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Abstract:
We present results for two contingent valuation surveys conducted in Hamilton, Canada and the US to elicit WTP for mortality risk reductions. We find similar Value of Statistical Life estimates across the two studies, ranging from USD 930,000 to USD 4.8 million (2000 US dollars). WTP increases with risk reduction size, but varies little with respondent age: individuals aged over 70 years hold WTP values approximately one-third lower than other respondents. Respondent health status has limited effect on WTP. These results provide little or no evidence for adjusting VSL estimates used in policy analyses for the affected population's age or health status.

Value of a Statistical Life, Mortality Risks, Benefit-cost Analysis

Abstract:
We present the results of two contingent valuation surveys conducted in Hamilton, Canada and nation-wide in the US to elicit WTP for reductions in one's risk of death. We find that the Values of a Statistical Life implied by WTP are very similar across the two studies, and range from $930,000 to $4.8 million (2000 US dollars). WTP increases with the size of the risk reduction, but varies little with the age of the respondents: people older than 70 years of age hold WTP values that are about one-third lower than those of other respondents. This effect is significant in Canada but not in the US. Health status of the respondent has limited effect on WTP. In general, these results provide only little or no evidence that VSL used in environmental policy analyses should be adjusted for the age or health status of people whose lives are saved by environmental policies.

Value of a Statistical Life, mortality risks, benefit-cost analysis

Abstract:
This paper outlines recent developments in U.S. climate policies. Although the United States does not participate in the Kyoto Mechanism, a number of climate policies are being implemented at state level as well as at the federal level. First, we report and compare the federal cap and trade proposals in the 110th Congress. Then, the paper illustrates the current situations of state level climate policies, such as the Regional Greenhouse Gas Initiative in the northeastern states or AB32 in California. We analyze these proposals from the viewpoint of technology policies and impacts on international markets. It is found that technology policies play important roles in the cap and trade proposals and that there is a great expectation for carbon capture and sequestration (CCS) technology. In terms of the impacts on international markets, several federal proposals as well as regional programs permit trading in international markets. As emission targets become more stringent in the future, U.S. GHG emitters are more likely to interact with these markets. Thus, despite the lack of U.S. participation in the Kyoto Protocol, U.S. markets will be linked to foreign markets, at least, in an indirect way.

United States, climate policy, cap and trade, the Kyoto mechanism

Abstract:
Using results from two contingent valuation surveys conducted in Canada and the U.S., we explore the effect of a latency period on willingness to pay (WTP) for reduced mortality risk using both structural and reduced form approaches. We find that delaying the time at which the risk reduction occurs by 10 to 30 years reduces WTP by more than half for respondents in both samples aged 40 to 60 years. Additionally, we estimate implicit discount rates equal to 8% for Canada and 4.5% for the U.S. - both well within the range established previously in the literature.

Value of a statistical life, Mortality risks, Benefit-cost analysis

Abstract:
This paper estimates the impact on Delhi's air quality of a number of policy measures recently implemented in the city to curb air pollution using monthly time-series data from 1990 to 2005. The best known of these measures is the court-mandated conversion of all commercial passenger vehicles - buses, three-wheelers, and taxis - to compressed natural gas (CNG). Broadly, the results point to the success of a number of policies implemented in Delhi but also to a number of areas of growing concern. For example, the results suggest that the conversion of buses from diesel to CNG has helped to reduce PM10, CO, and SO2 concentrations in the city and has not, contrary to conventional wisdom, led to the recent increase in NO2. At the same time, however, the conversion of three-wheelers from petrol to CNG has not had the same benefit, possibly because of poor technology. Another policy measure that appears to have had a positive impact on air quality is the reduction in the sulfur content of diesel and petrol. This has led to a decrease in SO2 levels and, because of conversion of SO2 to sulfates (a fine particle), a decrease in PM10 concentrations. Some of these gains from fuel switching and fuel-quality improvements are, however, being negated by the increase in the proportion of diesel-fueled cars, which is leading to an increase in PM10 and NO2 levels, and by the sheer increase in the number of vehicles.

air pollution, compressed natural gas, low-sulfur diesel, diesel-fueled cars, Delhi

Abstract:
This paper provides an exhaustive review of critical issues in the design of climate mitigation policy by pulling together key findings and controversies from diverse literatures on mitigation costs, damage valuation, policy instrument choice, technological innovation, and international climate policy. We begin with the broadest issue of how high assessments suggest the near and medium term price on greenhouse gases would need to be, both under cost-effective stabilization of global climate and under net benefit maximization or Pigouvian emissions pricing. The remainder of the paper focuses on the appropriate scope of regulation, issues in policy instrument choice, complementary technology policy, and international policy architectures.

global warming damages, mitigation cost, climate policy, instrument choice, technology policy

Abstract:
Is there defensive behavior to prevent diseases such as diarrhea in Jakarta? Yes. And evidence suggests that individual defensive behavior is influenced by exposure to contamination and income and education - as expected. So, given the opportunity and knowledge, individuals try to modify the effect of contamination on the incidence of diarrhea. But that incidence is also affected by the water company and its problems, factors that lie outside the realm of the household. Alberini, Eskeland, Krupnick, and McGranahan develop and estimate a model of household defensive behavior and illness. Using cross-section data from a household survey in Jakarta, they observe defensive behavior (washing hands after using the toilet) consistent with expectations: Defensive effort intensifies with exposure to contamination, and with income and education. Variables associated with the cost of defensive behavior - such as interruptions in the water supply - reduce defensive behavior. The data suggest that wealthier households are no less vulnerable to illness. The water sources that supply the wealthy (the water company and private wells) are disrupted more often, interfering with their defensive behavior. There is also evidence, although weak, to support findings by van der Slice and Briscoe (1993): that pathogens originating within a household are less harmful to household members than are pathogens originating from other households. Given the opportunity and knowledge, individuals try to modify the effect of contamination on the incidence of diarrhea. But diarrhea`s incidence is also affected by decisions and problems outside the realm of the household, including the performance of the water company. This paper - a product of the Public Economics Division, Policy Research Department - is part of a larger effort in the department to analyze pollution control in developing countries. The study was funded by the Bank's Research Support Budget under the research project Pollution and the Choice of Policy Instruments in Developing Countries (RPO 676-48).

Abstract:
This paper provides an exhaustive review of critical issues in the design of climate mitigation policy by pulling together key findings and controversies from diverse literatures on mitigation costs, damage valuation, policy instrument choice, technological innovation, and international climate policy. We begin with the broadest issue of how high assessments suggest the near and medium term price on greenhouse gases would need to be, both under cost-effective stabilization of global climate and under net benefit maximization or Pigouvian emissions pricing. The remainder of the paper focuses on the appropriate scope of regulation, issues in policy instrument choice, complementary technology policy, and international policy architectures.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This paper provides a review of the science pertaining to all aspects of acidification in the Adirondack Park, updating an earlier review of the science (Cook et al. 2002). The review supports an ongoing social science investigation into the willingness to pay for ecological improvements that would result from reduced acid deposition. This paper builds a bridge between the physical science and social science by providing the background that will allow researchers to accurately summarize the crucial elements of ecological status and improvement in a stated preference survey.

acid rain, acidification, stated preference, willingness to pay, benefit estimation

Abstract:
Economic analyses of nature must somehow define the “environmental commodities” to which values are attached. This paper articulates a set of principles to guide the choice and interpretation of nonmarket commodities. We describe how complex natural systems can be decomposed consistent with what can be called “ecological production theory.” Ecological production theory - like conventional production theory - distinguishes between biophysical inputs, process, and outputs. We argue that a systems approach to the decomposition and presentation of natural commodities can inform and possibly improve the validity of nonmarket environmental valuation studies. We raise concerns about the interpretation, usefulness, and accuracy of benefit estimates derived without reference to ecological production theory.

nonmarket valuation, stated preference, revealed preference, commodities, endpoints

Abstract:
Controversy over the value of statistical life (VSL) centers on whether a single value should be applied to all age groups, as currently done by US government agencies, or whether lower values should be used for the elderly, recognizing that their life expectancies are shorter than those of younger people. Surveys of different age groups' willingness to pay (WTP) for mortality-risk reductions can potentially help resolve this issue. This paper reports on an analysis of this survey literature. Of some 36 studies reviewed, the literature is split on whether older people have a lower WTP for mortality-risk reductions. Even among the studies that find such a discount, its size varies widely. A simple statistical analysis of this literature reveals that larger samples and samples with a higher fraction of older people are significantly associated with finding this effect, suggesting that conducting a larger, more thorough study may help resolve this issue. The paper also raises the possibility that the WTP estimated when all factors related to age are allowed to vary may be more useful to policy than the WTP estimated when all such factors are held constant. A clear finding is that there is no evidence to support use of a uniform value of statistical life year.