Econometrics Informing Natural Resources Management NEW HORIZONS IN ENVIRONMENTAL ECONOMICS Series Editors: Wallace E. Oates, Professor of Economics, University of Maryland, USA and Henk Folmer, Professor of General Economics, Wageningen University and Professor of Environmental Economics, Tilburg University, The Netherlands This important series is designed to make a significant contribution to the development of the principles and practices of environmental economics. It includes both theoretical and empirical work. International in scope, it addresses issues of current and future concern in both East and West and in developed and devel- oping countries. The main purpose of the series is to create a forum for the publication of high quality work and to show how economic analysis can make a contribution to understanding and resolving the environmental prob- lems confronting the world in the twenty-first century. Recent titles in the series include: The Economic Valuation of the Environment and Public Policy A Hedonic Approach Noboru Hidano Global Climate Change The Science, Economics and Politics James M. Griffin Global Environmental Change in Alpine Regions Recognition, Impact, Adaptation and Mitigation Edited by Karl W. Steininger and Hannelore Weck-Hannemann Environmental Management and the Competitiveness of Nature-Based Tourism Destinations Twan Huybers and Jeff Bennett The International Yearbook of Environmental and Resource Economics 2003/2004 A Survey of Current Issues Edited by Henk Folmer and Tom Tietenberg The Economics of Hydroelectric Power Brian K. Edwards Does Environmental Policy Work? The Theory and Practice of Outcomes Assessment Edited by David E. Ervin, James R. Kahn and Marie Leigh Livingston The International Yearbook of Environmental and Resource Economics 2004/2005 A Survey of Current Issues Edited by Tom Tietenberg and Henk Folmer Voluntary Approaches in Climate Policy Edited by Andrea Baranzini and Philippe Thalmann Welfare Measurement in Imperfect Markets A Growth Theoretical Approach Thomas Aronsson, Karl-Gustaf Löfgren and Kenneth Backland Econometrics Informing Natural Resources Management Selected Empirical Analyses Phoebe Koundouri Econometrics Informing Natural Resources Management Selected Empirical Analyses Edited by Phoebe Koundouri Senior Lecturer, Department of Economics, University of Reading, UK; Senior Research Fellow, Department of Economics, University College London, UK; Member of The World Bank Groundwater Management Advisory Team (GWMATE) NEW HORIZONS IN ENVIRONMENTAL ECONOMICS Edward Elgar Cheltenham, UK • Northampton, MA, USA © Phoebe Koundouri, 2004 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher. Published by Edward Elgar Publishing Limited Glensanda House Montpellier Parade Cheltenham Glos GL50 1UA UK Edward Elgar Publishing, Inc. 136 West Street Suite 202 Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library ISBN 1 84376 922 0 (cased) Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall Dedication To Nikitas, my inspiration and rock, hopefully throughout this fascinating journey. [...]... INTRODUCTION 1 Econometrics informing natural resources management: introducing the book Phoebe Koundouri The increasing scarcity of natural resources (in terms of quantity and quality) is one of the most pervasive allocation issues facing development planners throughout the world The need for sustainable management of these valuable resources has become a critical policy concern Econometrics is a... is a tool that can inform and facilitate such management However, it is only recently that natural resource management has attracted the attention and interest of a critical mass of applied econometricians This volume outlines the fundamental principles and difficulties that characterize the challenging task of using econometrics to inform natural resource management policies and illustrates them through... of the art in the area of Econometrics applied to Environmental and Natural Resource Management The selection of contributions and referee process opted for a wide range of econometric techniques that can be used to inform natural resource management, while keeping a balance between methods and applications Applications concern atmospheric carbon reduction, water resource management, wildlife, crop... in crop diversity conservation and fisheries management, as well as characterization of irrigation water demand under uncertainty Finally, Part IV of the book introduces recent advances in the use of econometrics applied to natural resource management These include advances relevant to the valuation literature, as well as to the more general environmental management literature In particular, this final... stochasticity and resulting Introducing the book 5 risk are inherent in most problems of natural resource and environmental management Part III of the book focuses on the challenges that face econometricians when faced with the difficult task of assessing demand and supply attributes of stocks and flows of natural resources when these are used as inputs in a stochastic production process Applications concern... outcomes can also be thought of as efficient The rest of the book is divided into four parts Part I, focuses on the static and dynamic estimations of the demand function for natural resources The applications concern water resources management and allocation in the industrial and residential sectors In particular, the first application concerns water pricing reforms in the manufacturing sector of a developing... water in an EU member state Given the public good characteristics and externalities inherent in the nature and allocation of most natural resources and environmental services, quite often their demand needs to be retrieved in the absence of an underlying market where these resources are traded Part II of the book focuses on methods that can be employed to measure willingness to pay (WTP) for flows and... proscription of specific uses provided that mechanisms are instituted to tap the willingness to pay for such proscriptions The chapter by Georgiou et al also focuses on valuation of natural resources through survey methods and follows naturally on from Swanson and Kontoleon’s work In particular, the method used is contingent ranking (Smith and Desvousges, 1986), which is a survey-based technique designed to... application, they find the presence of inflexion points in the irrigation water demand curve and analyse the effects of this result in terms of policy analysis PART IV: RECENT ADVANCES IN ECONOMETRICS METHODS APPLIED TO NATURAL RESOURCE MANAGEMENT Part IV of the book is introduced by Bateman and Jones, who present a variety of meta analysis1 models of woodland recreation benefit estimates, Introducing the book... Production Functions and Econometric Implications’, Journal of Econometrics, 7, 67–86 Kenyon, W., and Edward-Jones, G (1998), ‘What Level of Information Enables the Public to Act like Experts when Evaluating Ecological Goods?’, Journal of Environmental Planning and Management, 41 (4), 463–75 Li, C.Z., and Lofgren, K.G (2000), ‘Renewable Resources and Economic Sustainability: A Dynamic Analysis with . Backland Econometrics Informing Natural Resources Management Selected Empirical Analyses Phoebe Koundouri Econometrics Informing Natural Resources Management Selected. h1" alt="" 1. Econometrics informing natural resources management: introducing the book Phoebe Koundouri The increasing scarcity of natural resources (in