Foreign transfers and tropical deforestation: what terms of conditionality

The purpose of this paper is to propose a nonparametric interest rate term structure model and investigate its implications on term structure dynamics and prices of interest rate derivative securities. The nonparametric spot interest rate process is estimated from the observed short-term interest rates following a robust estimation procedure and the market price of interest rate risk is estimated as implied from the historical term structure data. That is, instead of imposing a priori restrictions on the model, data are allowed to speak for themselves, and at the same time the model retains a parsimonious structure and the computational tractability. The model is implemented using historical Canadian interest rate term structure data. The parametric models with closed form solutions for bond and bond option prices, namely the Vasicek (1977) and CIR (1985) models, are also estimated for comparison purpose. The empirical results not only provide strong evidence that the traditional spot interest rate models and market prices of interest rate risk are severely misspecified but also suggest that different model specifications have significant impact on term structure dynamics and prices of interest rate derivative securities.

From the lab to the field: Cooperation among fishermen

We conduct a field experiment to measure cooperation among groups of recreational fishermen at a privately owned fishing facility. The parameters are chosen so that group earnings are greater when group members catch fewer fish, as in the Voluntary Contributions Mechanism (VCM). In a manner consistent with classical economic theory, though in contrast to prior results from laboratory experiments, we find no evidence of cooperation. We construct a series of additional treatments to identify causes of the di®erence. We rule out the subject pool and the laboratory setting as potential causes, and identify the type of activity involved as the source of the lack of cooperation in our field experiment. When cooperation requires a reduction in fishing effort, individuals are not cooperative, whether the reduction in fishing translates into more money or into more fishing opportunities for the group.

Does oil price uncertainty affect energy use?

Theory predicts that the presence of fixed costs affects the relationship between energy use and energy price changes, as the firm's output and investment decisions respond differently to energy price increases and decreases. The asymmetry in response to energy price changes is exacerbated by uncertainty with respect to future energy prices, but to date the empirical literature does not explicitly take uncertainty into account. The contribution of this paper is twofold. First, we develop a new measure of energy price uncertainty. Second, we apply the measure to explain energy use in 8 OECD countries between 1978 and 1996, trying to identify whether indeed energy price uncertainty effects the asymmetry resulting from changes in energy use.

Punishment, reward, and cooperation in a framed field experiment

We report a framed field experiment, in which we study the effectiveness of punishment and reward in sustaining cooperation in a social dilemma. Punishments tend to be directed at non-cooperators and rewards are assigned by those who are relatively cooperative. In contrast to the results typically found in laboratory experiments, however, we find that punishments and rewards fail to increase cooperation.Field experiment, public goods game, social preferences, punishment, reward

A NOTE ON HIGH DISCOUNT RATES AND DEPLETION OF PRIMARY FORESTS

Conventional wisdom implies that high discount rates accelerate depletion of tropical forests. As shown in this article, this result does not necessarily hold in a two-state variable model that distinguishes between primary and secondary forest stocks. In the context of a fixed concession period and imperfect government control, logging of primary forests may be both accelerated and depressed as discount rates increase.Resource /Energy Economics and Policy,

Asymmetric adaptations to energy price changes

The effectiveness of policies to reduce the use of energy depend on the elasticity of substitution between the various inputs and on the rate of technological progress. This paper presents a theoretical model emphasising energy investments\' characteristics of uncertainty and irreversibility that result in testable hypotheses concerning the relative values of substitution parameters and rates of technological change in periods of high and increasing energy prices and in periods of low prices. Estimation results for a panel of sectors of the Dutch economy show that the elasticity of substitution between energy and other inputs is low in periods of low energy prices, whereas it is significantly higher in the preceding period of high and increasing energy prices. Furthermore, energy-saving technological progress in periods of high and increasing energy prices is also significantly higher than if energy prices are low and falling. The regression results suggest that, due this asymmetric response of firms to changes in energy prices, taxing energy in the current period of low energy prices will not yield substantial reductions in energy use of Dutch industry.

From the lab to the field: Cooperation among fishermen

We conduct a field experiment to measure cooperation among groups of recreational fishermen at a privately owned fishing facility. The parameters are chosen so that group earnings are greater when group members catch fewer fish, as in the Voluntary Contributions Mechanism (VCM). In a manner consistent with classical economic theory, though in contrast to prior results from laboratory experiments, we find no evidence of cooperation. We construct a series of additional treatments to identify causes of the di®erence. We rule out the subject pool and the laboratory setting as potential causes, and identify the type of activity involved as the source of the lack of cooperation in our field experiment. When cooperation requires a reduction in fishing effort, individuals are not cooperative, whether the reduction in fishing translates into more money or into more fishing opportunities for the group.Public Goods Game, Field Experiment, Social Preferences

Land degradation in Ethiopia: What do stoves have to do with it?

Land degradation is a particularly vexing problem in developing countries; as forests are depleted, crop residues and dung are used for fuel, which degrades cropland. In Ethiopia, the government encourages tree planting and adoption of energy efficient stove technologies to mitigate land degradation. We use data from 200 households in Tigrai, Ethiopia to examine the adoption of new stove technologies. Adoption is an economic decision, related to savings in time spent collecting fuel and cooking, and cattle required for everyday purposes. Results indicate adopters of efficient stoves reduce respective wood and dung use by 68 and 316 kg per month.land degradation, technology adoption, Africa, Ethiopia

Complementarity, impatience, and the resilience of natural-resource-dependent economies

We study how human preferences aect the resilience of economies that depend on more than one type of natural resources. In particular, we analyze whether the degree of substitutability of natural resources in consumer needs may give rise to multiple steady states and path dependence even when resources are managed optimally. This is a major shift in the interpretation and analysis of resilience, from viewing (limited) resilience as an objective property of the economy-environment system to acknowledging its partially subjective, preference-based character. We nd that society tends to be less willing to buer exogenous shocks if resource goods are complements in consumption than if they are substitutes. Hence, the stronger the complementarity between the various types of resource goods, the less resilient the economy is.Resilience; substitutes and complements; discounting; multiple steady states; natural resources; path dependence; regime shifts; tipping points