The travel cost method: an empirical investigation of Randall's difficulty

Randall (1994) argued that the Travel Cost Method, TCM, cannot do what it is supposed to do - generate monetary measures of recreation site benefits for use in Cost Benefit Analysis. Randall argues that what is relevant to recreational decision making is the subjective, and unobservable, price of travel, whereas what TCM uses is the observer assessed cost of travel. Hence, the best that can be expected from TCM is ordinally measurable welfare estimates. This paper formulates ‘Randall’s difficulty’ as an estimation problem and derives some results for that problem. A survey data set and Monte Carlo simulations based upon it, where many of the problems usually attending TCM application are absent, are used to illustrate and quantify Randall’s difficulty. The meaning of, prospects for, and usefulness of ordinal measurement are explored, and the question of the existence of a solution to Randall’s difficulty is considered

Is There an Environmental Kuznets Curve for Sulfur?

The environmental Kuznets curve (EKC) hypothesis proposes that there is an inverted U-shape relation between environmental degradation and income per capita. Various explanations for this phenomenon have been put forward and some authors argue that important explanatory variables are omitted from conventional EKC estimates. Inclusion of these omitted variables is argued to increase the estimated "turning point" - the level of GDP per capita above which environmental degradation is declining. In this paper we use a new cross-section/time-series data base of sulfur emissions for a wide range of developed and developing countries. The methodology involves estimating EKCs for subsets of this database as well as for the sample as a whole. The results show that estimating an EKC using data for only the OECD countries, as has often been the case, leads to estimates where the turning point is at a much lower level than when the EKC is estimated using data for the World as a whole. The paper explores possible explanations of these results using Monte Carlo analysis, and other statistical tests.We conclude that the simple EKC model is fundamentally misspecified and that there are omitted variables which are correlated with GDP

Economics and the natural environment: A review article

Familiarizes the reader with the emerging subject of ecological economics and provides an overview of how ecological economics differs from environmental and resource economics. Proceeds to then review two new environmental and resource economics textbooks, a book on ecological economics and one on the subject of environmental policy in developing economies.Ecology, Economics, Environment