Revealed Preference Methods What types of values can revealed preference (RP) methods measure? What is the basic idea behind RP methods? What is the basic intuition for how the hedonic pricing method works? Give examples of the types of products that are amenable to a hedonic pricing analysis. What are some of the limitations of the hedonic property pricing method? What is the basic intuition for how the travel cost method (a recreation demand method) works? Stated Preference Methods Compare and contrast revealed and stated preference. Broadly speaking, what are the relative advantages and disadvantages of each? What are the five stages of a contingent valuation analysis? Why are in-person interviews considered to be a superior method of collecting data for a contingent valuation study relative to telephone, mail, or internet surveys? Among the various methods of eliciting WTP/WTA in a CV study, which is considered to be the “gold standard,” and why? What do scope, convergent validity, and construct validity refer to? What are some of the known problems with CV analyses? What is the “warm glow” effect? Why is it an issue that, in a CV study, individuals are typically asked to make voluntary payments for public goods? Measuring health benefits What does the “value of a statistical life” refer to? How is it defined? True/False. The value of a statistical life refers to the amount that the average individual would pay to avoid certain death this year. Explain. How does the “averting behavior” method work? What are some of the limitations of this approach? How does the “cost of illness” method work? What are some of the limitations of this approach? Sustainability In class, we saw two examples of perspectives on sustainability. What were they? According to each perspective, are growth and sustainability compatible? Why / why not? What fundamental assumptions does each perspective make about the world? What distinguishes “weak” from “strong” sustainability? How did Solow define sustainability? What are the fundamental features of his definition? How does this definition differ from “strong” sustainability? Can depleting the world’s oil/coal/gas reserves be sustainable? Under what definition of sustainability might this be sustainable? Given that definition, what steps must be taken to ensure that the depletion of natural resources is done sustainably? Scarcity is not just a physical phenomenon. Explain. The reserves-to-production ratio for many non-renewable resources has been increasing rather than decreasing in recent years. Why? What is the empirical evidence on scarcity? Are non-renewable resources becoming scarcer in an economically meaningful way? How are renewable resources different? What are the practical difficulties of implementing the economist’s definition of sustainability? Why is measurement important? Why is it challenging? Why are existing measures insufficient? Why might a global (rather than national) measure be needed? Explain how/why sustainability involves a trade-off between inter-generational and intra-generational equity. Sustainability and economic growth What is the Porter Hypothesis? How does it differ from the standard view of the impact of regulation on the economy? What does the empirical evidence say about which of these views is a more accurate reflection of reality? What is the “Environmental Kuznet’s Curve?” What is its shape, and what are the key determinants of its shape? Of these factors, which has been argued to be the most important? What are the “Pollution Haven Hypothesis” and the “Pollution Haven Effect?” Global Climate Change What is the “social cost of carbon?” How can it be used in practice? Should we expect market forces alone to lead us to stop consuming fossil fuels? Discuss both supply and demand factors. Why is international or even global cooperation necessary to deal with climate change? Explain the temporal (time) aspect of climate change and how this aspect matters for the policy response to climate change. What does emissions “leakage” refer to the context of climate change? Why does it matter for the design of policies / agreements to mitigate climate change? According to Robert Stavins and Sheila Olmstead, what are the three key elements of an effective international climate change policy architecture? What is the Kyoto Protocol? What were some of the strengths and weaknesses of the Kyoto protocol? How is the Paris agreement different? What was the Berlin Mandate? How did its incorporation into the Kyoto Protocol affect the success of that agreement?
Revealed Preference Methods
What types of values can revealed preference (RP) methods measure? What is the basic idea behind RP methods?
What is the basic intuition for how the hedonic pricing method works? Give examples of the types of products that are amenable to a hedonic pricing analysis. What are some of the limitations of the hedonic property pricing method?
What is the basic intuition for how the travel cost method (a recreation demand method) works?
Stated Preference Methods
Compare and contrast revealed and stated preference. Broadly speaking, what are the relative advantages and disadvantages of each?
What are the five stages of a contingent valuation analysis?
Why are in-person interviews considered to be a superior method of collecting data for a contingent valuation study relative to telephone, mail, or internet surveys?
Among the various methods of eliciting WTP/WTA in a CV study, which is considered to be the “gold standard,” and why?
What do scope, convergent validity, and construct validity refer to?
What are some of the known problems with CV analyses? What is the “warm glow” effect? Why is it an issue that, in a CV study, individuals are typically asked to make voluntary payments for public goods?
Measuring health benefits
What does the “value of a statistical life” refer to? How is it defined?
True/False. The value of a statistical life refers to the amount that the average individual would pay to avoid certain death this year. Explain.
How does the “averting behavior” method work? What are some of the limitations of this approach?
How does the “cost of illness” method work? What are some of the limitations of this approach?
Sustainability
In class, we saw two examples of perspectives on sustainability. What were they? According to each perspective, are growth and sustainability compatible? Why / why not? What fundamental assumptions does each perspective make about the world?
What distinguishes “weak” from “strong” sustainability?
How did Solow define sustainability? What are the fundamental features of his definition? How does this definition differ from “strong” sustainability?
Can depleting the world’s oil/coal/gas reserves be sustainable? Under what definition of sustainability might this be sustainable? Given that definition, what steps must be taken to ensure that the depletion of natural resources is done sustainably?
Scarcity is not just a physical phenomenon. Explain.
The reserves-to-production ratio for many non-renewable resources has been increasing rather than decreasing in recent years. Why?
What is the empirical evidence on scarcity? Are non-renewable resources becoming scarcer in an economically meaningful way? How are renewable resources different?
What are the practical difficulties of implementing the economist’s definition of sustainability? Why is measurement important? Why is it challenging? Why are existing measures insufficient? Why might a global (rather than national) measure be needed?
Explain how/why sustainability involves a trade-off between inter-generational and intra-generational equity.
Sustainability and economic growth
What is the Porter Hypothesis? How does it differ from the standard view of the impact of regulation on the economy? What does the empirical evidence say about which of these views is a more accurate reflection of reality?
What is the “Environmental Kuznet’s Curve?” What is its shape, and what are the key determinants of its shape? Of these factors, which has been argued to be the most important?
What are the “Pollution Haven Hypothesis” and the “Pollution Haven Effect?”
Global Climate Change
What is the “
Should we expect market forces alone to lead us to stop consuming fossil fuels? Discuss both
Why is international or even global cooperation necessary to deal with climate change?
Explain the temporal (time) aspect of climate change and how this aspect matters for the policy response to climate change.
What does emissions “leakage” refer to the context of climate change? Why does it matter for the design of policies / agreements to mitigate climate change?
According to Robert Stavins and Sheila Olmstead, what are the three key elements of an effective international climate change policy architecture?
What is the Kyoto Protocol? What were some of the strengths and weaknesses of the Kyoto protocol? How is the Paris agreement different?
What was the Berlin Mandate? How did its incorporation into the Kyoto Protocol affect the success of that agreement?
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