Endogenous technology adoption under production risk: theory and application to irrigation technology

The use of modern irrigation technologies has been proposed as one of several possible solutions to the problem of water resource scarcity and environmental degradation in many agricultural areas around the world. The main objective of this paper is to present a theoretical framework that conceptualizes adoption as a decision process involving information acquisition by farmers who face yield uncertainty and vary in their risk preferences. This is done by integrating the microeconomic foundations used to analyze production uncertainty at the farm level with the traditional technological adoption models. First we follow the approach of Antle (1987) based on higher-order moments of profit, which enables flexible estimation of the stochastic technology without ad hoc specification of risk preferences. Then individual risk preferences are derived, which are then used to explain farmer’s decision to adopt modern water saving technologies. The proposed model is applied to a randomly selected sample of 265 farms located in Crete, Greece. Results show that risk preferences affect the probability of adoption and provide evidence that farmers invest in new technologies as a means to hedge against input related production risk

Multi-output distance function for the North Sea Beam Trawl Fishery

Interactions between species in a fishery may be either biological (e.g. predatorprey) or technical (e.g. joint production). Technical interactions within fisheries have generally been assumed to exist, although the strength of these interactions has not been previously quantified. In this paper, we estimate a multi-output distance function for the UK North Sea demersal fishery and consider elasticities of substitution between the outputs. The empirical results of the paper have implications for continuing fisheries management in several countries. In particular, they reinforce the need for fisheries managers to consider the technical interactions between species when setting the TACs. Failure to consider these interactions may result in increased discarding in the fishery, and potentially lower than expected future yields

Declining Discount Rates: Evidence from the UK

We estimate schedules of declining discount rates for cost benefit analysis in the UK. We highlight the importance of model selection for this task and hence for the evaluation of long-term investments, namely climate change prevention and nuclear build.long-run discounting, state-space models,regime-switching models, climate change policy,nuclear build

Discounting the distant future: How much does model selection affect the certainty equivalent rate?

Evaluating investments with long-term consequences using discount rates that decline with the time horizon, (Declining Discount Rates or DDRs) means that future welfare changes are of greater consequence in present value terms. Recent work in this area has turned towards operationalising the theory and establishing a schedule of DDRs for use in cost benefit analysis. Using US data we make the following points concerning this transition: i) model selection has important implications for operationalising a theory of DDRs that depends upon uncertainty; ii) misspecification testing naturally leads to employing models that account for changes in the interest rate generating mechanism. Lastly, we provide an analysis of the policy implications of DDRs in the context of climate change for the US and show that the use of a state space model can increase valuations by 150% compared to conventional constant discounting.long-run discounting, interest rate forecasting,interest rate forecasting, state-space models,regime-switching models, climate change policy

Out of sight, not out of mind: developments in economic models of groundwater management

Dynamic models of natural resource management have been applied to groundwater for decades, incorporating at least two inescapable aspects: first, since groundwater stocks are carried over to future periods, dynamic analysis is essential and any costs and benefits included in the analysis will require discounting; second, the positive and normative aspects of management must be clarified at the outset. The difference is fundamental even if the results of the two model types sometimes turn out to be fairly close. A whole strand of literature has been preoccupied with the question of whether policy interventions at least have the potential of improving groundwater management in a meaningful sense. However, given the well-documented parlous state of many aquifers around the world today, the focus has mostly shifted from debating whether or not intervention is worthwhile to identifying the relevant features of complex groundwater systems, designing better policies and facilitating their successful implementation. We survey developments in economic models relevant to groundwater management, focusing especially on the depiction of uncertainty and on the different methods applied to estimate the total economic value of groundwater.info:eu-repo/semantics/acceptedVersio

Irrigation water management under risk: an application to Cyprus

We provide empirical evidence that attitude towards risk is important when assessing the impact of conservation policies on production choices. We �first follow the approach used by Antle (1987) which enables �flexible estimation of the stochastic technology without ad hoc specifi�cation of risk preferences. In a second step, the impact of water quotas on farmer decisions can be solved, using risk aversion and technology parameter estimates. Application is made on a farm-level data-set from the agricultural region of Kiti in Cyprus

Development of an integrated methodology for the sustainableenvironmental and socio-economic management of river ecosystems

The development of theWater Framework Directive aimed to establish an integrated framework of water management at European level. This framework revolves around inland surface waters, transitional waters, coastal waters and groundwaters. In the process of achieving the environment and ecological objectives set fromthe Directive, the role of economics is put in the core of thewatermanagement. An important feature of the Directive is the recovery of total economic cost of water services by all users. The total cost of water services can be disaggregated into environmental, financial and resource costs. Another important aspect of the directive is the identification of major drivers and pressures in each River Basin District.We describe a methodology that is aiming to achieve sustainable and environmental and socioeconomic management of freshwater ecosystem services. The EcosystemServices Approach is in the core of the suggested methodology for the implementation of a more sustainable and efficientwater management. This approach consists of the following three steps: (i) socio-economic characterization of the River Basin area, (ii) assessment of the current recovery of water use cost, and (iii) identification and suggestion of appropriate programs of measures for sustainablewatermanagement over space and time. Thismethodology is consistent with a) the economic principles adopted explicitly by theWater Framework Directive (WFD), b) the three-step WFD implementation approach adopted in the WATECO document, c) the Ecosystem Services Approach to valuing freshwater goods and services to humans. Furthermore, we analyze how the effects ofmultiple stressors and socio-economic development can be quantified in the context of freshwater resources management.We also attempt to estimate the value of four ecosystemservices using the benefit transfer approach for the Anglian River Basin, which showed the significance of such services

EAERE Award for the Best Paper Published in Environmental and Resource Economics During 2019

This is the author accepted manuscript. The final version is available from Springer via the DOI in this reocrdWe present details of the EAERE Award for the Best Paper Published in Environmental and Resource Economics During 2019 together with those Highly Commended papers published during this period

Professor Sir Partha Dasgupta awarded Kew International Medal for contributions to science, conservation and the critical challenges facing humanity

This is the final version. Available from Springer via the DOI in this record.