected area and to indicate how it could be improved, by providing a set of guidelines. The main advantage of this methodology is that it allows to assess the efficiency of natural parks’ management not only internally (comparing the performance of the park to itself in time) but also by external benchmarking, thus providing new and different perspectives on potential improvements. Although the proposed methodology is fairly general, we have applied it to the context of Italian National Parks in order to produce a representative case study. Specifically, the choice of adequate cost and benefit indicators is a very important and delicate phase of any benchmark analysis. For this purpose, a questionnaire was used to investigate the opinions of Italian National Parks managers and stakeholders and to define the relevant indicators for the analysis. Finally, relevant policy implications for the case study are given. Keywords: Data envelopment analysis, Natural park management Classification-JEL: Q01, Q26, Q56 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.64 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-064.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.64 Title: Modeling ‘No-choice’ Responses in Attribute Based Valuation Surveys Author-Name: Arianne T. de Blaeij Author-X-Name-First: Arianne T. Author-X-Name-Last: de Blaeij Author-WorkPlace-Name: Centre Utrecht (URU), Utrecht University Author-Name: Paulo A.L.D. Nunes Author-X-Name-First: Paulo A.L.D. Author-X-Name-Last: Nunes Author-WorkPlace-Name: Free University Author-Name: Jeroen C.J.M. van den Bergh Author-X-Name-First: Jeroen C.J.M. Author-X-Name-Last: van den Bergh Author-WorkPlace-Name: Free University Abstract: We examine the impact of providing a ‘no-choice’ option in an attribute based valuation experiment. The aim of the experiment was to assess monetary values of cockle fishery management practices in the Dutch Wadden Sea for different stakeholder groups, namely Dutch citizens, local residents, and tourists. The current policy debate about the management of the Wadden Sea stresses the fact that individual preferences with respect to cockle-fishery differ. The aim of this paper is to analyze the individual preferences in an objective way. Special attention is given to the influence of including a ‘no-choice option’, which is analyzed using a nested logit model. We test whether the full set of policy options can be considered as close substitutes. The estimation results show that the influence of including the no choice option differs among the stakeholders considered. Keywords: Stakeholder valuation, Stated choice method, Multinomial logit model, Binary logit model Classification-JEL: C25, C29, Q22, Q25, Q51 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.65 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-065.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.65 Title: Applications of Negotiation Theory to Water Issues Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice Author-Name: Carmen Marchiori Author-X-Name-First: Carmen Author-X-Name-Last: Marchiori Author-WorkPlace-Name: London School of Economics and Fondazione Eni Enrico Mattei Author-Name: Alessandra Sgobbi Author-X-Name-First: Alessandra Author-X-Name-Last: Sgobbi Author-WorkPlace-Name: SSAV and Fondazione Eni Enrico Mattei Abstract: The purpose of the paper is to review the applications of non-cooperative bargaining theory to water related issues – which fall in the category of formal models of negotiation. The ultimate aim is that to, on the one hand, identify the conditions under which agreements are likely to emerge, and their characteristics; and, on the other hand, to support policy makers in devising the “rules of the game” that could help obtain a desired result. Despite the fact that allocation of natural resources, especially of trans-boundary nature, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, this paper first discusses the non-cooperative bargaining models applied to water allocation problems found in the literature. Particular attention will be given to those directly modelling the process of negotiation, although some attempts at finding strategies to maintain the efficient allocation solution will also be illustrated. In addition, this paper will focus on Negotiation Support Systems (NSS), developed to support the process of negotiation. This field of research is still relatively new, however, and NSS have not yet found much use in real life negotiation. The paper will conclude by highlighting the key remaining gaps in the literature. Keywords: Negotiation theory, Water, Agreeements, Stochasticity, Stakeholders Classification-JEL: C72, C78, Q25 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.66 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-066.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.66 Title: Advances in Negotiation Theory: Bargaining, Coalitions and Fairness Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice Author-Name: Carmen Marchiori Author-X-Name-First: Carmen Author-X-Name-Last: Marchiori Author-WorkPlace-Name: London School of Economics and Fondazione Eni Enrico Mattei Author-Name: Alessandra Sgobbi Author-X-Name-First: Alessandra Author-X-Name-Last: Sgobbi Author-WorkPlace-Name: SSAV and Fondazione Eni Enrico Mattei Abstract: Bargaining is ubiquitous in real-life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (e.g. climate change control). What factors determine the outcome of negotiations such as those mentioned above? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? This paper addresses these questions by focusing on a non-cooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing non-cooperative bargaining theory, non-cooperative coalition theory, and the theory of fair division, this paper will try to identify the connection among these different facets of the same problem in an attempt to facilitate the progress towards a unified framework. Keywords: Negotiation theory, Bargaining, Coalitions, Fairness, Agreements Classification-JEL: C72, C78 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.67 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-067.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.67 Title: Network Capital and Social Trust: Pre-Conditions for ‘Good’ Diversity? Author-Name: Sandra Wallman Author-X-Name-First: Sandra Author-X-Name-Last: Wallman Author-WorkPlace-Name: University College London Abstract: This paper unpicks the assumption that because social networks underpin social capital, they directly create it – more of one inevitably making more of the other. If it were that simple, the sheer quantity of networks criss-crossing a defined urban space would be a proxy measure for the local stock of social capital. Of course the interrelationships are more complex. Two kinds of complication stand out. The first is specific: networks have both quantitative and qualitative dimensions, but the two elements have no necessary bearing on each other. The shape and extent of a network says nothing about the content of the links between its nodes. Certainly the line we draw between any two of them indicates contact and potential connection, but what kind of contact, how often, how trusting, in what circumstances, to what end…? Reliable answers to these questions need more than surface maps or bird’s eye accounts of who goes where, who speaks to whom. The second complication is a general, not to say universal, difficulty. We are stuck with the fact that sociological concepts - networks, social capital and trust included - are ‘only’ abstractions. They are ways of thinking about the apparent chaos of people behaving all over the place – here, to make it worse, in multi-cultural urban environments - but none of them is visible to be measured, weighed or quantified. This does not make the concepts ‘untrue’, and it should not stop them being useful. My hope is that we can find a nuanced perspective which will at least make the complications intelligible. At best, a multi-layered model will account for diversity in the nature of trust; and for variations in the way social capital is hoarded or distributed within and across ethnic boundaries. It would be contribution enough if we were able to specify the conditions which cause social capital, as Puttnam formulates it, to be exclusionary or inclusionary in its effect. Keywords: Network capital, Social trust, ‘Good’ diversity Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.68 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-068.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.68 Title: On the Determinants of Social Capital in Greece Compared to Countries of the European Union Author-Name: Asimina Christoforou Author-X-Name-First: Asimina Author-X-Name-Last: Christoforou Author-WorkPlace-Name: Athens University of Economics and Business Abstract: Social capital refers to the stock of social relations, based on norms and networks of cooperation and trust that spill over to the market and state to enhance collective action between actors and achieve improved social efficiency and economic growth. The aim of the present paper is to discuss the implications of contemporary literature and empirical findings on social capital for the growth prospects of Greece, compared to the member-states of the European Union. In order to examine the potential of social capital to enhance growth, we must look into the factors that determine the nature and context of trust, norms and networks that have emerged in our multinational, multiethnic and multicultural Europe.The contribution of this paper is to offer insight on the determinants of social capital in Greece, compared to the European Union (EU - former 15 member-states). For this purpose, we regress an index of individual group membership, derived from the European Community Household Panel (ECHP), on a set of individual as well as aggregate factors of social capital. Regression results provide evidence of the impact of both individual and institutional characteristics on group membership. Differences on the extent of group membership between countries might be indicative of the historical and cultural differences that have affected the evolution of social capital across Europe. Particularly in Greece, the relatively low level of group membership compared to the other EU countries might provide further evidence of its low levels of civicness. Historically, its weak civil society has been a result of a prior civic tradition of clientelism under arbitrary rule, the interference of special-interest groups and the lack of credibility and impartiality from the part of the state. And these factors might be responsible for the slow pace in reform and growth observed compared to the rest of the EU. Nevertheless, the findings on the determinants of social capital may direct us to possible means of rebuilding patterns of participatory and cooperative behavior, especially in countries with low levels of trust and civicness, such as Greece. Keywords: Determinants, Social capital in Greece, European union, Diversity Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.69 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-069.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.69 Title: Varieties of Trust Author-Name: Eric M. Uslaner Author-X-Name-First: Eric M. Author-X-Name-Last: Uslaner Author-WorkPlace-Name: University of Maryland Abstract: There are multiple dimensions of trust. The standard meaning I call "strategic trust." But more important is "moralistic trust," which does not stem from experience, but rather is learned early in life and is largely stable over time. Moralistic trust leads people to do good works such as contributing to charity and volunteering time and to be more tolerant toward minorities. Countries with high levels of trust have better functioning governments and redistribute resources from the rich to the poor. Moralistic trust rests upon a foundation of economic equality: The most equal countries have the highest levels of trust. Keywords: Trust, Social capital, Tolerance, Civic engagement Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.70 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-070.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.70 Title: Making Capitalism Work: Social Capital and Economic Growth in Italy, 1970-1995 Author-Name: Thomas P. Lyon Author-X-Name-First: Thomas P. Author-X-Name-Last: Lyon Author-WorkPlace-Name: Indiana University Abstract: Using data on the 20 Italian regions for the period 1970-1995, I examine whether the presence of social capital, as reflected in a number of different measures collected by Putnam (1993), affects economic productivity. I find three types of effects. First, social capital, when treated as an input to regional production, has a positive and significant effect in the South, but a much weaker effect in the North. Second, some forms of social capital can significantly increase regions’ propensities to make physical capital investments; however, dense networks of association reduce capital investment in both the North and South. Instrumental variables estimates show that social capital affects growth both directly and through affecting investment in physical capital. Third, social capital contributes positively to the rate of total factor productivity growth in the Italian regions. Keywords: Social capital, Growth, Investment, Italy Classification-JEL: O17, O47, O52 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.71 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-071.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.71 Title: Citizenship Laws and International Migration in Historical Perspective Author-Name: Graziella Bertocchi Author-X-Name-First: Graziella Author-X-Name-Last: Bertocchi Author-WorkPlace-Name: Università di Modena e Reggio Emilia Author-Name: Chiara Strozzi Author-X-Name-First: Chiara Author-X-Name-Last: Strozzi Author-WorkPlace-Name: Università di Modena e Reggio Emilia Abstract: We investigate the origin, impact and evolution of citizenship laws. Citizenship laws originate from the common and civil law traditions, which apply jus soli and jus sanguinis, respectively. We compile a data set across countries of the world starting from the 19th century. The impact of the original, exogenously-given laws on international migration proves insignificant for the early, mass migration waves, which confirm to be driven primarily by economic incentives. Postwar convergence of citizenship laws is determined by legal tradition and international migration, but also by border stability, the establishment of democracy, the welfare burden, cultural factors and colonial history. Keywords: Citizenship laws, International migration, Legal origins, Democracy, Borders Classification-JEL: F22, K40, N30, O15 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.72 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-072.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.72 Title: Accommodating Differences Author-Name: Elsbeth van Hylckama Vlieg Author-X-Name-First: Elsbeth Author-X-Name-Last: van Hylckama Vlieg Author-WorkPlace-Name: The International Federation for Housing and Planning, The Hague Abstract: Urban Planning is a discipline that covers the whole of spatial expressions of social processes. Like economics and culture, spatial development has an impact on all sectors of policy. The theme of this event focuses on diversity, growth and sustainable development, which are the key points for urban development in general. This paper concentrates on the creation of physical conditions, with particular emphasis on the accommodation of social differences in our built environment, the processes that lead to segregation, and how planning methods could provide a counterweight. Keywords: Urban planning, Spatial development, Diversities Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.73 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-073.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.73 Title: Governance of Diversity Between Social Dynamics and Conflicts in Multicultural Cities. A Selected Survey on Historical Bibliography Author-Name: Ercole Sori Author-X-Name-First: Ercole Author-X-Name-Last: Sori Author-WorkPlace-Name: Università Politecnica delle Marche Author-Name: Renato Sansa Author-X-Name-First: Renato Author-X-Name-Last: Sansa Author-WorkPlace-Name: Università Politecnica delle Marche Abstract: This paper is an excursus on multiculturalism from a historical perspective. It ranges from the encounters of different cultures in ancient times, through the Middle Ages, the Reformation and Counter-Reformation period up to the present times. It describes the peculiarity of the solutions adopted, juridical or social, formal or informal. Although it is difficult to classify the various attitudes towards foreigners, a decisive distinction should be made between modern history and previous times. Until the 19th century the number of migrants was significant in a historical perspective, but limited in absolute terms. May this fact have helped the hosting institutions to encourage a favourable policy towards foreign settlements? Another distinction must be made between high qualified migration and humble and unskilled workers. Cities’ histories are full of discriminatory measures towards local immigrants from villages who swelled the ranks of urban outcasts. Finally, it seems clear that the category of multiculturalism, as a premise for the successful integration of foreigners can only be applied with precautions to historical examples. The challenge of the clash of cultures was tackled differently in past societies, without necessarily meaning that those societies were racist or xenophobic. Successful examples of integration and development with the contribution of diversity in the past could involve exclusion and discrimination apparently unacceptable nowadays. Keywords: Social dynamics, Conflicts, Multicultural cities, Diversities Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.74 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-074.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.74 Title: Identification of Options and Policy Instruments for the Internalisation of External Costs of Electricity Generation. Dissemination of External Costs of Electricity Supply Making Electricity External Costs Known to Policy-Makers MAXIMA Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: The World Bank Author-Name: Alberto Longo Author-X-Name-First: Alberto Author-X-Name-Last: Longo Author-WorkPlace-Name: University of Bath Abstract: In the present paper, after reviewing the results of the ExternE project and its follow-up stages in the estimation of the external costs of electricity production, we look at the policy instruments for the internalisation of such costs. Emphasis is given to subsidies, such as feed-in tariffs, competitive bidding processes and tradable green certificates to stimulate the use of renewables in the production of electricity. When policy-makers are asked to choose the instrument(s) to internalise the externalities in the electricity production, they have to find a solution that gives the best outcome in terms of efficiency, cost minimisation, impact on the job market, security of energy supply, equity of the instrument, technological innovation, certainty of the level of the internalisation, and feasibility. The choice of the instrument will require some trade-offs among these criteria. Conjoint choice analysis can help in investigating how stakeholders and policy makers trade off the criteria when choosing a policy for the internalisation of the externalities. In this paper we present the first results of a questionnaire that employs conjoint choice questions to find out how policy makers and stakeholders of the electricity market trade off some socio-economic aspects in the selection of the policy instruments for the internalisation of the externalities. The results of this first set of interviews will be useful for further research. Keywords: Policy instruments, ExternE, External costs, Electricity, Conjoint choice analysis Classification-JEL: Q42, Q48, Q51 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.75 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-075.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.75 Title: Asymmetric Error Correction Models for the Oil-Gasoline Price Relationship Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei Author-Name: Margherita Grasso Author-X-Name-First: Margherita Author-X-Name-Last: Grasso Author-WorkPlace-Name: University College London Abstract: The existing literature on price asymmetries does not systematically investigate the sensitivity of the empirical results to the choice of a particular econometric specification. This paper fills this gap by providing a detailed comparison of the three most popular models designed to describe asymmetric price behaviour, namely asymmetric ECM, autoregressive threshold ECM and ECM with threshold cointegration. Each model is estimated on a common monthly dataset for the gasoline markets of France, Germany, Italy, Spain and UK over the period 1985-2003. All models are able to capture the temporal delay in the reaction of retail prices to changes in spot gasoline and crude oil prices, as well as some evidence of asymmetric behaviour. However, the type of market and the number of countries which are characterized by asymmetric oil-gasoline price relations vary across models. The asymmetric ECM yields some evidence of asymmetry for all countries, mainly at the distribution stage. The threshold ECM strongly rejects the null hypothesis of symmetric price behaviour, particularly in the case of France and Germany. Finally, the ECM with threshold cointegration finds long-run asymmetry for each country in the reaction of retail prices to oil price changes. Keywords: Oil prices, Gasoline prices, Asymmetries, Error correction models Classification-JEL: C22, D40, Q40 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.76 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-076.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.76 Title: Hunting the Living Dead A “Peso Problem” in Corporate Liabilities Data Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei Author-Name: Umberto Cherubini Author-X-Name-First: Umberto Author-X-Name-Last: Cherubini Author-WorkPlace-Name: University of Bologna Abstract: Recent literature has pointed out that information asymmetries may be the reason for the poor performance of structural credit risk models to fit corporate bond data. It is well known in fact that these models lead to a strong understatement of the credit spread terms structure, particularly on the short maturity end. Possible explanations stem from strategic debt service behavior and, as discovered more recently, the problem of accounting transparency. This raises the possibility that some of these flaws could be reconducted to a sort of “peso problem”, i.e. that the market may ask for a premium in order to allow for a small probability that accounting data may actually be biased (Baglioni and Cherubini, 2005). In this paper we propose a modified version of the Duan (1994,2000) MLE approach to structural models estimation in order to allow for this “peso problem” effect. The model is estimated for the Parmalat case, one of the most famous cases of accounting opacity, using both equity and CDS data. Keywords: Credit risk, Corporate debt, Peso problem, Maximum likelihood, Transformed data Classification-JEL: C22, G33 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.77 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-077.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.77 Title: Cartel Stability under an Optimal Sharing Rule Author-Name: Hans-Peter Weikard Author-X-Name-First: Hans-Peter Author-X-Name-Last: Weikard Author-WorkPlace-Name: Wageningen University Abstract: Previous work on the formation and stability of cartels has focused on the case of identical players. This assumption is very restrictive in many economic environments. This paper analyses stability of cartels in games with heterogeneous players and spillovers to non-members. I introduce a sharing rule for coalition payoffs, called "optimal sharing" which stabilises all cartels that are possibly stable under any rule. Under optimal sharing the grand coalition is the unique stable cartel if spillovers are negative. I introduce a new property, called "non-essentiality" and determine the set of stable cartels under optimal sharing if spillovers are positive and if the non-essentiality property applies. Finally I analyse cartel stability under optimal sharing in simple public goods game with heterogeneous players. My results show – in contrast to earlier findings for identical players – that large coalitions may well be stable. Keywords: Cartel stability, Coalition formation games with spillovers, Partition function approach, Optimal sharing rule Classification-JEL: C72, D72, H41 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.78 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-078.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.78 Title: Local and Global Interactions in an Evolutionary Resource Game Author-Name: Joëlle Noailly Author-X-Name-First: Joëlle Author-X-Name-Last: Noailly Author-WorkPlace-Name: CPB Netherlands Bureau for Economic Policy Analysis Author-Name: Jeroen C.J.M. van den Bergh Author-X-Name-First: Jeroen C.J.M. Author-X-Name-Last: van den Bergh Author-WorkPlace-Name: Free University Author-Name: Cees A. Withagen Author-X-Name-First: Cees A. Author-X-Name-Last: Withagen Author-WorkPlace-Name: Free University and Tilburg University Abstract: Conditions for the emergence of cooperation in a spatial common-pool resource game are studied. This combines in a unique way local and global interactions. A fixed number of harvesters are located on a spatial grid. Harvesters choose among three strategies: defection, cooperation, and enforcement. Individual payoffs are affected by both global factors, namely, aggregate harvest and resource stock level, and local factors, such as the imposition of sanctions on neighbors by enforcers. The evolution of strategies in the population is driven by social learning through imitation. Numerous types of equilibria exist in these settings. An important new finding is that clusters of cooperators and enforcers can survive among large groups of defectors. We discuss how the results contrast with the non-spatial, but otherwise similar, game of Sethi and Somanathan (1996). Keywords: Common property, Cooperation, Evolutionary game theory, Global interactions, Local interactions, Social norms Classification-JEL: C72, Q2 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.79 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-079.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.79 Title: Spatial Evolution of Social Norms in a Common-Pool Resource Game Author-Name: Joëlle Noailly Author-X-Name-First: Joëlle Author-X-Name-Last: Noailly Author-WorkPlace-Name: CPB Netherlands Bureau for Economic Policy Analysis Author-Name: Cees A. Withagen Author-X-Name-First: Cees A. Author-X-Name-Last: Withagen Author-WorkPlace-Name: Free University and Tilburg University Author-Name: Jeroen C.J.M. van den Bergh Author-X-Name-First: Jeroen C.J.M. Author-X-Name-Last: van den Bergh Author-WorkPlace-Name: Free University Abstract: We study the conditions for the emergence of cooperation in a spatial common-pool resource game. We consider three types of agents: cooperators, defectors and enforcers. The role of enforcers is to punish defectors for overharvesting the resource. Agents are located around a circle and they only observe the actions of their two nearest neighbors. Their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest payoffs on average. Using theoretical and numerical analysis, we find that a large diversity of equilibria exists in this game. In particular, we derive conditions for the occurrence of equilibria in which the three strategies coexist. We also discuss the stability of these equilibria. Finally, we show that introducing resource dynamics favors the occurrence of cooperative equilibria. Keywords: Common property, Evolutionary game theory, Local interactions game, Self-organization, Cooperation Classification-JEL: C72, Q2 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.80 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-080.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.80 Title: Economic Instruments and Induced Innovation: The Case of End-of-Life Vehicles European Policies Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara Author-Name: Roberto Zoboli Author-X-Name-First: Roberto Author-X-Name-Last: Zoboli Author-WorkPlace-Name: CERIS-DSE, National Research Council of Italy Abstract: The paper addresses the dynamic-incentive effect of environmental policy instruments when innovation is uncertain and occurs in very complex industrial subsystems. The case of end-of-life vehicles (ELVs) is considered focusing predominantly on the effects of the European Directive adopted in 2000 which stipulated economic instruments as free take-back, and on the voluntary agreements in place in many EU countries. The ELV case study is an example of a framework where policy-making faces an intrinsic dynamic and systemic environment. Coherent sequences of single innovations taking place in both upstream (car making) and downstream (car recycling/recovery) of the ELV system can give rise to different “innovation paths”, in accordance with cost-benefit considerations, technological options and capabilities associated to the different industrial actors involved. The impact of economic instruments on innovation paths, in particular free take-back, is considered. Deficiencies or difficulties concerning the transmission of incentives between different industries can prevent the creation of new recycling/recovery/reuse markets, giving rise to other less preferable and unexpected outcomes. The implication for policy is a need for an integrated policy approach, as enforceable VAs, in order to create a shared interindustry interest for innovation and to reduce the possible adverse effects which economic instruments exert on innovation through cost benefit impacts on key industrial and waste-related agents involved in the ELV management system. These advantages should be taken into account vis à vis the emergence of Integrated Product Policy (IPP) as a leading concept of EU environmental policy and the associated shift from "extended producer responsibility" to "extended product responsibility". Keywords: ELV, Induced innovation, Dynamic efficiency, Economic instruments, Recycling Classification-JEL: L620, O130, O310, O380 Creation-Date: 200505 Template-Type: ReDIF-Paper 1.0 Number: 2005.81 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-081.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.81 Title: Creative Thinking and Modelling for the Decision Support in Water Management Author-Name: Anna Lasut Author-X-Name-First: Anna Author-X-Name-Last: Lasut Author-WorkPlace-Name: University of Science and Technology Abstract: This paper reviews the state of art in knowledge and preferences elicitation techniques. The purpose of the study was to evaluate various cognitive mapping techniques in order to conclude with the identification of the optimal technique for the NetSyMod methodology. Network Analysis – Creative System Modelling (NetSyMod) methodology has been designed for the improvement of decision support systems (DSS) with respect to the environmental problems. In the paper the difference is made between experts and stakeholders knowledge and preference elicitation methods. The suggested technique is very similar to the Nominal Group Techniques (NGT) with the external representation of the analysed problem by means of the Hodgson Hexagons. The evolving methodology is undergoing tests within several EU-funded projects such as: ITAES, IISIM, NostrumDSS. Keywords: Creative modelling, Cognitive mapping, Preference elicitation techniques, Decision support Classification-JEL: D70, D78, O21, Q0 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.82 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-082.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.82 Title: Using Data Envelopment Analysis to Assess the Relative Efficiency of Different Climate Policy Portfolios Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Barbara Buchner Author-X-Name-First: Barbara Author-X-Name-Last: Buchner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Within the political, scientific and economic debate on climate change, the process of evaluating climate policies ex-ante, during and/or ex-post their lifetime, is receiving increasing attention from international institutions and organisations. The task becomes particularly challenging when the aim is to evaluate strategies or policies from a sustainability perspective. The three pillars of sustainability should then be jointly considered in the evaluation process, thus enabling a comparison of the social, the environmental and the economic dimensions of the policy’s impact. This is commonly done in a qualitative manner and is often based on subjective procedures. The present paper discusses a data-based, quantitative methodology to assess the relative performances of different climate policies, when long term economic, social and environmental impacts of the policy are considered. The methodology computes competitive advantages as well as relative efficiencies of climate policies and is here presented through an application to a sample of eleven global climate policies, considered as plausible for the near future. The proposed procedure is based on Data Envelopment Analysis (DEA), a technique commonly employed in evaluating the relative efficiency of a set of decision making units. We consider here two possible applications of DEA. In the first, DEA is applied coupled with Cost-Benefit Analysis (CBA) in order to evaluate the comparative advantages of policies when accounting for social and environmental impacts, as well as net economic benefits. In the second, DEA is applied to compute a relative efficiency score, which accounts for environmental and social benefits and costs interpreted as outputs and inputs. Although the choice of the model used to simulate future economic and environmental implications of each policy (in the present paper we use the FEEM RICE model), as well as the choice of indicators for costs and benefits, represent both arbitrary decisions, the methodology presented is shown to represent a practical tool to be flexibly adopted by decision makers in the phase of policy design. Keywords: Climate, Policy, Valuation, Data envelopment analysis, Sustainability Classification-JEL: H41, Q51, Q54, C61 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.83 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-083.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.83 Title: Intellectual Property Rights and Biotechnology: How to Improve the Present Patent System Author-Name: Ignazio Musu Author-X-Name-First: Ignazio Author-X-Name-Last: Musu Author-WorkPlace-Name: Ca’ Foscari University of Venice Abstract: This paper discusses the problems related to assigning or denying intellectual property rights to biotechnological innovation, with particular reference to agro-biotechnologies and the relations between developed and developing countries. There are two types of problems to consider. First, the aim of protecting property rights on innovations is to create incentives towards research and innovation in general, which in some cases may be beneficial to society, in others not so. If the assignment of an intellectual property right does not guarantee the potential beneficial use of new knowledge, not assigning rights would not prevent its potentially dangerous utilization. Secondly, the holder of an intellectual property right has a power of exclusion which limits access by others to the newly produced knowledge. However, the production of new knowledge is very often a process which starts from a base of existing knowledge. Hence, discouraging access to existing knowledge also means discouraging the process of producing new knowledge. Paradoxically then, in protecting intellectual property we obtain the opposite result to the one expected and desired. Moreover, the holder of an intellectual property right may end up with excessive market power when commercializing the innovation. This paper will try to show that these problems cannot be solved, as sometimes is suggested, by denying protection of property rights on innovations, but by improving the procedures for awarding these rights and accompanying them with other measures such as liability rules governing potential damage and also antitrust measures. Keywords: Intellectual property rights, Biotechnology, Patent system Classification-JEL: O30, O33, O34 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.84 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-084.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.84 Title: Social Capital, R&D and Industrial Districts Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: University of Ferrara Author-Name: Giulio Cainelli Author-X-Name-First: Giulio Author-X-Name-Last: Cainelli Author-WorkPlace-Name: University of Bari and CERIS-CNR Author-Name: Susanna Mancinelli Author-X-Name-First: Susanna Author-X-Name-Last: Mancinelli Author-WorkPlace-Name: University of Ferrara Abstract: The main idea behind this paper is that social capital is not, as generally suggested by the socio-economic literature, an individual attitude towards something which does not imply privately appropriable economic benefits. Actually, SC might and should be interpreted as a public component of an investment which implies private and public benefits entangled with each other. In order to put forward this idea, a dynamic theoretical model that assumes social capital as the public component of the impure public good R&D is developed. It shows that the ‘civic culture’ of the district area in which the firm works is not sufficient as an incentive to increase its investment in social capital, because this investment strictly depends on the economic convenience of investing in the impure public good. Social capital /networking dynamics might positively and complementarily evolve only if the opportunity cost of investing in innovation is sufficiently low. We consequently focus our attention on a specialized industrial district located in the Emilia Romagna region – the biomedical district of Mirandola (Modena) – characterised by a strong pattern of innovative activity. Using a proxy for innovative activity as dependant variable, we observe that R&D and networking/social capital arise as complementary driving forces for innovation outputs. When empirical evidence confirms that this complementarity plays a key role, and consequently strong links exist between market and non-market dynamics relating to firms, the role for policy actions targeted to social capital is larger. The policy effort should be targeted toward both market and non-market characteristics taken together, rather than solely to the production of (local) public goods (social capital) or innovation inputs as independent elements of firm processes. The input of SC alone is not sufficient to ensure innovation and growth: economic incentives matter. On the other hand, whenever SC dynamics are crucial for R&D private investments, the effect of economic incentives depends on the presence and degree of their complementarity. Keywords: Social capital, R&D, Technological innovation, Industrial districts Classification-JEL: O32, D92, H49 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.85 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-085.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.85 Title: Quality and Investment Decisions in Hospital Care when Physicians are Devoted Workers Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Brescia Author-Name: Rosella Levaggi Author-X-Name-First: Rosella Author-X-Name-Last: Levaggi Author-WorkPlace-Name: University of Brescia Author-Name: Vincenzo Rebba Author-X-Name-First: Vincenzo Author-X-Name-Last: Rebba Author-WorkPlace-Name: Università di Padova Abstract: This paper analyses the decision to invest in quality by a hospital in an environment where doctors are devoted workers, i.e. they care for specific aspects of the output they produce. We assume that quality is the result of both an investment in new technology and the effort of the medical staff. Hospital services are paid on the basis of their marginal cost of production while the number of patients treated depends on a purchasing rule which discriminates for the level and timing of the investment. We show that the presence of devoted doctors affects the trade-off between investment and the purchasing rule so that for the hospital it is not always optimal to anticipate the investment decision. Keywords: Hospital technology, Devoted worker, Quality, Irreversible investment, Real options Classification-JEL: I11, D81 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.86 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-086.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.86 Title: Carbon Capture and Sequestration: How Much Does this Uncertain Option Affect Near-Term Policy Choices? Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Laurent Gilotte Author-X-Name-First: Laurent Author-X-Name-Last: Gilotte Author-WorkPlace-Name: CIRED Abstract: One of the main issues in the climate policy agenda, the timing of abatement efforts, hinges on the uncertainties of climate change risks and technological evolution. We use a stochastic optimization framework and jointly explore these two features. First, we embed in the model future potential large-scale availability of Carbon Capture and Storage (CCS) technologies. While non-CCS mitigation that reduces fossil energy use is modelled as exerting inertia on the economic system, mainly due to the durability of the capital in energy systems and to technology lock-in and lock-out phenomena, the implementation of CCS technologies is modelled as implying less resilience of the system to changes in policy directions. Second, climate uncertainty is related in the model to the atmospheric temperature response to an increase in GHGs concentration. Performing different simulation experiments, we find that the environmental target, derived from a cost-benefit analysis, should be more ambitious when CCS is included in the picture. Moreover, the possible future availability of CCS is not a reason to significantly reduce near-term optimal abatement efforts. Finally, the availability of better information on the climate cycle is in general more valuable than better information on the CCS technological option. Keywords: Climate change, Uncertainty, Sequestration, Cost-benefit analysis Classification-JEL: D62, D63, H23, Q29 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.87 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-087.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.87 Title: Value Through Diversity: Microfinance and Islamic Finance and Global Banking Author-Name: Nicoletta Ferro Author-X-Name-First: Nicoletta Author-X-Name-Last: Ferro Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Internet resources, extended media coverage and international organizations’ reports recently witness the increasing interest of western banks in new models of finance, particularly Islamic finance and microfinance. This new trend is not only channeled through the frame of corporate social responsibilities programs and policies or limited to ad hoc financial institutions (like microcredit banks or Islamic banks) as it is entering the financial offer of mainstream banks. The paper primarily outlines that many elements of microfinance could be considered consistent with the broader goals of Islamic banking. Apart from pure economic considerations which are not the aim of this analysis, the paper supports the thesis that by addressing new markets and embracing unconventional financial proposals, the global banking sector can contribute to the quest for diversity-oriented policies posed by an increasingly globalised scenario. The consequences this new trend is likely to have on inner banking structures are still unknown and are likely to interest the issue of wealth distribution. Moreover, from a more general point of view, by showing that even different moral ethos deep rooted in different cultural paradigms can be as profitable and available as western capitalistic ones, the banking sector can play a potential role in disseminating awareness on specific cultural and religious issues, resulting in increased integration of Muslim communities and low income investors in the long run and supporting commercial banks the close relation between economy and culture. Keywords: Microfinance, Islamic finance, Diversity, Multiculturalism, Global banking Classification-JEL: G21, I31, Z12, Z13, G24 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.88 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-088.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.88 Title: How Substitutable is Natural Capital? Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, World Bank and University of Bath Author-Name: S. Pedroso Author-X-Name-First: Suzette Author-X-Name-Last: Pedroso Author-WorkPlace-Name: World Bank Abstract: One of the recurring themes in the sustainability literature has been the legitimacy of using an economic framework to account for natural resources. This paper examines the potential for substituting between different inputs in the generation of income, where the inputs include natural resources such as land and energy resources. A nested CES production function is used to allow flexibility in the estimated elasticities of substitution. Also, with this specification, natural resources and other inputs are combined in different levels of the function, thus allowing for different levels of substitutability. Institutional and economic indicators are also incorporated in the production function estimated. Results show that the elasticities derived from functions involving land resources were generally around one or greater. Furthermore, changes in trade openness and private sector investment have a statistically significant and direct relationship with income generation. No statistically significant relationship between income and any of the institutional indicators was found. Keywords: Wealth accounting, Natural resources, Nested CES production function Classification-JEL: O47, Q24, Q32 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.89 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-089.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.89 Title: Security of Energy Supply: Comparing Scenarios From a European Perspective Author-Name: Giorgio Vicini Author-X-Name-First: Giorgio Author-X-Name-Last: Vicini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Francesco Gracceva Author-X-Name-First: Francesco Author-X-Name-Last: Gracceva Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and ENEA, National Institute for New Technologies, Energy and Environment Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Valeria Costantini Author-X-Name-First: Valeria Author-X-Name-Last: Costantini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and ENEA, National Institute for New Technologies, Energy and Environment Abstract: This paper compares different results from a set of energy scenarios produced by international energy experts, in order to analyze projections on increasing European external energy dependence and vulnerability. Comparison among different scenarios constitutes the basis of a critical review of existing energy security policies, suggesting alternative or complementary future actions. According to the analysis, the main risks and negative impacts in the long term could be the increasing risk of collusion among exporters due to growing dependence of industrialized countries and insufficient diversification; and a risk of demand/supply imbalance, with consequent instability for exporting regions due to insufficient demand, and lack of infrastructures due to insufficient supply. Cooperation with exporting countries enhancing investments in production capacity, and with developing countries in order to reinforce negotiation capacity of energy importing countries seem to be the most effective policies at international level. Keywords: Energy security, Energy scenarios, Oil and natural gas markets Classification-JEL: Q40, Q41, Q48 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.90 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-090.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.90 Title: Energy Biased Technical Change: A CGE Analysis Author-Name: Vincent M. Otto Author-X-Name-First: Vincent M. Author-X-Name-Last: Otto Author-WorkPlace-Name: Wageningen University Author-Name: Andreas Löschel Author-X-Name-First: Andreas Author-X-Name-Last: Löschel Author-WorkPlace-Name: Centre for European Economic Research (ZEW) Author-Name: Rob Dellink Author-X-Name-First: Rob Author-X-Name-Last: Dellink Author-WorkPlace-Name: Wageningen University Abstract: This paper studies energy bias in technical change. For this purpose, we develop a computable general equilibrium model that builds on endogenous growth models. The model explicitly captures links between energy, the rate and direction of technical change, and the economy. We derive the equilibrium determinants of biased technical change and show the importance of feedback in technical change, substitution possibilities between final goods, and general-equilibrium effects for the equilibrium bias. If the feedback effect is strong, or the substitution elasticity large, or both, our model tends to a corner solution in which only technologies are developed that are appropriate for production of non-energy intensive goods. Keywords: Computable general-equilibrium models, Endogenous technical change, Energy, Environment Classification-JEL: O32, O33, O38, H23, D58 Creation-Date: 200506 Template-Type: ReDIF-Paper 1.0 Number: 2005.91 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-091.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.91 Title: Abuse of Competitive Fringe Author-Name: Carlo Capuano Author-X-Name-First: Carlo Author-X-Name-Last: Capuano Author-WorkPlace-Name: University of Naples FEDERICO II Abstract: The purpose of this article is to analyze how the presence of a competitive fringe, composed by price taker firms, can affect the sustainability of collusive equilibria. Our starting point is that there exists a diffused misunderstanding about its strategical role as collusive minus factor. We deny that. In fact, if it is true that in single dominance cases the presence of a competitive fringe significantly reduces the price increasing profitability and the leader market power, when we consider collective dominance cases the deviation profitability and the punishment mechanism become crucial. In this paper after introducing a minimal structural and strategical framework needed for describing this kind of competition, we prove that not only the presence of a competitive fringe is a collusive plus factor, but also that there exists a critical dimension of the fringe such that collusion is a Nash equilibrium of the static game. Keywords: Collusion, Oligopoly, Competitive fringe, Bertrand, Nash Classification-JEL: D43, L1, L13 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.92 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-092.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.92 Title: Bidding and Performance in Repo Auctions: Evidence from ECB Open Market Operations Author-Name: Kjell G. Nyborg Author-X-Name-First: Kjell G. Author-X-Name-Last: Nyborg Author-WorkPlace-Name: UCLA Anderson School of Management Author-Name: Ulrich Bindseil Author-X-Name-First: Ulrich Author-X-Name-Last: Bindseil Author-WorkPlace-Name: European Central Bank Author-Name: Ilya A. Strebulaev Author-X-Name-First: Ilya A. Author-X-Name-Last: strebulaev Author-WorkPlace-Name: Stanford University, Graduate School of Business Abstract: Repo auctions are used to inject central bank funds against collateral into the banking sector. The ECB uses standard discriminatory auctions and hundreds of banks participate. The amount auctioned over the monthly reserve maintenance period is in principle exactly what banks collectively need to fulfil reserve requirements. We study bidder-level data and find: (i) Bidder behavior is different from what is documented for treasury auctions. Private information and the winner’s curse seem to be relatively unimportant. (ii) Underpricing is positively related to the difference between the interbank rate and the auction minimum bid rate, with the latter appearing to be a binding constraint. (iii) Bidders are more aggressive when the imbalance of awards in the previous auction is larger. (iv) Large bidders do better than small bidders. Some of our findings suggests that bidders are concerned with the loser’s nightmare and have limited amounts of the cheapest eligible collateral. Keywords: Repo auctions, Multiunit auctions, Reserve requirements, Loser’s nightmare, Money markets, Central bank, Collateral, Open market operations Classification-JEL: G21, G12, D44, E43, E50 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.93 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-093.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.93 Title: The Stability of the Adjusted and Unadjusted Environmental Kuznets Curve Author-Name: Leonardo Becchetti Author-X-Name-First: Leonardo Author-X-Name-Last: Becchetti Author-WorkPlace-Name: University of Rome Tor Vergata Author-Name: Sabrina Auci Author-X-Name-First: Sabrina Author-X-Name-Last: Auci Author-WorkPlace-Name: University of Rome Tor Vergata Abstract: In our paper, we test the stability of the unadjusted and adjusted Environmental Kuznets Curve (EKC). Our results provide evidence in favour of the significance of the adjusted EKC hypothesis in which the impact of per capita GDP on the intensity of CO2 emissions is evaluated conditionally to the effects of the energy-supply infrastructure and of additional socio-demographic variables. In this framework, the GDP-CO2 relationship appears robust to the inclusion of additional regressors and to changes in the estimation period and interval Keywords: Sustainable development, Kuznets curve, CO2 emissions Classification-JEL: Q53 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.94 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-094.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.94 Title: Assessing Climate Change Impacts: Agriculture Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Jian Zhang Author-X-Name-First: Jian Author-X-Name-Last: Zhang Author-WorkPlace-Name: EEE Program, Abdus Salam International Center of Theoretical Physics Abstract: The economy-wide implications of climate change on agricultural sectors in 2050 are estimated using a static computable general equilibrium model. Peculiar to this exercise is the coupling of the economic model with a climatic model forecasting temperature increase in the relevant year and with a crop-growth model estimating climate change impact on cereal productivity. The main results of the study point out on the one hand the limited influence of climate change on world food supply and welfare; on the other hand its important distributional consequences as the stronger negative effects are concentrated on developing countries. The simulation exercise is introduced by a survey of the relevant literature. Keywords: Climate change, Computable general equilibrium models, Agriculture Classification-JEL: D58, C68, N50, Q54 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.95 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-095.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.95 Title: Bargaining with Non-Monolithic Players Author-Name: Jean Christophe Pereau Author-X-Name-First: Jean Christophe Author-X-Name-Last: Pereau Author-WorkPlace-Name: Université de Marne-la-Vallée Author-Name: Alejandro Caparrós Author-X-Name-First: Alejandro Author-X-Name-Last: Caparrós Author-WorkPlace-Name: Spanish Council for Scientific Research (CSIC) and Institute of Economics and Geography (IEG) Author-Name: Tarik Tazdaït Author-X-Name-First: Tarik Author-X-Name-Last: Tazdaït Author-WorkPlace-Name: C.N.R.S - E.H.E.S.S - CIRED Abstract: This paper analyses strategic bargaining in negotiations between non-monolithic players, i.e. agents starting negotiations can split up in smaller entities during the bargaining process. We show that the possibility of scission in the informed coalition implies that it loses its information advantages. We also show that when the possibility of a scission exists the uninformed player does not focus on his or her beliefs about the strength of the informed coalition but on the proportion of weak/strong players within this coalition. Finally, our results show that the possibility of a scission reduces the incentives for the leader to propose a high offer to ensure a global agreement. We apply this framework to international negotiations on global public goods and to wage negotiations. Keywords: Strategic bargaining, Non-monolithic players, Scission, Noncooperative game-theory Classification-JEL: C72, D74, Q28 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.96 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-096.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.96 Title: Optimal Control and Spatial Heterogeneity: Pattern Formation in Economic-Ecological Models Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: University of Crete Author-Name: William Brock Author-X-Name-First: William Author-X-Name-Last: Brock Author-WorkPlace-Name: University of Wisconsin Abstract: This paper extends Turing analysis to standard recursive optimal control frameworks in economics and applies it to dynamic bioeconomic problems where the interaction of coupled economic and ecological dynamics under optimal control over space creates (or destroys) spatial heterogeneity. We show how our approach reduces the analysis to a tractable extension of linearization methods applied to the spatial analog of the well known costate/state dynamics. We explicitly show the existence of a non-empty Turing space of diffusive instability by developing a linear-quadratic approximation of the original non-linear problem. We apply our method to a bioeconomic problem, but the method has more general economic applications where spatial considerations and pattern formation are important. We believe that the extension of Turing analysis and the theory associated with the dispersion relationship to recursive infinite horizon optimal control settings is new. Keywords: Spatial analysis, Pattern formation, Turing mechanism, Turing space, Pontryagin’s principle, Bioeconomics Classification-JEL: Q2, C6 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.97 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-097.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.97 Title: Economy-Wide Estimates of the Implications of Climate Change: Human Health Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Roberto Roson Author-X-Name-First: Roberto Author-X-Name-Last: Roson Author-WorkPlace-Name: Ca’Foscari University of Venice and International Centre for Theoretical Physics Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: Hamburg University, Vrije Universiteit and Center for Integrated Study of the Human Dimensions of Global Change Abstract: We study the economic impacts of climate-change-induced change in human health, viz. cardiovascular and respiratory disorders, diarrhoea, malaria, dengue fever and schistosomiasis. Changes in morbidity and mortality are interpreted as changes in labour productivity and demand for health care, and used to shock the GTAP-E computable general equilibrium model, calibrated for the year 2050. GDP, welfare and investment fall (rise) in regions with net negative (positive) health impacts. Prices, production, and terms of trade show a mixed pattern. Direct cost estimates, common in climate change impact studies, underestimate the true welfare losses. Keywords: Impacts of climate change, Human health, Computable general equilibrium Classification-JEL: C68, D58, Q25 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.98 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-098.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.98 Title: Coalition Formation under Uncertainty: The Stability Likelihood of an International Climate Agreement Author-Name: Rob Dellink Author-X-Name-First: Rob Author-X-Name-Last: Dellink Author-WorkPlace-Name: Wageningen University Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Author-WorkPlace-Name: Institute of Economic Theory and University of Hagen Author-Name: Niels Olieman Author-X-Name-First: Niels Author-X-Name-Last: Olieman Author-WorkPlace-Name: Wageningen University Abstract: Results derived from empirical analyses on the stability of climate coalitions are usually very sensitive to the large uncertainties associated with the benefits and costs of climate policies. This paper provides the methodology of Stability Likelihood that links uncertainty about benefits and costs of climate change to the stability analysis of coalitions in a stochastic, empirical setting. We show that the concept of Stability Likelihood improves upon the robustness and interpretation of stability analysis. Our numerical application is based on a modified version of the climate model STACO. It turns out that the only non-trivial coalition structure with a relatively high Stability Likelihood (around 25 percent) is a coalition between the European Union and Japan, though quantitative results depend especially on the variance in regional benefits from abatement. Keywords: Climate change, Coalition formation, International environmental agreements, Uncertainty Classification-JEL: C79, H87, Q54 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.99 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-099.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.99 Title: Bargaining Coalitions in the Agricultural Negotiations of the Doha Round: Similarity of Interests or Strategic Choices? An Empirical Assessment Author-Name: Fabrizio De Filippis Author-X-Name-First: Fabrizio Author-X-Name-Last: De Filippis Author-WorkPlace-Name: University “Roma Tre” Author-Name: Valeria Costantini Author-X-Name-First: Valeria Author-X-Name-Last: Costantini Author-WorkPlace-Name: University “Roma Tre” Author-Name: Riccardo Crescenzi Author-X-Name-First: Riccardo Author-X-Name-Last: Crescenzi Author-WorkPlace-Name: University “Roma Tre” Author-Name: Luca Salvatici Author-X-Name-First: Luca Author-X-Name-Last: Salvatici Author-WorkPlace-Name: University of Molise Abstract: The paper aims at understanding the structural features of the bargaining coalitions in the Doha Round of the WTO. We provide an empirical assessment of the preferences of each negotiating actor looking at general economics indicators, development levels, structure of the agricultural sectors, and trade policies for agricultural products. Bargaining coalitions are analyzed by grouping countries through a cluster analysis procedure. The clusters are compared with existing coalitions, in order to assess their degree of internal homogeneity as well as their common interests. Such a comparison allows the detection of possible “defectors”, i.e. countries that according to their economic conditions and policies seem to be relatively less committed to the positions of the coalition they join. Keywords: Agricultural trade negotiations, Bargaining coalitions, WTO, Cluster analysis Classification-JEL: F13, Q17 Creation-Date: 200507 Template-Type: ReDIF-Paper 1.0 Number: 2005.100 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-100.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.100 Title: Econometric Models of Asymmetric Price Transmission Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei Author-Name: Giliola Frey Author-X-Name-First: Giliola Author-X-Name-Last: Frey Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: In this paper we review the existing empirical literature on price asymmetries in commodities, providing a way to classify and compare different studies which are highly heterogeneous in terms of econometric models, type of asymmetries and empirical findings. Relative to the previous literature, this paper is novel in several respects. First, it presents a detailed and updated survey of the existing empirical contributions on the existence of price asymmetries in the transmission mechanism linking input prices to output prices. Second, this paper presents an extension of the traditional distinction between long-run and short-run asymmetries to new categories of asymmetries, such as: contemporaneous impact, distributed lag effect, cumulated impact, reaction time, equilibrium and momentum equilibrium adjustment path, regime effect, regime equilibrium adjustment path. Third, each empirical study is critically discussed in the light of this new classification of asymmetries. Fourth, this paper evaluates the relative merits of the most popular econometric models for price asymmetries, namely autoregressive distributed lags, partial adjustments, error correction models, regime switching and vector autoregressive models. Keywords: Price asymmetries, Cointegration, Partial adjustment, Threshold regime switching Classification-JEL: C22, D40, Q40 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.101 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-101.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.101 Title: Oil Prices, Inflation and Interest Rates in a Structural Cointegrated VAR Model for the G-7 Countries Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei Author-Name: Alessandro Cologni Author-X-Name-First: Alessandro Author-X-Name-Last: Cologni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Sharp increases in the price of oil are generally seen as a major contributor to business cycle asymmetries. Moreover, the very recent highs registered in the world oil market are causing concern about possible slowdowns in the economic performance of the most developed countries. While several authors have considered the direct channels of transmission of energy price increases, other authors have argued that the economic downturns arose from the monetary policy response to the inflation presumably caused by oil price increases. In this paper a structural cointegrated VAR model has been considered for the G-7 countries in order to study the direct effects of oil price shocks on output and prices and the reaction of monetary variables to external shocks. Empirical analysis shows that, for most of the countries considered, there seems to be an impact of unexpected oil price shocks on interest rates, suggesting a contractionary monetary policy response directed to fight inflation. In turn, increases in interest rates are transmitted to real economy by reducing output growth and the inflation rate. Keywords: Oil price shocks, Monetary policy response, Structural VAR models Classification-JEL: E31, E32, E52, Q41 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.102 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-102.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.102 Title: Sustainability of Urban Sprawl: Environmental-Economic Indicators for the Analysis of Mobility Impact in Italy Author-Name: Chiara M. Travisi Author-X-Name-First: Chiara M. Author-X-Name-Last: Travisi Author-WorkPlace-Name: DIG, Politecnico di Milano Author-Name: Roberto Camagni Author-X-Name-First: Roberto Author-X-Name-Last: Camagni Author-WorkPlace-Name: DIG, Politecnico di Milano Abstract: Sound empirical and quantitative analysis on the relationship between different patterns of urban expansion and environmental or social costs of mobility are still very rare in Europe and the few studies available provide only a qualitative discussion on this. Recently, Camagni et al. (2002) have performed an empirical analysis on the metropolitan area of Milan, aimed at establishing whether different patterns of urban expansion generate different levels of land consumption and heterogeneous impacts of urban mobility. Results confirm the expectation that higher environmental impact of mobility is associated with more extensive and sprawling urban development, more recent urbanisation processes and residential specialisation. The present paper enlarges further the empirical analysis to seven Italian metropolitan areas (namely, Bari, Florence, Naples, Padua, Perugia, Potenza and Turin) to corroborate previous results for the Italian context. The novelty of the present paper is threefold. Firstly, we are interested in exploring the changes occurred to the intensity of the mobility impact across a ten-year period, from 1981 to 1991, corresponding to the Italian economic boom years. Secondly, using an econometric analysis in cross-section, we consider several metropolitan areas at once, being therefore able to explore whether there are significant differences in the way the model explains variations in the mobility impact across various Italian urban areas. Finally, we propose a conceptual interpretation of the causal chain in the explanation of the mobility impact intensity and we test it using Causal Path Analysis. Keywords: Urban mobility, Sprawl, Environmental sustainability, Collective costs Classification-JEL: Q56, R14, R41 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.103 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-103.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.103 Title: HIV/AIDS Pandemic in Africa: Trends and Challenges Author-Name: Livingstone S. Luboobi Author-X-Name-First: Livingstone S. Author-X-Name-Last: Luboobi Author-WorkPlace-Name: Makerere University Author-Name: Joseph Y.T. Mugisha Author-X-Name-First: Joseph Y.T. Author-X-Name-Last: Mugisha Author-WorkPlace-Name: Makerere University Abstract: Three-quarters of the world’s AIDS population lives in Sub-Saharan Africa; most have no access to lifesaving drugs, testing facilities or even basic preventative health care. One of the major factors inhibiting medical professionals in Africa from treating this disease is the inability to access vast areas of the continent with adequately equipped medical facilities. To meet this need, Architecture for Humanity challenged the world’s architects and health care professionals to submit designs for a mobile HIV/AIDS health clinic. The pandemic is changing the demographic structure of Africa and wiping out life expectancy gains. Indeed, in many African countries, life expectancy is dropping from more than 60 years to around 45 years or even less. In this paper, we highlight the uniqueness of factors associated with HIV/AIDS pandemic in Africa and present its impact and challenges. Keywords: HIV/AIDS, Africa Classification-JEL: I18, J11 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.104 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-104.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.104 Title: Was It Something I Ate? Implementation of the FDA Seafood HACCP Program Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland Author-Name: Erik Lichtenberg Author-X-Name-First: Erik Author-X-Name-Last: Lichtenberg Author-WorkPlace-Name: University of Maryland Author-Name: Dominic Mancini Author-X-Name-First: Dominic Author-X-Name-Last: Mancini Author-WorkPlace-Name: The U.S. Office of Management and Budget Author-Name: Gregmar I. Galinato Author-X-Name-First: Gregmar I. Author-X-Name-Last: Galinato Author-WorkPlace-Name: University of Maryland Abstract: We use FDA’s seafood inspection records to examine: (i) how FDA has targeted its inspections under HACCP regulation; (ii) the effects of FDA inspections on compliance with both HACCP and plant sanitation standards; and (iii) the relationship between HACCP regulations and pre-existing sanitation standards. We use a theoretical model of enforcement to derive hypotheses about FDA’s targeting of inspections and firms’ patterns of compliance. We test those hypotheses using econometric models of inspection and compliance. Contrary to the predictions of the theoretical model and to FDA’s own stated policies, FDA does not seem to have targeted inspections based on product risk or past compliance performance. Firms’ compliance strategies seemed to be broadly in accord with the predictions of the theoretical model. The threat of inspection increased the likelihood of compliance, although the deterrent effect was statistically significant for sanitation standards but not for HACCP. Firms tend to persist in compliance status, especially with respect to sanitation standards. Contrary to FDA’s presupposition, however, HACCP compliance does not improve compliance with sanitation standards, suggesting that the two are not complementary. Keywords: HACCP, Food safety, Seafood, Enforcement, Regulatory compliance, Regulation Classification-JEL: I18, K32 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.105 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-105.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.105 Title: Urban Environmental Health and Sensitive Populations: How Much are the Italians Willing to Pay to Reduce Their Risks? Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland Author-Name: Aline Chiabai Author-X-Name-First: Aline Author-X-Name-Last: Chiabai Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL figures that can be applied when estimating the benefits of heat advisories, other policies that reduce the mortality effects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollution—such as the elderly, those in compromised health, and those living alone and/or physically impaired—is different from that of other individuals. We find that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is “individuated.” Keywords: Contingent valuation, Willingness to Pay, Mortality risk reductions, Value of a Statistical life, Scope test, Cardiovascular and respiratory risks, Heat waves, Heat advisories, Adaptation to climate change, Air pollution, Premature mortality Classification-JEL: Q51, Q54 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.106 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-106.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.106 Title: Using Expert Judgment to Assess Adaptive Capacity to Climate Change: Evidence From a Conjoint Choice Survey Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland Author-Name: Aline Chiabai Author-X-Name-First: Aline Author-X-Name-Last: Chiabai Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Lucija Muehlenbachs Author-X-Name-First: Lucija Author-X-Name-Last: Muehlenbachs Author-WorkPlace-Name: AREC, University of Maryland Abstract: We use conjoint choice questions to ask public health and climate change experts, contacted at professional meetings in 2003 and 2004, which of two hypothetical countries, A or B, they deem to have the higher adaptive capacity to certain effects of climate change on human health. These hypothetical countries are described by a vector of seven attributes, including per capita income, inequality in the distribution of income, measures of the health status of the population, the health care system, and access to information. Probit models indicate that our respondents regard per capita income, inequality in the distribution of income, universal health care coverage, and high access to information as important determinants of adaptive capacity. A universal-coverage health care system and a high level of access to information are judged to be equivalent to $12,000-$14,000 in per capita income. We use the estimated coefficients and country sociodemographics to construct an index of adaptive capacity for several countries. In panel-data regressions, this index is a good predictor of mortality in climatic disasters, even after controlling for other determinants of sensitivity and exposure, and for per capita income. We conclude that our conjoint choice questions provide a novel and promising approach to eliciting expert judgments in the climate change arena. Keywords: Adaptive capacity, Climate change, Human health effects, Extreme events, Heat waves, Vector-borne illnesses, Conjoint choice, Vulnerability, Sensitivity Classification-JEL: Q54, I18 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.107 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-107.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.107 Title: Coordination in Networks Formation: Experimental Evidence on Learning and Salience Author-Name: Matteo Galizzi Author-X-Name-First: Matteo Author-X-Name-Last: Galizzi Author-WorkPlace-Name: Università di Brescia Author-Name: Michele Bernasconi Author-X-Name-First: Michele Author-X-Name-Last: Bernasconi Author-WorkPlace-Name: Università dell’Insubria Abstract: We present experiments on repeated non-cooperative network formation games, based on Bala and Goyal (2000). We treat the one-way and the two-ways flow models, each for high and low link costs. The models show both multiple equilibria and coordination problems. We conduct experiments under various conditions which control for salient labeling and learning dynamics. Contrary to previous experiments, we find that coordination on non-empty Strict Nash equilibria is not an easy task for subjects to achieve, even in the mono-directional model where the Strict Nash equilibria is a wheel. We find that salience significantly helps coordination, but only when subjects are pre-instructed to think of the wheel network as a reasonable way to play the networking game. Evidence on learning behavior provides support for subjects choosing strategies consistent with various learning rules, which include as the main ones Reinforcement and Fictitious Play. Keywords: Experiments, Networks, Behavioral game theory, Salience, Learning dynamics Classification-JEL: C92,C72,D83 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.108 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-108.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.108 Title: Migration Dynamics Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: University of Brescia Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Brescia Abstract: This paper tries to explain why most migration flows show some observable jumps in their processes, a phenomenon that seems to be sympathetic with the characteristic of irreversibility of migration. We present a real option model where the choice to migrate depends on both the differential wage between the host country and the country of origin, and on the probability of being fully integrated into the host country. The theoretical results show that the optimal migration decision of a single individual consists of waiting before migrating in a (coordinate) mass of individuals. The dimension of the migration flow depends on the behavioural characteristics of the ethnic groups: the more "sociable" they are, the larger the size of the wave and the lower the differential wage required. A second part of the paper is devoted to calibrating the model and simulating some migration flows to Italy in the last decade. The calibration is able to replicate the observable migration jumps in the short term. In particular, the calibrated model is able to conjecture the induced labour demand elasticity level of the host country and the behavioural rationale of the migrants. Keywords: Migration, Real Option, Labour Market, Network Effect Classification-JEL: F22, O15, R23 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.109 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-109.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.109 Title: Water Consumption and Long-Run Urban Development: The Case of Milan Author-Name: Mario Nosvelli Author-X-Name-First: Mario Author-X-Name-Last: Nosvelli Author-WorkPlace-Name: CERIS – DSE, CNR (National Research Council) Author-Name: Antonio Musolesi Author-X-Name-First: Antonio Author-X-Name-Last: Musolesi Author-WorkPlace-Name: CERIS – DSE, CNR (National Research Council) Abstract: Analyses of long run consumption series are rare in literature. We study the evolution of water consumption in Milan in the twentieth century. The objective is twofold: on one side, the univariate analysis tries both to assess the impact of relevant socio-economic and environmental changes on water consumption in Milan and verify if consumers have deeply rooted consumption habits. On the other side, the multivariate analysis is used to identify the socio-economic factors that are relevant in explaining consumption evolution. Results indicate both that water users have well entrenched consumption habits and that population, climate and economic structure behave more similarly, in Euclidean terms, to water consumption than to other economic and social variables. Keywords: Urban consumption, Long-run, Development, Environmental changes Classification-JEL: Q25, R1, C22, C19 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.110 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-110.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.110 Title: The Determinants of Individuals’ Attitudes Towards Preventing Environmental Damage Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: Leitner Program in International & Comparative Political Economy Author-Name: Maria A. Garcia-Valiñas Author-X-Name-First: Maria A. Author-X-Name-Last: Garcia-Valiñas Author-WorkPlace-Name: University of Oviedo Abstract: This paper investigates empirically the determinants of individuals’ attitudes towards preventing environmental damage in Spain using data from the World Values Survey and European Values Survey for the periods 1990, 1995 and 1999/2000. Compared to many previous studies, we present a richer set of independent variables and found that strongly neglected variables such as political interest and social capital have a strong impact on individuals’ preferences to prevent environmental damage. An interesting aspect in our study is the ability to investigate environmental preferences over time. The results show strong differences over time. Finally, using disaggregated data for Spanish regions, we also find significant regional differences. Keywords: Environment, Regional and time preferences, Political interest, Social capital Classification-JEL: Q260, R220, Z130, I210 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.111 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-111.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.111 Title: What are the Effects of Contamination Risks on Commercial and Industrial Properties? Evidence from Baltimore, Maryland Author-Name: Alberto Longo Author-X-Name-First: Alberto Author-X-Name-Last: Longo Author-WorkPlace-Name: University of Bath Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: AREC, University of Maryland and Fondazione Eni Enrico Mattei Abstract: Using the hedonic pricing approach, we investigate how the information released on public registries of contaminated and potentially contaminated sites affects nearby commercial and industrial properties in Baltimore, Maryland. We find that commercial and industrial properties are virtually unaffected by proximity to a site with a history of contamination. Knowing that the site is no longer considered contaminated does not have a rebound effect on property prices either. We also find that urban economic development policies, such as Empowerment Zones and Enterprise Zones, have little effect on property values. In sum, brownfield properties in Baltimore are not particularly attractive investments for developers, and there is little potential for self-sustaining cleanup based on appropriate fiscal incentives, such as Tax Increment Financing. It is doubtful that “one size fits all” measures to encourage the cleanup of contaminated sites can be successful in this context. Keywords: Contaminated sites registries, Distance to contaminated sites, Hedonic pricing model, Brownfields Classification-JEL: Q51, Q53, R33 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.112 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-112.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.112 Title: The Value of Cultural Heritage Sites in Armenia: Evidence from a Travel Cost Method Study Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland Author-Name: Alberto Longo Author-X-Name-First: Alberto Author-X-Name-Last: Longo Author-WorkPlace-Name: University of Bath Abstract: This paper applies the travel cost method to visits to cultural sites in Armenia by domestic visitors. Respondents intercepted at four cultural monuments provided information on their visitation patterns, experience at the site, perception of the state of conservation of the monuments, and rating of the quality of the services and infrastructures. We combine actual trips with stated trips under hypothetical programs that would enhance the conservation of the monuments and improve one of (i) the cultural experience at the site, (ii) the quality of the infrastructure, or (iii) the quality of the services, and use the combined actual and stated trips to fit a panel data model. Our investigation shows that that there are significant use values associated with the four study monuments, and that conservation programs and initiatives that improve the cultural experience, or simply make it easier for the respondent to reach and spend time at the monument, are valued by domestic visitors and would encourage higher visitation rates. Keywords: Valuation of cultural heritage sites, Non-market valuation, Travel cost, Consumer surplus, Contingent behavior Classification-JEL: Z10 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.113 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-113.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.113 Title: Impact of Climate Policy on the Basque Economy Author-Name: Mikel González Author-X-Name-First: Mikel Author-X-Name-Last: González Author-WorkPlace-Name: University of Basque Country Author-Name: Rob Dellink Author-X-Name-First: Rob Author-X-Name-Last: Dellink Author-WorkPlace-Name: Wageningen University Abstract: In this paper we analyze the economic effects of CO2 emission reductions in the Basque Country (Spain) using an applied general equilibrium (AGE) model with specific attention to environment-energy-economy interactions. Environmental policy is implemented through a system of tradable pollution permits that the government auctions. The costs of different levels of CO2 abatement are discussed, focusing on the variations of macroeconomic, sectoral and environment-energy variables. Results show that the costs for achieving the Kyoto targets can remain limited if the appropriate combination of changes in fuel-mix and restructuring of the economy is induced. Keywords: Applied general equilibrium, Climate change, Tradable pollution permits, Basque country Classification-JEL: D58, H21, Q20, Q48 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.114 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-114.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.114 Title: Optimal Soil Management and Environmental Policy Author-Name: Gilles Lafforgue Author-X-Name-First: Gilles Author-X-Name-Last: Lafforgue Author-WorkPlace-Name: Institut National d’Horticulture Author-Name: Walid Oueslati Author-X-Name-First: Walid Author-X-Name-Last: Oueslati Author-WorkPlace-Name: Institut National d’Horticulture Abstract: This paper studies the effects of environmental policy on the farmer’s soil optimal management. We consider a dynamic economic model of soil erosion where the intensity use of inputs allows the farmer to control soil losses. Therefore, inputs use induces a pollution which is accentuated by the soil fragility. We show, at the steady state, that the environmental tax induces a more conservative farmer behavior for soil, but in some cases it can exacerbate pollution. These effects can be moderated when farmers introduce abatement activity. Keywords: Soil erosion, Pollution, Environmental policy, Optimal soil conservation, Abatement activities Classification-JEL: Q12, Q24, Q28, Q52, H23 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.115 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-115.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.115 Title: Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary Author-Name: Martin D. Smith Author-X-Name-First: Martin D. Author-X-Name-Last: Smith Author-WorkPlace-Name: Duke University Author-Name: Larry B. Crowder Author-X-Name-First: Larry B. Author-X-Name-Last: Crowder Author-WorkPlace-Name: Nicholas School of the Environment and Earth Sciences, Duke University Marine Lab Abstract: Valuing ecosystem services with microeconomic underpinnings presents challenges because these services typically constitute nonmarket values and contribute to human welfare indirectly through a series of ecological pathways that are dynamic, nonlinear, and difficult to quantify and link to appropriate economic spatial and temporal scales. This paper develops and demonstrates a method to value a portion of ecosystem services when a commercial fishery is dependent on the quality of estuarine habitat. Using a lumped-parameter, dynamic open access bioeconomic model that is spatially explicit and includes predator-prey interactions, this paper quantifies part of the value of improved ecosystem function in the Neuse River Estuary when nutrient pollution is reduced. Specifically, it traces the effects of nitrogen loading on the North Carolina commercial blue crab fishery by modeling the response of primary production and the subsequent impact on hypoxia (low dissolved oxygen). Hypoxia, in turn, affects blue crabs and their preferred prey. The discounted present value fishery rent increase from a 30% reduction in nitrogen loadings in the Neuse is $2.56 million, though this welfare estimate is fairly sensitive to some parameter values. Surprisingly, this number is not sensitive to initial conditions. Keywords: Open access, Predator-prey, Hypoxia, Habitat-dependent fisheries Classification-JEL: Q22 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.116 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-116.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.116 Title: Protecting Marine Biodiversity: A Comparison of Individual Habitat Quotas (IHQs) and Marine Protected Areas Author-Name: Kurt Schnier Author-X-Name-First: Kurt Author-X-Name-Last: Schnier Author-WorkPlace-Name: University of Rhode Island Author-Name: Dan Holland Author-X-Name-First: Dan Author-X-Name-Last: Holland Author-WorkPlace-Name: Gulf of Maine Research Institute Abstract: Fisheries managers in the United States are required to identify and mitigate the adverse impacts of fishing activity on essential fish habitat (EFH). There are additional concerns that the viability of noncommercial species, animals that are habitat dependent and/or are themselves constituents of fishery habitat may still be threatened. We consider a cap-and-trade system for habitat conservation, individual habitat quotas for fisheries, to achieve habitat conservation and species protection goals cost effectively. Individual quotas of habitat impact units (HIUs) would be distributed to fishers with an aggregate quota set to maintain a target habitat “stock” of EFH conservation. Using a dynamic, spatially explicit fishery simulation model we explore the efficiency and cost effectiveness of an IHQ policy versus alternative marine protected area (MPA) configurations, at reducing the risk of extinguishing a habitat dependent species of unknown spatial distribution. Our findings indicate that an IHQ policy with a conservatively established habitat target is better suited to the protection of non-target species than a rotating or fixed MPA policy. Keywords: Fisheries management, Individual transferable quota, ITQ, Individual habitat quota, IHQ, Essential fish habitat, EFH, Marine protected areas, MPA, Non-target species Classification-JEL: Q20, Q22 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.117 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-117.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.117 Title: The Evolution of Enterprise Reform in Africa: From State-owned Enterprises to Private Participation in Infrastructure — and Back? Author-Name: John Nellis Author-X-Name-First: John Author-X-Name-Last: Nellis Author-WorkPlace-Name: The Center for Global Development Abstract: Many African state-owned enterprises (SOEs), particularly those in infrastructure, have a long history of poor performance. From the outset, SOE financial and economic performance generally failed to meet the expectations of their creators and funders. By the late 1970s, the situation was alarming, and by early 1980s, critical. The poor financial performance of SOEs became so burdensome to government budgets that it attracted the attention of the international financial institutions, or IFIs. In response, in the 1980s, the World Bank approved SOE reforms that could be summed up in the term “commercialization”. By the mid-1990s, however, the idea of making SOEs function efficiently and effectively under government management was largely abandoned by the IFIs and privatization and private participation in infrastructure, or PPI became the order of the day. Once more, however, the results were disappointing. PPI has not been as widely adopted as anticipated, nor has it generated the massive resources and changes hoped for, nor has it been widely accepted as beneficial by the African public. The findings of recent studies in Africa suggest that PPI should not be jettisoned, and that the more productive path is to recognize the limitations of the approach, and to work harder at creating the conditions needed to make it function effectively. This will entail, as many have recognized, an end to the view that public and private infrastructure provision is a dichotomy – a case of either-or, one or the other – and a better appreciation of the extent to which the performance of each is dependent on the competence of the other. In other words, for the private sector to perform well, public sector capacity must be enhanced. Moreover, proposed tactics of reform should fit more closely with the expectations and sentiments of the affected government, consumer base, and general population. This broader approach implies, probably, a reduction in the scope and, certainly, a reduction in the planned speed of operations. Improving infrastructure performance is a long-term matter. Keywords: Africa, Enterprise reform, State-owned enterprises, Privatization Classification-JEL: F3, L3, N17, N27, N47, N77, O55 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.118 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-118.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.118 Title: Italy’s Privatization Process and Its Implications for China Author-Name: Bernardo Bortolotti Author-X-Name-First: Bernardo Author-X-Name-Last: Bortolotti Author-WorkPlace-Name: University of Turin and Fondazione Eni Enrico Mattei Abstract: This report provides an overview of the causes and consequences of the Italian State-owned Enterprises (SOE) reform process. Particularly, it analyzes the symbiotic link between share issue privatization (SIP), i.e. privatization in public equity markets, and financial market development, and shows how the sustained policy of sales has jumpstarted the Italian domestic stock market. Based on the Italian and international experience, the report provides some possible guidelines and policy recommendations in order to achieve the same goal in the People’s Republic of China (PRC). Keywords: State-owned enterprises, Share issue privatization, Financial development, Italy, China Classification-JEL: L33, L30, O16, G14 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.119 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/ndl2005-119.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.119 Title: Detecting Starting Point Bias in Dichotomous-Choice Contingent Valuation Surveys Author-Name: Marcella Veronesi Author-X-Name-First: Marcella Author-X-Name-Last: Veronesi Author-WorkPlace-Name: University of Maryland Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland and Fondazione Eni Enrico Mattei Author-Name: Joseph C. Cooper Author-X-Name-First: Joseph C. Author-X-Name-Last: Cooper Author-WorkPlace-Name: The Resource and Rural Economics Division, Economic Research Service Abstract: We examine starting point bias in CV surveys with dichotomous choice payment questions and follow-ups, and double-bounded models of the WTP responses. We wish to investigate (1) the seriousness of the biases for the location and scale parameters of WTP in the presence of starting point bias; (2) whether or not these biases depend on the distribution of WTP and on the bids used; and (3) how well a commonly used diagnostic for starting point bias—a test of the null that bid set dummies entered in the right-hand side of the WTP model are jointly equal to zero—performs under various circumstances. Because starting point bias cannot be separately identified in any reliable manner from biases caused by model specification, we use simulation approaches to address this issue. Our Monte Carlo simulations suggest that the effect of ignoring starting point bias is complex and depends on the true distribution of WTP. Bid set dummies tend to soak up misspecifications in the distribution assumed by the researcher for the latent WTP, rather than capturing the presence of starting point bias. Their power in detecting starting point bias is low. Keywords: Anchoring, Dichotomous choice contingent valuation, Starting point bias, Double-bounded models, Estimation bias Classification-JEL: Q51 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.120 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-120.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.120 Title: A Solution to Matching with Preferences over Colleagues Author-Name: Federico Echenique Author-X-Name-First: Federico Author-X-Name-Last: Echenique Author-WorkPlace-Name: California Institute of Technology Author-Name: Mehmet B. Yenmez Author-X-Name-First: Mehmet B. Author-X-Name-Last: Yenmez Author-WorkPlace-Name: California Institute of Technology Abstract: We study many-to-one matchings, such as the assignment of students to colleges, where the students have preferences over the other students who would attend the same college. It is well known that the core of this model may be empty, without strong assumptions on agents' preferences. We introduce a method that finds all core matchings, if any exist. The method requires no assumptions on preferences. Our method also finds certain partial solutions that may be useful when the core is empty. Keywords: Matching markets, Core, Lattice, Gale-Shapley algorithm Classification-JEL: C65, C78 Creation-Date: 200509 Template-Type: ReDIF-Paper 1.0 Number: 2005.121 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-121.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.121 Title: Dissipation of Knowledge and the Boundaries of the Multinational Enterprise Author-Name: Valeria Gattai Author-X-Name-First: Valeria Author-X-Name-Last: Gattai Author-WorkPlace-Name: Bocconi University and ISESAO Abstract: This paper provides a theoretical formalisation of the joint-venture contract, as an alternative to Foreign Direct Investment (FDI), within a Dissipation of Intangible Assets framework. In a two-period model, we discuss how the threat of knowledge spillover shapes the boundaries of a Multinational Enterprise. Similarly to the theoretical findings on the FDI-licensing trade off, we show that the integrated solution is more likely to emerge when know-how easily spills over – i.e. when firms are endowed with more Intangible Assets or they belong to high tech industries. Probit estimates, from a new firm-level dataset, show that Japanese manufacturing operations in Europe are in line with these predictions. Keywords: Dissipation, Intangible assets, FDI, joint-venture, Internalisation, Japan Classification-JEL: F23, C25, O5 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.122 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-122.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.122 Title: Firm’s Intangible Assets and Multinational Activity: Joint-Venture Versus FDI Author-Name: Valeria Gattai Author-X-Name-First: Valeria Author-X-Name-Last: Gattai Author-WorkPlace-Name: Bocconi University and ISESAO Abstract: This paper provides a theoretical formalisation of the joint-venture contract, as an alternative to Foreign Direct Investment (FDI), within a Dissipation of Intangible Assets framework. In a two-period, two-country equilibrium model, we discuss how the threat of knowledge spillover shapes the boundaries of a Multinational Enterprise. Similarly to the theoretical findings on the FDI-licensing trade off, we show that Foreign Direct Investment is more likely to emerge when know-how easily spills over – i.e. when firms are endowed with more intangible assets or they belong to high tech industries. Probit estimates, from an entirely new firm-level dataset, constructed by the author, show that the experience of Italian multinationals in Asia is in line with our theoretical predictions. Keywords: Intangible assets, Internalisation, FDI, Joint-venture, Asia Classification-JEL: F23, C25, O5 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.123 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-123.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.123 Title: A MERGE Model with Endogenous Technological Change and the Cost of Carbon Stabilization Author-Name: Socrates Kypreos Author-X-Name-First: Socrates Author-X-Name-Last: Kypreos Author-WorkPlace-Name: Paul Scherrer Institute Abstract: Two stylized backstop systems with endogenous technological learning formulations (ETL) are introduced in MERGE: one for the electric and the other for the non-electric markets. Then the model is applied to analyze the impacts of ETL on carbon-mitigation policy, contrasting the resulting impacts with the situation without learning. As the model considers endogenous technological change in the energy sector only some exogenous key parameters defining the production function are varied together with the assumed learning rates to check the robustness of our results. Based on model estimations and the sensitivity analyses we conclude that increased commitments for the development of new technologies to advance along their learning curves has a potential for substantial reductions in the cost of climate mitigation helping to reach safe concentrations of carbon in the atmosphere. Keywords: Climate change stabilization policies, Non-linear optimization, Induced technological change, Energy and macroeconomy Classification-JEL: C61, O30, Q42, Q43 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.124 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-124.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.124 Title: Analysis of Technological Portfolios for CO2 stabilizations and Effects of Technological Changes Author-Name: Fuminori Sano Author-X-Name-First: Fuminori Author-X-Name-Last: Sano Author-WorkPlace-Name: Research Institute of Innovative Technology for the Earth Author-Name: Keigo Akimoto Author-X-Name-First: Keigo Author-X-Name-Last: Akimoto Author-WorkPlace-Name: Research Institute of Innovative Technology for the Earth Author-Name: Takashi Homma Author-X-Name-First: Takashi Author-X-Name-Last: Homma Author-WorkPlace-Name: Research Institute of Innovative Technology for the Earth Author-Name: Toshimasa Tomoda Author-X-Name-First: Toshimasa Author-X-Name-Last: Tomoda Author-WorkPlace-Name: Research Institute of Innovative Technology for the Earth Abstract: In this study, cost-effective technological options to stabilize CO2 concentrations at 550, 500, and 450 ppmv are evaluated using a world energy systems model of linear programming with a high regional resolution. This model treats technological change endogenously for wind power, photovoltaics, and fuel-cell vehicles, which are technologies of mass production and are considered to follow the “learning by doing” process. Technological changes induced by climate policies are evaluated by maintaining the technological changes at the levels of the base case wherein there is no climate policy. The results achieved through model analyses include 1) cost-effective technological portfolios, including carbon capture and storage, marginal CO2 reduction costs, and increases in energy system cost for three levels of stabilization and 2) the effect of the induced technological change on the above mentioned factors. A sensitivity analysis is conducted with respect to the learning rate. Keywords: Energy systems model, Global warming, Technological portfolios, Technological changes Classification-JEL: C61, O33, Q41, Q42 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.125 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-125.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.125 Title: Induced Technological Change in a Limited Foresight Optimization Model Author-Name: Fredrik Hedenus Author-X-Name-First: Fredrik Author-X-Name-Last: Hedenus Author-WorkPlace-Name: Chalmers University Author-Name: Christian Azar Author-X-Name-First: Christian Author-X-Name-Last: Azar Author-WorkPlace-Name: Chalmers University Author-Name: Kristian Lindgren Author-X-Name-First: Kristian Author-X-Name-Last: Lindgren Author-WorkPlace-Name: Chalmers University Abstract: The threat of global warming calls for a major transformation of the energy system the coming century. Modeling technological change is an important factor in energy systems modeling. Technological change may be treated as induced by climate policy or as exogenous. We investigate the importance of induced technological change (ITC) in GET-LFL, an iterative optimization model with limited foresight that includes learning-by-doing. Scenarios for stabilization of atmospheric CO2 concentrations at 400, 450, 500 and 550 ppm are studied. We find that the introduction of ITC reduces the total net present value of the abatement cost over this century by 3-9% compared to a case where technological learning is exogenous. Technology specific polices which force the introduction of fuel cell cars and solar PV in combination with ITC reduce the costs further by 4-7% and lead to significantly different technological solutions in different sectors, primarily in the transport sector. Keywords: Energy system model, Limited foresight, Climate policy, Endougenous learning, Technological lock-in Classification-JEL: O33 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.126 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-126.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.126 Title: The Value of ITC under Climate Stabilization Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: IVM/VU Abstract: We assess the effect of ITC in a global growth model, DEMETER-1CCS, with learning by doing where energy savings, an energy transition, and carbon capturing and sequestration (CCS) are the main options for emissions reductions. The model accounts for technology based on learning by doing embodied in capital installed in previous periods. We have run five scenarios, one baseline scenario in which climate change policy is assumed absent, and four stabilization scenarios in which atmospheric CO2 concentrations are stabilized at 550, 500, 450, and 400 ppmv. We find that the timing of emission reductions and the investment strategy is relatively independent of the endogeneity of technological change. The vintages structure of production is more important. But ITC reduces costs by about factor 2, though these benefits only materialize after some decades. Keywords: Energy, Carbon taxes, Endogenous technological change, Niche markets Classification-JEL: Q43, Q54, Q55 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.127 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-127.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.127 Title: Privatization in Africa: What has happened? What is to be done? Author-Name: John Nellis Author-X-Name-First: John Author-X-Name-Last: Nellis Author-WorkPlace-Name: The Center for Global Development Abstract: Sub-Saharan African states urgently need expanded and more dynamic private sectors, more efficient and effective infrastructure/utility provision, and increased investment from both domestic and foreign sources. Privatization is one way to address these problems. But African states have generally been slow and reluctant privatizers; a good percentage of industrial/manufacturing and most infrastructure still remains in state hands. Given prevailing public hostility towards privatization, and widespread institutional weaknesses, such caution is defensible, but nonetheless very costly. The long-run and difficult solution is the creation and reinforcement of the institutions that underpin and guide proper market operations. In the interim, African governments and donors have little choice but to continue to experiment with the use of externally supplied substitutes for gaps in local regulatory and legal systems. Keywords: Privatization, Sub-Saharan Africa Classification-JEL: F3, L3, N17, N27, N47, N77, O55 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.128 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-128.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.128 Title: Contest with Attack and Defence: Does Negative Campaigning Increase or Decrease Voters’ Turnout? Author-Name: Raphaël Soubeyran Author-X-Name-First: Raphaël Author-X-Name-Last: Soubeyran Author-WorkPlace-Name: GREQAM Université de la Mediterrannée Abstract: We present a general model of two players contest with two types of efforts. Contrary to the classical models of contest, where each player chooses a unique effort, and where the outcome depends on the efforts of all the players, contestants are allowed to reduce the effort of the opponent. Defence increases one’s chance of winning while attack annihilates the defence of the opponent. This model has many applications like political campaigning, wars, competition among lobbies, job promotion competitions, or sport contests. We study the general model of contest with attacks and defence and propose an application to negative political campaigns, where two candidates arbitrate between disparaging their opponent or enhancing their own image. We propose sufficient conditions for the existence and uniqueness of a symmetric Nash equilibrium of the contest game. In the application, we contribute to the empirically debated question dealing with the effect of attack on voters turnout, and show that the conclusion depends on the distribution of voters sensitivity to defence and attack. Furthermore, contrary to the literature, we show that an underdog candidate may be less aggressive than his opponent. Keywords: Contest, Rent-seeking, Sabotage, Negative campaigning, Turnout Classification-JEL: D74, D72, C72 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.129 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-129.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.129 Title: Political Cycles : The Opposition Advantage Author-Name: Pascal Gautier Author-X-Name-First: Pascal Author-X-Name-Last: Gautier Author-WorkPlace-Name: GREQAM, Université d’Aix-Marseille II Author-Name: Raphael Soubeyran Author-X-Name-First: Raphael Author-X-Name-Last: Soubeyran Author-WorkPlace-Name: GREQAM, Université d’Aix-Marseille II Abstract: We propose a two dimensional infinite horizon model of public consumption in which investments are decided by a winner-take-all election. Investments in the two public goods create a linkage across periods and parties have different specialities. We show that the incumbent party vote share decreases the longer it stays in power. Parties chances of winning do not converge and, when the median voter is moderate enough, no party can maintain itself in power for ever. Finally, the more parties are specialized and the more public policies have long-term effects, the more political cycles are likely to occur. Keywords: Cycles, Alternation, Public goods, Advantage, Opposition Classification-JEL: D72, H41, C72 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.130 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-130.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.130 Title: Dynamic Controllability with Overlapping targets: A Generalization of the Tinbergen-Nash Theory of Economic Policy Author-Name: Giovanni Di Bartolomeo Author-X-Name-First: Giovanni Author-X-Name-Last: Di Bartolomeo Author-WorkPlace-Name: Univeristy of Rome I and University of Teramo Author-Name: Nicola Acocella Author-X-Name-First: Nicola Author-X-Name-Last: Acocella Author-WorkPlace-Name: University of Rome I Author-Name: Andrew Hughes Hallett Author-X-Name-First: Andrew Author-X-Name-Last: Hughes Hallett Author-WorkPlace-Name: Vanderbilt University and CEPR Abstract: We generalize some recent results developed in static policy games with multiple players, to a dynamic context. We find that the classical theory of economic policy can be usefully applied to a strategic context of difference games: if one player satisfies the Golden Rule, then either all other players’ policies are ineffective with respect to the dynamic target variables shared with that player; or no Nash Feedback Equilibrium can exist, unless they all share target values for those variables. We extend those results to the case where there are also non-dynamic targets, to show that policy effectiveness (a Nash equilibrium) can continue to exist if some players satisfy the Golden Rule but target values differ between players in the non-dynamic targets. We demonstrate the practical importance of these results by showing how policy effectiveness (a policy equilibrium) can appear or disappear with small variations in the expectations process or policy rule in a widely used model of monetary policy. Keywords: Policy games, Policy ineffectiveness, Static controllability, Existence of equilibria, Nash feedback equilibrium Classification-JEL: C72, E52, E61 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.131 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-131.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.131 Title: Institutional Explanations of Economic Development: the Role of Precious Metals Author-Name: Elissaios Papyrakis Author-X-Name-First: Elissaios Author-X-Name-Last: Papyrakis Author-WorkPlace-Name: IVM, Vrije Universiteit Author-Name: Reyer Gerlagh Author-X-Name-First: Reyer Author-X-Name-Last: Gerlagh Author-WorkPlace-Name: IVM, Vrije Universiteit Abstract: Recent research has emphasized the influence of colonization on the institutional development and economic performance in former European colonies. Where European colonizers settled, they replicated the investment-conducive institutions found at home. It has been argued that a harsh disease environment and a highly urbanized native population worked against colonization. We show evidence for another significant element explaining the endogenous character of colonization strategies and the formation of institutions. We find the presence of precious metals, gold and silver, to imply an increase in settlements, and an improvement in institutional quality, even when correcting for settlements. Highly valued gold and silver reserves attracted Europeans in large numbers and resulted in an institutional upgrade of mineral-rich areas. Keywords: Precious metals, Institutions, Economic development Classification-JEL: O13, O17, Q33 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.132 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-132.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.132 Title: Tinbergen and Theil Meet Nash: Controllability in Policy Games Author-Name: Giovanni Di Bartolomeo Author-X-Name-First: Giovanni Author-X-Name-Last: Di Bartolomeo Author-WorkPlace-Name: University of Rome I Author-Name: Nicola Acocella Author-X-Name-First: Nicola Author-X-Name-Last: Acocella Author-WorkPlace-Name: University of Rome I Abstract: This paper generalizes the classical theory of economic policy to a static LQ-strategic context between n players. We show how this generalized version of controllability can profitably be used to deal with policy ineffectiveness issues and Nash equilibrium existence. Keywords: Policy games, policy ineffectiveness, static controllability, Nash equilibrium existence Classification-JEL: C72, E52, E61 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.133 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-133.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.133 Title: Multi-Product Crops for Agricultural and Energy Production – an AGE Analysis for Poland Author-Name: Adriana Ignaciuk Author-X-Name-First: Adriana Author-X-Name-Last: Ignaciuk Author-WorkPlace-Name: Wageningen University Author-Name: Rob B. Dellink Author-X-Name-First: Rob B. Author-X-Name-Last: Dellink Author-WorkPlace-Name: Wageningen University Abstract: By-products from agriculture and forestry can contribute to production of clean and cheap (bio)electricity. To assess the role of such multi-product crops in the response to climate policies, we present an applied general equilibrium model with special attention to biomass and multi-product crops for Poland. The potential to boost production of bioelectricity through the use of multi-product crops turns out to be limited to only 2-3% of total electricity production. Further expansion of the bioelectricity sector will have to be based on biomass crops explicitly grown for energy purposes. The competition between agriculture and biomass for scarce land remains limited, given the availability of relatively poor land types and substitution possibilities. The importance of indirect effects illustrates that the AGE framework is appropriate. Keywords: Applied general equilibrium (AGE), Biomass, Energy policy, Renewable energy Classification-JEL: D58, H23, Q28, Q42 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.134 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-134.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.134 Title: Restructuring Italian Utility Markets: Household Distributional Effects Author-Name: Paola Valbonesi Author-X-Name-First: Paola Author-X-Name-Last: Valbonesi Author-WorkPlace-Name: Università di Padova Author-Name: Raffaele Miniaci Author-X-Name-First: Raffaele Author-X-Name-Last: Miniaci Author-WorkPlace-Name: Università di Padova Author-Name: Carlo Scarpa Author-X-Name-First: Carlo Author-X-Name-Last: Scarpa Author-WorkPlace-Name: Università di Brescia Abstract: Competition in public utility sectors has been encouraged in recent years throughout Europe. In this paper we try and analyse the welfare effects of these reforms in Italy, with particular attention to water and energy goods. The first step is to introduce a sensible measure of affordability of public utilities and to see how many households fall below a critical threshold. This issue is analysed stressing how climatic conditions dramatically affect households’ expenditure and how the affordability of utility bills varies a lot from region to region. So far, utilities’ reforms do not seem to have produced negative effects on the weaker group of households. Keywords: Consumer behaviour, Public utilities, Regulation, Gas, Electricity, Water Classification-JEL: D12, L51, L97 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.135 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-135.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.135 Title: The Impact of Speed Limits on Recreational Boating in the Lagoon of Venice Author-Name: Valentina Zanatta Author-X-Name-First: Valentina Author-X-Name-Last: Zanatta Author-WorkPlace-Name: DICAS - Politecnico di Torino Author-Name: Paolo Rosato Author-X-Name-First: Paolo Author-X-Name-Last: Rosato Author-WorkPlace-Name: Università di Trieste and Fondazione Eni Enrico Mattei Abstract: Speed limits were introduced in the Lagoon of Venice in 2002 to reduce wave motion, which damages environmentally sensitive areas in the broader Lagoon as well as buildings in the city of Venice. In this paper, we estimate the welfare losses experienced by recreational boaters as a result of the speed limits. We fit a single-site travel cost model to a sample of boaters intercepted as they depart from or arrive to marinas and launching ramps on the Lagoon. Our Poisson model is corrected for truncation and endogenous stratification. We construct three measures of the price per trip, which allow us to check the sensitivity of models and welfare estimates to possible measurement errors in the opportunity cost of time. Our results are robust to the measure of price used and conservatively peg the welfare losses of boaters to €7.7-9.6 million per year. Even under conservative assumptions, the welfare losses of boaters are sufficiently large that, given current monitoring and enforcement of the speed limits, we believe there is a strong incentive for boaters to disregard the limits. Keywords: Travel cost method, Single-site model, Speed limits, Natural resources management Classification-JEL: Q26, Q28 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.136 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-136.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.136 Title: Tourism, Jobs, Capital Accumulation and the Economy: A Dynamic Analysis Author-Name: Pasquale M. Sgro Author-X-Name-First: Pasquale M. Author-X-Name-Last: Sgro Author-WorkPlace-Name: Deakin University Author-Name: Chi-Chur Chao Author-X-Name-First: Chi-Chur Author-X-Name-Last: Chao Author-WorkPlace-Name: Deakin University and Chinese University of Hong Kong Author-Name: Bharat R. Hazari Author-X-Name-First: Bharat R. Author-X-Name-Last: Hazari Author-WorkPlace-Name: Deakin University and CEPREMAP Author-Name: Jean-Pierre Laffargue Author-X-Name-First: Jean-Pierre Author-X-Name-Last: Laffargue Author-WorkPlace-Name: CEPREMAP Author-Name: Eden S. H. Yu Author-X-Name-First: Eden S. H. Author-X-Name-Last: Yu Author-WorkPlace-Name: City University of Hong Kong Abstract: This paper examines the effects of tourism in a dynamic model of trade on unemployment, capital accumulation and resident welfare. A tourism boom improves the terms of trade, increases labor employment, but lowers capital accumulation. The reduction in the capital stock depends on the degree of factor intensity. When the traded sector is weakly capital intensive, the expansion of tourism improves welfare. However, when the traded sector is strongly capital intensive, the fall in capital can be a dominant factor in lowering national welfare. This dynamic immiserizing result of tourism on resident welfare is confirmed by simulations on German data. Keywords: Tourism, Employment, Capital accumulation, Welfare Classification-JEL: O10, F11 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.137 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-137.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.137 Title: Risk Management of Daily Tourist Tax Revenues for the Maldives Author-Name: Michael McAleer Author-X-Name-First: Michael Author-X-Name-Last: McAleer Author-WorkPlace-Name: University of Western Australia Author-Name: Riaz Shareef Author-X-Name-First: Riaz Author-X-Name-Last: Shareef Author-WorkPlace-Name: University of Western Australia Author-Name: Bernardo da Veiga Author-X-Name-First: Bernardo Author-X-Name-Last: da Veiga Author-WorkPlace-Name: University of Western Australia Abstract: International tourism is the principal economic activity for Small Island Tourism Economies (SITEs). There is a strongly predictable component of international tourism, specifically the government revenue received from taxes on international tourists, but it is difficult to predict the number of international tourist arrivals which, in turn, determines the magnitude of tax revenue receipts. A framework is presented for risk management of daily tourist tax revenues for the Maldives, which is a unique SITE because it relies entirely on tourism for its economic and social development. As these receipts from international tourism are significant financial assets to the economies of SITEs, the time-varying volatility of international tourist arrivals and their growth rate is analogous to the volatility (or dynamic risk) in financial returns. In this paper, the volatility in the levels and growth rates of daily international tourist arrivals is investigated. Keywords: Small Island Tourism Economies (SITEs), International tourist arrivals, Tourism tax, Volatility, Risk, Value-at-Risk (VaR), Sustainable Tourism-@-Risk (ST@R) Classification-JEL: G18, C32, L83, D81 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.138 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-138.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.138 Title: The Economics of Local Tourist Systems Author-Name: Guido Candela Author-X-Name-First: Guido Author-X-Name-Last: Candela Author-WorkPlace-Name: University of Bologna Author-Name: Paolo Figini Author-X-Name-First: Paolo Author-X-Name-Last: Figini Author-WorkPlace-Name: University of Bologna Author-Name: Antonello E. Scorcu Author-X-Name-First: Antonello E. Author-X-Name-Last: Scorcu Author-WorkPlace-Name: University of Bologna Abstract: In this paper we analyse the Local Tourist System (LTS) as a particular case of Marshallian Industrial District. The LTS allows the identification of more effective policy tools for managing tourism. First, through the concept of LTS, the policy maker can take into account the complexity of tourism, characterised by a strong heterogeneity of goods, services and subjects involved; second, LTS helps promote a stronger co-ordination between the public and the private sector, by identifying a homogeneous territory and recognising its importance in tourists' decisions; third, through the LTS the policymaker can analyze the externalities and promotes the idea of collaborating networks in a context of local development. In the LTS framework, the anticommon problem can be analysed and contrasted. As the tourist has to buy different but intertwined goods which compose the holiday package, the failure in one of the markets can lead to the overall failure of the package. A LTS policy has to: i) co-ordinate the price policy of the different firms supplying “single components” of the tourist product; ii) fix the price of the whole product; iii) impute a price to each component. We demonstrate that, through price policy co-ordination and under general conditions, the LTS can increase the size of tourism and the firms’ profits, thereby reaching a more effective and efficient target in tourism policy. The recent introduction of LTS in the Italian legislation can be seen as a positive attempt of improving co-ordination in a complex sector such as tourism. Keywords: Local tourist systems, Tourism policy Classification-JEL: L83, Q26 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.139 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-139.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.139 Title: Simulating the Impact on the Local Economy of Alternative Management Scenarios for Natural Areas Author-Name: Stefania Lovo Author-X-Name-First: Stefania Author-X-Name-Last: Lovo Author-WorkPlace-Name: University of Verona Author-Name: Paola De Agostini Author-X-Name-First: Paola Author-X-Name-Last: De Agostini Author-WorkPlace-Name: University of Verona Author-Name: Francesco Pecci Author-X-Name-First: Francesco Author-X-Name-Last: Pecci Author-WorkPlace-Name: University of Verona Author-Name: Federico Perali Author-X-Name-First: Federico Author-X-Name-Last: Perali Author-WorkPlace-Name: University of Verona Author-Name: Michele Baggio Author-X-Name-First: Michele Author-X-Name-Last: Baggio Author-WorkPlace-Name: University of Verona Abstract: This working paper estimates the impact on the local economy of the High Garda Natural Park of alternative management scenarios for the West Garda Regional Forest. The local economy is specialized in tourist services and strongly linked to the tourist presence and their level of expenditure. We wish to investigate the effects of the participative management strategy, which takes into account users preferences and the non-participative strategy, using the SAM multiplier analysis. The local SAM has been constructed considering three sectors: agriculture, tourism and a third aggregate sector including all the other activities. The resident population has been divided into two categories: residents employed in the tourist sector and the remaining resident population. The SAM analysis shows that the accounting representation of the local economy is meaningful and that the participative program, if chosen by the central regional management, would be the most desirable program also at the local level. Keywords: Tourism, SAM, Multiplier analysis Classification-JEL: C63, C67 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.140 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-140.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.140 Title: Growth, Conventional Production and Tourism Specialisation: Technological Catching-up Versus Terms-of-Trade Effects Author-Name: Simone Valente Author-X-Name-First: Simone Author-X-Name-Last: Valente Author-WorkPlace-Name: WIF-ETH Zurich Abstract: This paper extends the ’expanding-varieties’ growth model in a two-countries-two-goods setup, and describes the dynamics of growth rates and terms of trade when the industry-based economy is the innovation leader, while the tourism-based economy is the follower (i.e. increases the number of intermediate inputs by readapting innovations developed abroad). Two types of transitional dynamics may exist: technological catching-up and technological falling-behind. Contrary to the standard result, technological catching-up by the follower is associated with lower growth rates with respect to the leader, whereas terms-of-trade effects guarantee positive growth differentials for the tourism-based economy when the technological gap with the leader increases over time. The underlying principle of ’increased relative demand’ might explain the good economic performance observed in tourism-dependent economies. Keywords: Endogenous growth, Two-country models, Technology diffusion, Trade specialization Classification-JEL: F12, F43, O33 Creation-Date: 200510 Template-Type: ReDIF-Paper 1.0 Number: 2005.141 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-141.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.141 Title: International Tourism and Economic Growth: a Panel Data Approach Author-Name: Tiago Neves Sequeira Author-X-Name-First: Tiago Author-X-Name-Last: Neves Sequeira Author-WorkPlace-Name: Universidade da Beira Interior Author-Name: Carla Campos Author-X-Name-First: Carla Author-X-Name-Last: Campos Author-WorkPlace-Name: Universidade da Beira Interior Abstract: On average, tourism-specialized countries grow more than others. This fact is inconsistent with economic theory as, in particular, endogenous growth theory suggests that economic growth is linked with: (1) sectors with high intensity in R&D and thus high productivity; (2) large scale. In this paper, we use panel data methods to go further in treating the endogeneity problem. In general and contrary to previous works, we conclude that tourism, on its own, cannot explain the higher growth rates of these countries. Keywords: Tourism, Economic growth, Panel data Classification-JEL: L83, O40, O50 Creation-Date: 200511 Template-Type: ReDIF-Paper 1.0 Number: 2005.142 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-142.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.142 Title: An Open Source Based Data Warehouse Architecture to Support Decision Making in the Tourism Sector Author-Name: Raffaele Miele Author-X-Name-First: Raffaele Author-X-Name-Last: Miele Author-WorkPlace-Name: Università degli Studi di Napoli Federico II Author-Name: Francesco Mola Author-X-Name-First: Francesco Author-X-Name-Last: Mola Author-WorkPlace-Name: Università degli Studi di Cagliari Abstract: In this paper an alternative Tourism oriented Data Warehousing architecture is proposed which makes use of the most recent free and open source technologies like Java, Postgresql and XML. Such architecture's aim will be to support the decision making process and giving an integrated view of the whole Tourism reality in an established context (local, regional, national, etc.) without requesting big investments for getting the necessary software. Keywords: Tourism, Data warehousing architecture Classification-JEL: L83, C81 Creation-Date: 200511 Template-Type: ReDIF-Paper 1.0 Number: 2005.143 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-143.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.143 Title: Tourism Immiserization: Fact or Fiction? Author-Name: Nishaal Gooroochurn Author-X-Name-First: Nishaal Author-X-Name-Last: Gooroochurn Author-WorkPlace-Name: Nottingham University Business School Author-Name: Adam Blake Author-X-Name-First: Adam Author-X-Name-Last: Blake Author-WorkPlace-Name: Nottingham University Business School Abstract: Tourism plays a major part in the development strategies of both developing and developed countries because of the alleged potential of generating foreign exchange, economic growth and welfare enhancement (Sinclair and Stabler, 1997; Sinclair, 1988). Consequently, in several countries a considerable amount of resources is allocated to further promote the tourism sector in a hope of reaping more economic benefits. However, it is still debatable whether tourism is beneficial for the tourist-receiving country or not. While empirical studies (Adams and Parmenter, 1994; Zhou et al., 1996, Baaijens et al., 1998; Blake, 2000; Blake et. al., 2003; Dwyer et al., 2003), argue that tourism expansion is beneficial to the economy, theoretical studies (Copeland, 1991; Chen and Devereux, 1999; Hazari and Nowak, 2003; Hazari et al., 2003; Nowak et al., 2003) posit that tourism expansion can be immiserizing. This paper critically reviews the theoretical and empirical literature to identify the sources via which tourism expansion can benefit or harm the economy. The issues are then empirically investigated using a CGE model for Mauritius to identify the conditions under which tourism expansion can be immiserizing. Keywords: Tourism, Immiserization, Welfare, Economic growth Classification-JEL: L83, Q26 Creation-Date: 200511 Template-Type: ReDIF-Paper 1.0 Number: 2005.144 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-144.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.144 Title: Social Carrying Capacity of Mass Tourist Sites: Theoretical and Practical Issues about its Measurement Author-Name: Silvia Marzetti Author-X-Name-First: Silvia Author-X-Name-Last: Marzetti Author-WorkPlace-Name: University of Bologna Author-Name: R. Mosetti Author-X-Name-First: R. Author-X-Name-Last: Mosetti Author-WorkPlace-Name: Istituto Nazionale di Oceanografia e Geofisica Sperimentale, OGS Abstract: Congestion is an important management problem at mass tourist sites. This essay focuses on the social carrying capacity (SCC) of a tourist site as indicator of residents’ and visitors’ perception of crowding, intended as the maximum number of visitors (MNV) tolerated. In case of conflict between the residents’ MNV tolerated and the visitors’ MNV tolerated, the policy-maker has to mediate. We consider the case in which the residents’ SCC is lower than the visitors’ SCC, and the site SCC is the result of a compromise between these two aspects of the SCC. This can be measured by making reference to two criteria of choice: the utility maximisation criterion and the voting rule. The use of one method rather than the other depends on the data available about the individual preferences on crowding. Assuming that individual preferences are known, a maximisation model for the computation of the site SCC is conceived. It represents the case in which the residents’ SCC is the limiting factor. The site SCC is intended as the number of visitors which maximises the social welfare function. Because a local policy-maker maximises the welfare of residents, in this model visitors are represented by those residents whose welfare wholly depends on the tourism sector, while the social costs due to crowding are borne by those residents who are partially or totally independent from tourism. Nevertheless, in practice, the individual preferences about crowding are not always known. In this case, the MNV tolerated can be computed by applying the majority voting rule. It is shown that, under certain conditions, the optimum number of visitors, obtained through a maximisation model, is equal to the MNV tolerated by the majority of voters. Keywords: Sustainable tourism development, Tourism carrying capacity, Social carrying capacity, Maximisation criterion, Majority voting rule, Overcrowding, Mass tourist site Classification-JEL: L83, Q01, Q26, Q58 Creation-Date: 200511 Template-Type: ReDIF-Paper 1.0 Number: 2005.145 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-145.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.145 Title: Environmental Quality and Long Run Tourism Development a Cyclical Perspective for Small Island Tourist Economies Author-Name: Marie-Antoinette Maupertuis Author-X-Name-First: Marie-Antoinette Author-X-Name-Last: Maupertuis Author-WorkPlace-Name: IDIM and Università di Corsica Author-Name: Sauveur Giannoni Author-X-Name-First: Sauveur Author-X-Name-Last: Giannoni Author-WorkPlace-Name: IDIM and Università di Corsica Abstract: As tourism is becoming one of the most important sectors of the world economy, the number of small islands trying to develop a competitive tourist activity is increasing and this strategy appears as growth enhancing. In most cases, it is built on the environmental quality of the destination but also on lodging infrastructures and related services that tourists deserve in order to enjoy a good experience. This paper explores the inter-temporal trade-off between tourist investments and environmental quality preservation needed to ensure population revenues in the long run. It highlights possible cyclical evolution of environmental quality, tourist infrastructures, investments and tourist frequentation. Keywords: Tourism, Environment, Lifecycle, Islands Classification-JEL: O1, L83, Q26 Creation-Date: 200511 Template-Type: ReDIF-Paper 1.0 Number: 2005.146 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-146.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.146 Title: An Analysis of the Evolution of Tourism Destinations from the Point of View of the Economic Growth Theory Author-Name: Javier Lozano Author-X-Name-First: Javier Author-X-Name-Last: Lozano Author-WorkPlace-Name: University of the Balearic Islands Author-Name: Javier Rey-Maquieira Author-X-Name-First: Javier Author-X-Name-Last: Rey-Maquieira Author-WorkPlace-Name: University of the Balearic Islands, IMEDEA-UIB of CSIC Abstract: In this paper we try to build a bridge between the traditional analysis of the evolution of tourism destinations and economic growth theory. With such an aim we develop an environmental growth model for an economy specialized in tourism and we derive the pattern of tourism development with numerical calculations. The results of our simulations do not contradict the general pattern of evolution implied in the Tourism Area Life Cycle Hypothesis, being environmental deterioration and public goods congestion the main reasons for the stagnation of the tourism destination. We also show the importance of the quality of private tourism services in the evolution of the tourism destination. Keywords: Tourism, Economic growth, Tourism lifcycle Classification-JEL: L83, Q26, O41 Creation-Date: 200511 Template-Type: ReDIF-Paper 1.0 Number: 2005.147 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-147.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.147 Title: Accounting for Uncertainty Affecting Technical Change in an Economic-Climate Model Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Laurent Drouet Author-X-Name-First: Laurent Author-X-Name-Last: Drouet Author-WorkPlace-Name: LOGILAB-HEC, Université de Genève Abstract: The key role of technological change in the decline of energy and carbon intensities of aggregate economic activities is widely recognized. This has focused attention on the issue of developing endogenous models for the evolution of technological change. With a few exceptions this is done using a deterministic framework, even though technological change is a dynamic process which is uncertain by nature. Indeed, the two main vectors through which technological change may be conceptualized, learning through R&D investments and learning-by-doing, both evolve and cumulate in a stochastic manner. How misleading are climate strategies designed without accounting for such uncertainty? The main idea underlying the present piece of research is to assess and discuss the effect of endogenizing this uncertainty on optimal R&D investment trajectories and carbon emission abatement strategies. In order to do so, we use an implicit stochastic programming version of the FEEM-RICE model, first described in Bosetti, Carraro and Galeotti, (2005). The comparative advantage of taking a stochastic programming approach is estimated using as benchmarks the expected-value approach and the worst-case scenario approach. It appears that, accounting for uncertainty and irreversibility would affect both the optimal level of investment in R&D –which should be higher– and emission reductions –which should be contained in the early periods. Indeed, waiting and investing in R&D appears to be the most cost-effective hedging strategy. Keywords: Stochastic Programming, Uncertainty and Learning, Endogenous Technical Change Classification-JEL: D62, D63, H23, Q29 Creation-Date: 200512 Template-Type: ReDIF-Paper 1.0 Number: 2005.148 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-148.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.148 Title: Migration, Unemployment and Net Benefits of Inbound Tourism in a Developing Country Author-Name: Mondher Sahli Author-X-Name-First: Mondher Author-X-Name-Last: Sahli Author-WorkPlace-Name: Victoria University of Wellington Author-Name: Jean-Jacques Nowak Author-X-Name-First: Jean-Jacques Author-X-Name-Last: Nowak Author-WorkPlace-Name: Université Lille I –MEDEE Abstract: International tourism is increasingly viewed as one of the best opportunities for a sustainable economic and social development of developing countries. There is also an increasing concern from public policy makers as to whether mass tourism coastal resorts can play a catalytic role in the overall economic development and improve the real income of their community. In this paper, we present a general equilibrium model which explicitly takes into consideration specific features of some developing countries (e.g. coastal tourism, dual labour market, unemployment, migrations, competition between agriculture and tourism for land) to analyse the ways by which an inbound tourism boom affects this kind of country, in particular its real income. We define the conditions under which an inbound tourism boom makes developing countries residents worse off. Keywords: Economic impacts, General equilibrium model, Inbound tourism, Migration, Unemployment, Developing countries Classification-JEL: F11, Q17, L83 Creation-Date: 200512 Template-Type: ReDIF-Paper 1.0 Number: 2005.149 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-149.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.149 Title: Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program Author-Name: Michael Greenstone Author-X-Name-First: Michael Author-X-Name-Last: Greenstone Author-WorkPlace-Name: MIT Author-Name: Justin Gallagher Author-X-Name-First: Justin Author-X-Name-Last: Gallagher Author-WorkPlace-Name: UC Berkeley Abstract: Approximately $30 billion (2000$) has been spent on Superfund clean-ups of hazardous waste sites, and remediation efforts are incomplete at roughly half of the 1,500 Superfund sites. This study estimates the effect of Superfund clean-ups on local housing price appreciation. We compare housing price growth in the areas surrounding the first 400 hazardous waste sites to be cleaned up through the Superfund program to the areas surrounding the 290 sites that narrowly missed qualifying for these clean-ups. We cannot reject that the clean-ups had no effect on local housing price growth, nearly two decades after these sites became eligible for them. This finding is robust to a series of specification checks, including the application of a quasi-experimental regression discontinuity design based on knowledge of the selection rule. Overall, the preferred estimates suggest that the benefits of Superfund clean-ups as measured through the housing market are substantially lower than the $43 million mean cost of Superfund clean-ups. Keywords: Valuation of environmental goods, Hazardous waste sites, Environmental regulation, Regression discontinuity, Superfound, Externalities Classification-JEL: H4, Q51,Q53, R5, R2, I18 Creation-Date: 200512 Template-Type: ReDIF-Paper 1.0 Number: 2005.150 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-150.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.150 Title: Mitigation Strategies and Costs of Climate Protection: The effects of ETC in the hybrid Model MIND Author-Name: Kai Lessmann Author-X-Name-First: Kai Author-X-Name-Last: Lessmann Author-WorkPlace-Name: Potsdam Institute for Climate Impact Research (PIK) Author-Name: Ottmar Edenhofer Author-X-Name-First: Ottmar Author-X-Name-Last: Edenhofer Author-WorkPlace-Name: Potsdam Institute for Climate Impact Research Author-Name: Nico Bauer Author-X-Name-First: Nico Author-X-Name-Last: Bauer Author-WorkPlace-Name: Paul ScherrerInstitute (PSI) Abstract: MIND is a hybrid model incorporating several energy related sectors in an endogenous growth model of the world economy. This model structure allows a better understanding of the linkages between the energy sectors and the macro-economic environment. We perform a sensitivity analysis and parameter studies to improve the understanding of the economic mechanisms underlying opportunity costs and the optimal mix of mitigation options. Parameters representing technological change that permeates the entire economy have a strong impact on both the opportunity costs of climate protection and on the optimal mitigation strategies, e.g. parameters in the macro-economic environment and in the extraction sector. Sector-specific energy technology parameters change the portfolio of mitigation options but have only modest effects on opportunity costs, e.g. learning rate of the renewable energy technologies. We conclude that feedback loops between the macro-economy and the energy sectors are crucial for the determination of opportunity costs and mitigation strategies. Keywords: Endogenous technological change, Climate change mitigation costs, Integrated assessment, Growth model, Energy sector, Integrated assessment Classification-JEL: O41, Q40, Q43, Q55, C61, D99 Creation-Date: 200512 Template-Type: ReDIF-Paper 1.0 Number: 2005.151 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2005-151.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2005.151 Title: From Government to Regulatory Governance: Privatization and the Residual Role of the State Author-Name: Enrico Perotti Author-X-Name-First: Enrico Author-X-Name-Last: Perotti Author-WorkPlace-Name: Univerity of Amsterdam Author-Name: Bernardo Bortolotti Author-X-Name-First: Bernardo Author-X-Name-Last: Bortolotti Author-WorkPlace-Name: University of Turin, and Fondazione Eni Enrico Mattei Abstract: This paper reviews the state of thinking on the governance role of public ownership and control. We argue that the transfer of operational control over productive assets to the private sector represents the most desirable governance, due to the inherent difficulty for citizens to constrain political abuse relative to the ability of governments to regulate private activity. However in weak institutional environments the process needs to be structured so as to avoid capture of the regulatory process. The speed of transfer should be timed on the progress in developing a strong regulatory governance system, to which certain residual rights of intervention must be vested. After all, what are “institutions” if not governance mechanisms with some degree of autonomy from both political and private interests? The gradual creation of institutions partially autonomous from political power must become central to the development of an optimal mode of regulatory governance. We advance some suggestions about creating accountability in regulatory governance, in particular creating an internal control system based on a rotating board representative of users, producers and civil society, to be elected by a process involving frequent reporting and disclosure. Keywords: Regulatory Governance, Privatization Classification-JEL: G38, L53 Creation-Date: 200512