The Optimal Point for Fiscal Decentralization

The paper’s purpose is to shed more light on the impact of fiscal decentralization on the economy and determine whether or not a tipping point can be identified as an optimal point of fiscal decentralization. To do so, we proposed a new theoretical model to link two measurements of fiscal decentralization such as fiscal autonomy and fiscal importance to provincial GDP, and then apply our model with panel data to provincial GDP of Vietnam over ten years and across 56 provinces to test the significance of the impact of fiscal decentralization on the economy and compute the optimal point of fiscal decentralization. Generalized linear model with maximum likelihood method was applied to estimate coefficients in the analytical model. The results of empirical analysis indicated that our model is statistically significant and there exists an optimal point for fiscal decentralization with value captured is 7.33 of fiscal autonomy index and 0.25 of fiscal importance index. Additionally, the study also investigated that the fiscal decentralization would become a positively influential element on the economy, if the degree of fiscal decentralization underlies the optimal point. If the degree of fiscal decentralization exceeds the optimal point, however, it would affect  negatively on the economy. Keyword: Fiscal decentralization, Optimal point, Provincial GD

Water Policy Reforms in South Korea: A Historical Review and Ongoing Challenges for Sustainable Water Governance and Management

This study aims to provide an opinion on the state-of-the-art of changes and reforms of water policies in South Korea, as well as the challenges along with their implications for sustainable water governance and management. In parallel with change in water resource characteristics generated by physical, environmental and socio-economic challenges such as: (1) uncertainties about climate change (flooding and drought) including seasonal and regional variation in precipitation; (2) significant increase in water use caused by rapid urbanization and population growth in industrialized urban areas; (3) inadequate water pricing mechanism which covers only around 80% of the production cost and makes it harder to maintain water systems; and (4) recursive water quality degradation and conflicts over water rights between regions resulting from non-point source pollution in highland versus lowland areas, Korean water policies have been developed through diverse reforms over 100 years. Nevertheless, new challenges for sustainable water management are continuously emerging. To meet those challenges we provide two ideas: (i) provider-gets-principle (payment for ecosystem services) of cost-benefit sharing among stakeholders who benefit from water use; and (ii) water pricing applying full-cost pricing-principle internalizing environmental externalities caused by the intensive water use. Funds secured from the application of those methods would facilitate: (1) support for upstream (rural) low income householders suffering from economic restrictions; (2) improvement in water facilities; and (3) efficient water use and demand management in South Korea’s water sectors. We expect that this paper can examine the lessons relevant to challenges that South Korea faces and offer some implications on the formulation of new integration and further reforms of the institutions, laws and organizations responsible for managing water resources in South Korea

The Role of Tax in Managing Offshore Fishing Activities: An Application of Bioeconomic Model

The paper’s purpose is to light up the role of tax in managing offshore fishing activities. It was conducted by considering two management regimes; (1) assumes that the number of fishing firms is finite and defined as a restricted access regime, and (2) the number of fishing firms is infinite, which is regarded as an open access regime, to enter into a coastal nation’s fisheries. Each management regime is linked to two policy goals; namely, the maximum sustainable biomass yield and maximum sustainable economic yield goal. The Verhulst Schaefer model and Wachsman model were employed to estimate the biological parameters and economic analysis. The results of empirical analysis indicated that a coastal nation could control the effort and stock through adjusting the fishing fee that can be determined as a tax policy. More especially, if a coastal nation didn’t charge any fee level on fishing firms, even though the number of firms was restricted, the stock still was under acceptable level, which leads to the depletion and potential collapse risk of fisheries. Additionally, a coastal nation could adopt one of four fee levels such as rMSBY (0.3378), rMSEY (0.5071), r’MSBY (0.3623), and r’MSEY (0.5165) depending on each management regime and policy goal selected. However, it would be better if the coastal nation selects the open access regime, and then charges on fishing firms at level of r’MSBY or r’MSEY. Keywords: Tax, Fishing Management regime, Policy goal Classification: JEL, Q 2

Estimating Nonmarket Values in Halong Bay, Vietnam: A View from Theory of Planned Behavior

The lack of psychological factors in traditional CV model doesn’t only influence the explanation of payment behavior, but also it affects the accuracy of the WTP result, which is closely related to the policy making process for natural conservation and environmental improvement programs. Therefore, there is a need to link the psychological factors and to the payment behavior. This paper is started by discussion of some influential causes on validity and reliability of estimation results in traditional CV model, and then introduces a new model that is built from incorporating the theory of planned behavior (TPB) into the CVM. Linear regression model and hierarchical technique was applied for empirical analysis. The results of empirical analysis indicated that if WTP was identified as an expression of individual behavior, then it would be explained preferably by the theoretical framework of planned behavior while still conform to principles in the theory of consumer behavior. The results also shown that the WTP was not only affected by factors like income, cost, personal context, and attributes of environmental good in hypothetical market, but also it was influenced strongly and significantly by psychological factors. Regarding with the reliability of estimation result, this paper investigated that the CV result depends on the number and types of explanatory variables that put into the estimation model. The WTP value, for environmental quality improvement in Halong Bay, Vietnam, was US$0.60/ person/ trip. An extra charge might be added to the price of entrance ticket. Keywords: Contingent valuation method, theory of planned behavior, psychological factors, validity and reliability

Do Consumers of Environmentally Friendly Farming Products in Downstream Areas Have a WTP for Water Quality Protection in Upstream Areas?

In South Korea, the Soyang Lake is an important source of drinking water to the metropolitan areas including Seoul. However, water quality problems in the Soyang Lake have still remained due to chemical contaminations attributed to conventional farming practices in the upstream areas. Based on a downstream consumer survey using a contingent valuation method, this study estimated the expected willingness to pays (WTPs) for water quality improvement through the conversion to environmentally friendly farming (EFF). The results showed that the estimated annual mean WTP is KRW 36,115 per household. The aggregated WTPs of downstream respondents in the Soyang Lake are sufficient to compensate for the income losses of upstream EFF farmers in highland farming areas. In addition, we found that the downstream citizens who recognize the label for EFF products and who intend to purchase EFF products in the future have a significant impact on WTPs for water quality improvement

Willingness to Pay for a Highland Agricultural Restriction Policy to Improve Water Quality in South Korea: Correcting Anomalous Preference in Contingent Valuation Method

This study examines the willingness to pay (WTP) for the highland agriculture restriction policy which aims to stabilize the water quality in the Han River basin, South Korea. To estimate the WTP, we use a double-bounded contingent valuation method and a random-effects interval-data regression. We extend contingent valuation studies by dealing with the potential preference anomalies (shift, anchoring, and inconsistent response effects). The result indicates that after the preference anomalies are corrected, the statistical precision of parameter estimates is improved. After correcting the potential preference anomalies, estimated welfare gains are on average South Korean currency (KRW) 2,861 per month per household. Based on the WTP estimate, the total benefits from the land use restriction policy are around KRW 297.73 billion and the total costs are around KRW 129.44 billion. The net benefit is, thus, around KRW 168.29 billion. This study suggests several practical solutions that would be useful for the water management. First, a priority should be given to the valid compensation for the highland farmers’ expected income loss. Second, it is necessary to increase in the unit cost of the highland purchase. Third, wasted or inefficiently used costs (e.g., overinvestment in waste treatment facilities, and temporary upstream community support) should be transferred to the program associated with high mountainous agriculture field purchase. Results of our analysis support South Korean legislators and land use policy makers with useful information for the approval and operationalization of the policy.DFG/GRK 1565/1University of BayreuthNational Research Foundation of Kore

Economic valuation of the aquatic biodiversity conservation in South Korea: Correcting for the endogeneity bias in contingent valuation

In this study, we use the Contingent Valuation (CV) method to estimate households' willingness to pay (WTP) for the aquatic ecosystem health (biodiversity) improvement. This paper extends CV studies by dealing with the endogenous effect of a proxy variable, namely the subjective experience of negative environmental quality changes. The results show that the correction for the endogeneity bias facilitates the efficiency of parameter estimation in the empirical model. The mean WTP per household accounts for around 46.8% (KRW 79.6) of the current water use charge (KRW 170 per cubic meter). The total benefit from conserving the biodiversity is around KRW 198.62 billion. We found several factors that affect households' WTP for fish biodiversity conservation, suggesting the importance of these factors in the formulation of water policies associated with aquatic biodiversity. In addition, the inefficient water management costs should be redistributed to other projects or new programs such as for the fish biodiversity conservation. © 2017 by the authors.DFG/GRK/1565/

Benefit Transfer for Water Management along the Han River in South Korea Using Meta-Regression Analysis

This study estimates the magnitude of economic benefits that are justified in transfer from downstream users to upstream users for the use of the Han River in South Korea in terms of foregone economic benefits by regulations. Based on the existing non-market valuation studies associated with water management issues in South Korea from 1997 to 2014, a meta-regression analysis was performed to provide alternatives for regional benefit sharing of water resource use. The benefits from the use of water resource along the Han River are estimated on average to be KRW 7,728 (US $7.7) per household per month. The total net benefits are estimated to be about KRW449 billion (US$449 million) per year. Following the principle regarding equal distribution of benefits, the stakeholders who received more net benefits than others should return their extra net benefits to other stakeholders through a policy tool such as tradable development rights. The results of our study provide economic indicators useful for the establishment of common resource policy and to consider stakeholders' rights within the framework of regional benefits. This study also provides practical solutions that could be used as a valid policy instrument to mediate the conflicts and disputes associated with water resource use.Kangwon National UniversityUniversity of Bayreut

25th annual computational neuroscience meeting: CNS-2016

The same neuron may play different functional roles in the neural circuits to which it belongs. For example, neurons in the Tritonia pedal ganglia may participate in variable phases of the swim motor rhythms [1]. While such neuronal functional variability is likely to play a major role the delivery of the functionality of neural systems, it is difficult to study it in most nervous systems. We work on the pyloric rhythm network of the crustacean stomatogastric ganglion (STG) [2]. Typically network models of the STG treat neurons of the same functional type as a single model neuron (e.g. PD neurons), assuming the same conductance parameters for these neurons and implying their synchronous firing [3, 4]. However, simultaneous recording of PD neurons shows differences between the timings of spikes of these neurons. This may indicate functional variability of these neurons. Here we modelled separately the two PD neurons of the STG in a multi-neuron model of the pyloric network. Our neuron models comply with known correlations between conductance parameters of ionic currents. Our results reproduce the experimental finding of increasing spike time distance between spikes originating from the two model PD neurons during their synchronised burst phase. The PD neuron with the larger calcium conductance generates its spikes before the other PD neuron. Larger potassium conductance values in the follower neuron imply longer delays between spikes, see Fig. 17.Neuromodulators change the conductance parameters of neurons and maintain the ratios of these parameters [5]. Our results show that such changes may shift the individual contribution of two PD neurons to the PD-phase of the pyloric rhythm altering their functionality within this rhythm. Our work paves the way towards an accessible experimental and computational framework for the analysis of the mechanisms and impact of functional variability of neurons within the neural circuits to which they belong

Benefit Transfer for Water Management along the Han River in South Korea Using Meta-Regression Analysis

This study estimates the magnitude of economic benefits that are justified in transfer from downstream users to upstream users for the use of the Han River in South Korea in terms of foregone economic benefits by regulations. Based on the existing non-market valuation studies associated with water management issues in South Korea from 1997 to 2014, a meta-regression analysis was performed to provide alternatives for regional benefit sharing of water resource use. The benefits from the use of water resource along the Han River are estimated on average to be KRW 7,728 (US $7.7) per household per month. The total net benefits are estimated to be about KRW 449 billion (US$449 million) per year. Following the principle regarding equal distribution of benefits, the stakeholders who received more net benefits than others should return their extra net benefits to other stakeholders through a policy tool such as tradable development rights. The results of our study provide economic indicators useful for the establishment of common resource policy and to consider stakeholders’ rights within the framework of regional benefits. This study also provides practical solutions that could be used as a valid policy instrument to mediate the conflicts and disputes associated with water resource use