Abstract

http://ssrn.com/abstract=2322948
 


 



Envirodevonomics: A Research Agenda for a Young Field


Michael Greenstone


Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

B. Kelsey Jack


Tufts University; National Bureau of Economic Research (NBER)

September 3, 2013

MIT Department of Economics Working Paper No. 13-19

Abstract:     
Environmental quality in many developing countries is poor and generates substantial health and productivity costs. However, existing measures of willingness to pay for environmental quality improvements indicate low valuations by affected households. This paper argues that this seeming paradox is the central puzzle at the intersection of environmental and development economics: Given poor environmental quality and high health burdens in developing countries, why is WTP so low? We develop a conceptual framework for understanding this puzzle and propose four potential explanations: (1) due to low income levels, individuals value increases in income more than marginal improvements in environmental quality, (2) the marginal costs of environmental quality improvements are high, (3) political economy factors undermine efficient policy-making, and (4) market failures such as weak property rights and missing capital markets drive a wedge between true and revealed willingness to pay for environmental quality. We review the available literature on each explanation and discuss how the framework also applies to climate change, which is perhaps the most important issue at the intersection of environment and development economics. The paper concludes with a list of promising and unanswered research questions for the emerging sub-field of “envirodevonomics.”

Number of Pages in PDF File: 53

Keywords: economic development, environment, externalities, market failures, climate change

JEL Classification: D04, D61, I15, O12, O13, Q56

working papers series


Download This Paper

Date posted: September 10, 2013  

Suggested Citation

Greenstone, Michael and Jack, B. Kelsey, Envirodevonomics: A Research Agenda for a Young Field (September 3, 2013). MIT Department of Economics Working Paper No. 13-19. Available at SSRN: http://ssrn.com/abstract=2322948 or http://dx.doi.org/10.2139/ssrn.2322948

Contact Information

Michael Greenstone (Contact Author)
Massachusetts Institute of Technology (MIT) - Department of Economics ( email )
50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
B. Kelsey Jack
Tufts University ( email )
Medford, MA 02155
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,358
Downloads: 482
Download Rank: 30,318

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.438 seconds