Estimates of climate change damage are central to the design of climate policies. Here, we develop a flexible architecture for computing damages that integrates climate science, econometric analyses, ...and process models. We use this approach to construct spatially explicit, probabilistic, and empirically derived estimates of economic damage in the United States from climate change. The combined value of market and nonmarket damage across analyzed sectors—agriculture, crime, coastal storms, energy, human mortality, and labor—increases quadratically in global mean temperature, costing roughly 1.2% of gross domestic product per +1°C on average. Importantly, risk is distributed unequally across locations, generating a large transfer of value northward and westward that increases economic inequality. By the late 21st century, the poorest third of counties are projected to experience damages between 2 and 20% of county income (90% chance) under business-as-usual emissions (Representative Concentration Pathway 8.5).
Recent years have seen considerable interest in the impact of contract farming on farmers in developing countries, motivated out of belief that contract farming spurs transition to modern ...agriculture. In this article, we provide a thorough review of the empirical literature on contract farming in both developed and developing countries, using China as a special case of the latter. We pay careful attention to broad implications of this research for economic development. We first find empirical studies consistently support the positive contribution of contract farming to production and supply chain efficiency. We also find that most empirical studies identify a positive and significant effect of contract farming on farmer welfare, yet are often unable to reach consistent conclusions as to significant correlates of contract participation.
We test the hypothesis of transit-induced gentrification for the Regional Transportation District light rail system in Denver, CO. We use a quasi-experimental spatial econometric approach, the ...spatial difference-in-differences model, to measure the causal relationship between urban rail investments and gentrification, which allows us to capture the average direct and indirect (spatial spillover) effects of urban rail on several socioeconomic measures of gentrification. We further account for unobserved heterogeneity and spatial dependence via the use of a panel data estimator with spatial error components. Our analysis shows that the installation of a light rail station significantly increases household income and housing values in neighborhoods up to one mile from the station.
We investigate the stock market response to firm disclosure of positive environmental information and the link from that information to environmental outcomes. We classify environmental media ...releases by informational content and value relevance, and assess the abnormal stock returns of each type of event. While announcements of future environmental activities lead to the largest favorable stock market reactions, there is no guaranteed link from this type of information to environmental outcomes. Further analysis of the abnormal returns shows that the magnitude of the stock market reaction depends on firm financial characteristics across all event types rather than on firm environmental performance. Our results indicate that the ability for voluntary environmental information disclosure to induce environmental self-regulation is limited to the extent that firms are able to follow through with their announcements of planned environmental activities.
In theory, changes in a host country exchange rate can be a cause or consequence of changes in its level of foreign direct investment (FDI), and recent incidences suggest that government stability ...may have sizable implications for the interactions between FDI and the exchange rate. This paper uses a semiparametric system of simultaneous equations to empirically characterize the relationship between FDI and the exchange rate, with each country’s level of government stability serving as a moderator. The results suggest that across developed and developing economies the most prevalent type of symbiosis between FDI and the exchange rate is a positive effect of FDI on the exchange rate, but no effect of the exchange rate on FDI. This significant FDI effect is heterogeneous, with an interquartile range of 1.241. At the median, a 10% increase in FDI inflows relative to GDP causes approximately a 13.29% increase in the annual change in the exchange rate. Government stability acts as a moderator variable by strengthening the relationship between FDI and the exchange rate in some countries, but eliminates the relationship in other countries.
Although public interest in sustainable and safer products have steadily risen worldwide, research has shown a difference between consumer’s willingness to purchase, and actual purchasing behavior, ...for which two main explanations exist, including a lack of accessibility and a poor knowledge of related attributes. Fortunately, the emergence of online food markets may improve this situation through convenient accessibility to sustainable food and detailed description about sustainability labels. This research uses a hedonic price analysis to compare the price premiums for the sustainability attribute in Chinese online and offline markets, using edible oil as a case. The specific objective is to test the different values of a sustainable attribute, a green food label, in two types of markets. Results show that the green food attribute could gain a price premium in the online market but not in the offline market, indicating the importance of the online channel for sustainable food sale in China. A big price mechanism difference between online and offline markets is also found, with regard to attributes of production method, variety, place of origin, packaging, and discount. These results provide a guide for firms’ pricing strategies in online and offline markets.
Spatial market integration, an important means to increase market efficiency and boost economic development, is often affected by policy changes such as trade liberalization and trade restrictions. ...With unique weekly data on provincial hog prices, we use the 2018 outbreak of African Swine Fever (ASF) in China and the subsequent ban on cross-province shipment of hogs as a natural experiment to study dynamic spatial mechanisms underlying market integration. We employ a high-dimensional spatial model to estimate pairwise inter-province price links over several periods around the ASF outbreak for 29 Chinese provinces. Regressions reveal that a greater inter-province distance weakens the spatial price links post-ban, but not before the ban, which indicates insufficient arbitrage likely due to imperfect public information regarding ASF. The temporary market segmentation implies substantial dead-weight-loss. Our findings highlight the role of public information on risks in maintaining market integration and efficiency under supply-side disruptions.
•The 2018 African Swine Fever (ASF) in China segregated the spatially integrated hog market due to a ban on cross-province hog shipping.•A high-dimensional spatial model is adopted to estimate inter-province price links before and after the ASF outbreak.•The recovery of cross-province price links was slow after the hog shipping ban was lifted.•The long inter-province distance weakens the price links post-ban, but not pre-ban.•Insufficient public information on ASF helps explain the slow recoverage of spatial integration.
•We investigate the effect of gasoline-electric hybrid vehicle ownership on annual miles traveled.•We focus on a social status driven rebound effect and a total rebound effect.•We recover causal ...effects using a matching strategy.•We estimate an overall hybrid rebound of about 3 percent of the (average) annual miles traveled.•We do not find evidence of a social status rebound effect.•Hybrid vehicle adoption reduces fuel consumption by 34 to 46 percent per year compared to gasoline powered vehicles.
We estimate the effect of gasoline-electric hybrid vehicle ownership on household annual miles traveled. We focus on two types of rebound effects associated with hybrid adoption. The first is a social status driven rebound effect arising out of the signaling value associated with visually distinct hybrid vehicles. The second is the total rebound effect: in addition to any social status effects, the higher fuel efficiency of gasoline-electric vehicles leads to a lower cost per mile. We recover causal effects using a matching strategy to account for observable and unobservable factors that influence both hybrid adoption and miles traveled. While we do not find evidence of a significant social status rebound effect, we estimate an overall hybrid rebound of about 3 percent of the (average) annual miles traveled. This rebound effect is not sufficient to offset the reduction in fuel consumption associated with the higher fuel efficiency of the hybrid and we find that hybrid adoption reduces fuel consumption by 34–46 percent per year compared to conventional gasoline powered vehicles.
Due to the decrease in fluid milk consumption as a beverage in the United States, the importance for dairy industry stakeholders to understand attribute preferences for consumer segments has ...increased. This paper uses a representative sample of U.S. residents to determine shopping behavior and a Best-Worst experimental design to examine consumer preferences for select milk attributes. The Random Parameters Logit model revealed the largest preference shares were for price (19.1%), fat content (17.6%), and humane handling (16.1%). Segmentation of the respondents was analyzed using a Latent Class Model, and the demographics of segments were analyzed by probabilistic assignment. This contribution, which may be applied to other products, allows for a detailed understanding of consumer preferences for fluid milk. Demographics such as gender and age were not statistically different across the five classes for this topic, unlike shopping behavior. Class 2 was named “The Balancing Act” due to respondents’ balance between animal welfare aspects and the physical characteristics of milk. Class 5 was dubbed “Value and Volume” due to large preference shares for price and container size. A lower percentage of respondents in “The Balancing Act” (12.2%) reported purchasing fat-free skim milk when compared to the percentage of respondents in “Value and Volume” (18.6%). Due to the large preference shares for traditional milk attributes, Class 3 was named “Traditional Milk Shoppers.” A higher percentage of respondents in “Value and Volume” also reported always reading the information on meat, egg, or milk products when compared to “Traditional Milk Shoppers” (12.2%). Although price is still important to many consumers, certain segments have preferences or demand for other attributes that may be satisfied by producers to increase market share or price premiums.
It has been argued that foreign direct investment can exert upward or downward pressure on the domestic interest rate depending on foreign investors’ relative weights on internal and external finance ...with respect to the domestic economy. Additionally, a country’s level of corruption can influence firms’ ability to obtain external finance. We find that across countries a 1 percent increase in FDI inflows (outflows) is more likely to reduce the domestic interest rate by as much as 0.7 (1) percent. This empirical association between domestic interest rates and FDI flows is non-monotonically contingent on a country’s level of corruption.
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