VALUING INJURY TO NATURAL RESOURCES: THE EFFECT OF RESOURCE QUALITY INFORMATION ON PERCEPTIONS AND CONTINGENT VALUES

Respondents are heterogeneous in their prior information about resource injury. The analysis derives an updating model of how heterogeneous respondents incorporate new information contained in resource injury descriptions. The analysis confirms that the sign of the information effect is determined by the difference between new and prior information. However, in the present analysis, respondents differ in prior information so that treatment information induces different perceptions and different values in different respondents. The empirical analysis confirms that identical treatments result in different injury perceptions. Across respondents, treatment induced changes in perceived injury vary not only in size, but also in sign. Both theory and empirical results show that willingness to pay varies directly with perceived injury.Resource /Energy Economics and Policy,

WHEN PRICES MISS THE MARK: METHODS FOR VALUING ENVIRONMENTAL CHANGE

Environmental Economics and Policy,

Intraindustry Trade and the Environment: Is There a Selection Effect?

Replaced with revised version of paper 08/06/10.Environment, Trade, Monopolistic Competition, Selection effect, Environmental quality, Panel data, OECD, Pollution, Environmental Economics and Policy, International Development, International Relations/Trade, Q56, Q51, Q53, Q58, F12, F18,

INFORMATION AS A DOUBLE-EDGE SWORD: IMPLICATIONS FOR FOOD STANDARDS AND LABELS

An analytical model is developed to examine product quality labeling. Prior to labeling all consumers are willing to pay a premium for the quality characteristic but product quality cannot be observed directly. If production costs are increasing, the total quantity produced may contain a mix of products - with and without the high-valued attribute. In the pooled equilibrium demand is influenced by perceptions of the product mix. After labels are introduced the market is separated into two sectors, conventional and high-valued. The economic implications of labels are examined by contrasting welfare in the separating equilibrium with welfare in the pooled equilibrium. Under the models' maintained assumptions the conventional sector loses welfare, while producers of the high-valued product experience gains. In addition, producers of the high-valued product may have incentives to promote costly labeling despite net-welfare losses.Marketing,

THE WELFARE CONSEQUENCES OF CERTIFIED LABELING FOR CREDENCE ATTRIBUTES

Certified labeling for credence attributes is examined using the concepts of pooled and separating equilibria. The analysis addresses a latent credence good demand that differs from a conventional good demand by willingness to pay for the credence characteristic. Third-party certified labeling vertically differentiates the two products and a two separate markets replace a single pooled market. Market outcomes are examined theoretically and with empirical simulations. Costless labeling is net welfare improving, but impacts are highly asymmetric. Credence producers gain largely at the expense of conventional producers. Costly labeling may reduce welfare even with rather modest labeling costs.Marketing,

APPROACHES TO MEASURING CONSUMER BENEFITS FROM FOOD SAFETY

Food safety, consumer benefits, cost/benefit analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,

INFORMATION AS A DOUBLE-EDGED SWORD: THE ECONOMIC AND WELFARE CONSEQUENCES OF CERTIFIED LABELING FOR CREDENCE ATTRIBUTES

Certified labeling for credence attributes is examined using the concepts of pooled and separating equilibria. Credence attributes are product features that cannot be experienced directly by consumer, features such as pesticide-free, dolphin-safe, hormone-free, and organic. Without labeling, the traded good is a mix of credence and conventional goods. With certified labeling, the pooled market is replaced with separate markets for the credence and conventional good. Market outcomes are examined theoretically and with empirical simulations. Costless labeling is net welfare improving, but impacts are highly asymmetric. Credence producers gain largely at the expense of conventional producers. Costly labeling may reduce welfare even with rather modest labeling costs.Marketing,

THE EFFECT OF HAZARDOUS WASTE SITES ON PROPERTY VALUES IN ZONES OF HIGH INDUSTRIAL ACTIVITY: A HEDONIC APPROACH

Hedonic pricing methods typically employ a distance-to-site variable to measure variation in exposure to environmental disamenities. Some environmental disamenities, like hazardous waste sites, may be spatially correlated with another prominent feature of the urban plain zones of industrial activity. In these cases, failure to account for industrial activity is hypothesized to bias coefficient estimates of the distance-to-site measure. The data set includes a distance-to-site measure as well as a distance-to-industrial measure. These measures allow for empirical estimations of the hedonic price function that distinguish the property value effect associated with exposure to hazard from the property value effect associated with industrial activity. The results suggest that failure to account for industrial activity will overstate the effect of hazardous waste sites on property values and inflate benefit estimates associated with hazardous waste clean-up. Key words: Superfund, Spatial Correlates, Industrial Activity, Hedonic Price FunctionSuperfund, Spatial Correlates, Industrial Activity, Hedonic Price Function, Environmental Economics and Policy, Land Economics/Use,

Stated Choice Experiments with Complex Ecosystem Changes: The Effect of Information Formats on Estimated Variances and Choice Parameters

Stated choice experiments about ecosystem changes involve complex information. This study examines whether the format in which ecosystem information is presented to respondents affects stated choice outcomes. Our analysis develops a utility-maximizing model to describe respondent behavior. The model shows how alternative questionnaire formats alter respondents’ use of filtering heuristics and result in differences in preference estimates. Empirical results from a large-scale stated choice experiment confirm that different format presentations of the same information lead to different preference parameter estimates and error variances. A tabular format results in choice parameter estimates with statistically smaller variances than parameters estimated from data obtained with a text-based format. A text-based format also appears to induce greater use of decision heuristics than does a tabular format.choice experiments, heuristics, stated preference, valuation, web surveys, wetland mitigation, Crop Production/Industries, Demand and Price Analysis,