Do Interest Groups Compete?

This paper conducts a test of the hypothesis that interest groups compete strategically for influence with a policy-making agency. It adapts econometric methodology from the empirical industrial organization literature that was designed to work with discrete game-theoretic models, and uses data on whether or not supporting and opposing interest groups submitted comments to the Fish and Wildlife Service about each of 173 proposals to add new species to the endangered species list. The results imply that groups do respond to variations in the expected costs and benefits of a listing when deciding whether to pressure the agency. There is no support, however, for the hypothesis that the levels of pressure exerted by the groups emerge from the Nash equilibrium of games with simultaneous moves and perfect information.

The Price-Elasticity of Stumpage Sales from Federal Forests

This paper explores the influence of the behavior of the Forest Service and Bureau of Land Management on effective public policy toward the national forests. It shows that fluctuations in stumpage sales from such forests have been large. Furthermore, those fluctuations could well have a significant impact on the price elasticity of harvest even with large stocks of uncut volume under contract. System analysis of harvest and sale patterns in nine regions during the period 1951-1992 shows that stumpage sales displayed little correlation with prices during the period; the positive price elasticity of harvest seems to have been induced largely by the behavior of logging firms. However, it finds a positive link between National Forest budgets and annual sales. If budget appropriations had been negatively correlated with stumpage prices, the price elasticity of harvest from federal forests could have been severely damped.

Economies of Scope in Endangered-Species Protection: Evidence from Interest-Group Behavior

This paper looks for positive spillovers from the legal protection of one species to the welfare of others, and for evidence of economies of scope in the costs associated with protecting species under the Endangered Species Act. The analyses use data on the intensity of interest-group comment activity in response to proposals to protect new species. The results suggest that these phenomena are significant, strengthening arguments that wildlife-protection policy should be shifted towards species groups or ecosystems. However, the findings are also consistent with diminishing public willingness-to-pay for protected species in a given area, a pattern which also has public-policy implications.

U.S. Conservation Policy Reconsidered

Research related to the Endangered Species Act tends to take the presence of that policy as given and focus on issues of implementation and effects. This paper seeks to reconsider U.S. conservation policy entirely. The ESA does not protect species or ecosystems that are not endangered, and formally requires that conservation efforts be spread evenly across endangered species to prevent their extinctions. However, the focus of conservation science has evolved in recent years towards ecosystems and away from species. This paper characterizes the composition of optimal conservation spending when species are valued for their contributions to ecosystem services and not always for their own existence. The ESA clearly fails to provide ecosystem services when the species that provide them happen to be widespread enough not to be endangered. I show that the Noahs Ark design of the ESA is also unlikely to yield optimal conservation levels even of endangered species, and can push excess total social resources away from conservation and towards consumer goods. I show that private conservation can help to remediate inefficient distribution of government activity among species if the scale of government programs is modest enough to leave room for private initiatives to remedy accidental government misallocations. Finally, I suggest an alternative pair of policies that protect ecosystem services and match private expenditures on conservation of charismatic species.Resource /Energy Economics and Policy,

Getting on the Map: The Political Economy of State-Level Electricity Restructuring

Retail competition in electricity markets is expected to lead to more efficient electricity supply, lower electricity prices, more innovation by suppliers and a greater variety of electric power service packages. However, only a handful of states have currently gone so far as to pass legislation and/or make regulatory decisions to establish retail wheeling. This paper analyzes a variety of factors that may influence the rate at which legislators and regulators move towards establishing retail competition. In general, we find that where one interest group dominates others in the struggle for influence over the decision makers, the net effect seems to push a state forward more quickly when retail wheeling is expected to yield large efficiency gains.

Optimal Contract Length for Voluntary Land Conservation Programs

In many parts of the world, deteriorating environmental conditions have led policy makers to develop policies and programs aimed at promoting conservation practices on lands devoted to agriculture. Such programs have been studied by environmental economists, but little research has been done on the usefulness of strategically varying the conservation contract's length. This paper uses theory and simulation to investigate the optimal contract length of land conservation programs when a policy maker tries to maximize the present discounted value of the stream of environmental benefits from the program. We find that contract length should vary with characteristics of the ecological processes that yield benefits from land retirement. Optimal contracts are longer when the environmental benefits in question things like woodland biodiversity take time to develop. However, it is not typically optimal to have the indefinitelylived contracts favored by some conservation groups, or even to offer contracts as long as the maturation period for the environmental services in question. In general, the optimal contract length depends on the trade off between an ecological effect (increasing the environmental benefits from one farmer) and an enrollment effect (increasing the number of farmers enrolled). Our findings also suggest that non-ecological regional characteristics (such as turnover rate and average farm income) could play an important role in the design of conservation programs.Environmental Economics and Policy,

Benefits of pollution monitoring technology for greenhouse gas offset markets

Environmental economists have shown that tradable emission permit markets can reduce the costs to society of pollution reduction. However, when emissions are difficult to monitor and verify, offset credits from pollution reductions may be subject to price discounts that reduce social welfare. In this paper, we estimate the extent to which social welfare could be improved by using new technology to increase the accuracy with which pollution flows from agricultural fields can be monitored. We use a hypothetical case study of a situation in which farmers can reduce nitrous oxide (N2O) emissions from Midwest agricultural land parcels and sell the resulting offset permits in a greenhouse gas tradable permit market. We simulate market outcomes with and without an inexpensive technology that increases the accuracy of emission estimates, reduces the discount to which agricultural offset permits are subject, and improves the performance of tradable permit system. We find that the benefits from such technology range as high as $138 for a 100 acre field if N2O emissions are an exponential function of nitrogen application rates. However, variation in the benefits to farmers of eliminating price discounts may mean efficient technology adoption is not uniform across space.tradable permit, greenhouse gases, uncertainty, technology

Water quality warnings and recreational fishing: effects over time and across space

Resource /Energy Economics and Policy,

Defensive purchasing and motor-vehicle policy effectiveness

We present a theory of vehicle choice where utility depends on the vehicle choices made by other consumers. We use parameters from current transportation and public safety data to show that changes in motor vehicle policy may have unexpectedly large or non-existent effects on safety, fleet mix, and the environment.Public Economics,

Estimating Full IM240 Emissions from Partial Test Results: Evidence from Arizona

The expense and inconvenience of enhanced vehicle emissions testing using the full 240-second dynamometer test has led states to search for ways to shorten the test process. In fact, all states that currently use the IM240 allow some type of fast-pass, usually as early in the test as second 31, and Arizona allows vehicles to fast-fail after second 93. While these shorter tests save states millions of dollars in inspection lanes and driver costs, there is a loss in information since test results are no longer comparable across vehicles. This paper presents a methodology for estimating full 240 second results from partial-test results for three pollutants: HC, CO and NOx. Using random sample of vehicles in Arizona which received full 240 second tests, we use regression analysis to estimate the relationship between emissions at second 240 and emissions at earlier seconds in the test. We examine the influence of other variables such as age, model-year group, and the pollution level itself on this relationship. We then use the estimated coefficients in several applications. First, we attempt to shed light on the frequent assertion that the results of the dynamometer test provide guidance for vehicle repair of failing vehicles. Using a probit analysis, we find that the probability that a failing vehicle will passing the test on the first retest is greater the longer the test has progressed. Second, we test the accuracy of our estimates for forecasting fleet emissions from partial test emissions results in Arizona. We find that forecast fleet average emissions are very close to the actual fleet averages.