Laboratoire d'Économie des Ressources Naturelles

What preferences will prevail in a society of rational individuals when preference evolution is driven by the resulting payoffs? We show that when individuals' preferences are their private information, a convex combination of selfishness and morality stands out as evolutionarily stable. We call individuals with such preferences homo moralis. At one end of the spectrum is homo oeconomicus, who acts so as to maximize his or her own payoff. At the opposite end is homo kantiensis, who does what would be “the right thing to do,” in terms of payoffs, if all others would do likewise. We show that the stable degree of morality—the weight placed on the moral goal—is determined by the degree of assortativity in the process whereby individuals are matched to interact.

The income elasticity of the value per statistical life (VSL) is an important parameter for policy analysis. Mortality risk reductions often dominate the quantified benefits of environmental and other policies, and estimates of their value are frequently transferred across countries with significantly different income levels. U.S. regulatory agencies typically assume that a 1.0 percent change in real income over time will lead to a 0.4 to 0.6 percent change in the VSL. While elasticities within this range are supported by substantial research, they appear nonsensical if applied to populations with significantly smaller incomes. When transferring values between high and lower income countries, analysts often instead assume an elasticity of 1.0, but the resulting VSL estimates appear large in comparison to income. Elasticities greater than 1.0 are supported by research on the relationship between long-term economic growth and the VSL, by cross-country comparisons, and by new research that estimates the VSL by income quantile. Caution is needed when applying these higher elasticities, however, because the resulting VSLs appear smaller than expected future earnings or consumption in some cases, contrary to theory. In addition to indicating the need for more research, this comparison suggests that, in the interim, VSL estimates should be bounded below by estimates of future income or consumption.

A better understanding of household water use in developing countries is necessary to manage and expand water systems more effectively. Several meta-analyzes have examined the determinants of household water demand in industrialized countries, but little effort has been made to synthesize the growing body of literature evaluating household water demand in developing countries. This article reviews what is known and what is missing from that literature thus far. Analysis of demand for water in developing countries is complicated by abundant evidence that, contrary to what is observed in most developed countries, households in developing countries have access to, and may use more than one of several types of, water sources. The authors describe the different modeling strategies that researchers have adopted to estimate water demand in developing countries and discuss issues related to data collection. The findings from the literature on the main determinants of water demand in these countries suggest that, despite heterogeneity in the places and time periods studied, most estimates of own-price elasticity of water from private connections are in the range from -0.3 to -0.6, close to what is usually reported for industrialized countries. The empirical findings on decisions relating to household water sources are much less robust and should be a high priority for future research. © The Author 2009. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development/The World Bank. All rights reserved.

We assessed the influence of the Fukushima nuclear accident (FNA) on the Chinese public's attitude and acceptance of nuclear power plants in China. Two surveys (before and after the FNA) were administered to separate subsamples of residents near the Tianwan nuclear power plant in Lianyungang, China. A structural equation model was constructed to describe the public acceptance of nuclear power and four risk perception factors: knowledge, perceived risk, benefit, and trust. Regression analysis was conducted to estimate the relationship between acceptance of nuclear power and the risk perception factors while controlling for demographic variables. Meanwhile, we assessed the median public acceptable frequencies for three levels of nuclear events. The FNA had a significant impact on risk perception of the Chinese public, especially on the factor of perceived risk, which increased from limited risk to great risk. Public acceptance of nuclear power decreased significantly after the FNA. The most sensitive groups include females, those not in public service, those with lower income, and those living close to the Tianwan nuclear power plant. Fifty percent of the survey respondents considered it acceptable to have a nuclear anomaly no more than once in 50 y. For nuclear incidents and serious incidents, the frequencies are once in 100 y and 150 y, respectively. The change in risk perception and acceptance may be attributed to the FNA. Decreased acceptance of nuclear power after the FNA among the Chinese public creates additional obstacles to further development of nuclear power in China and require effective communication strategies.

International audience

The sustainability of agro-ecosystems depends on their ability to deliver an entire package of multiple ecosystem services, rather than provisioning services alone. New social and ecological dimensions of agricultural management must be explored in agricultural landscapes, to foster this ability. We propose a social–ecological framework for the service-based management of agro-ecosystems, specified through an explicit and symmetric representation of the ecosystem and the social system, and the dynamic links between them. It highlights how management practices, with their multiple effects, could drive the provision of multiple services. Based on this framework, we have identified the design of collective multiservice management as a key research issue. It requires innovations in stakeholder organizations and tools to foster synergy between ecosystem functioning and social dynamics, given the complexity and uncertainties of ecological systems.

As traditionally conducted, benefit-cost analysis is rooted in neoclassical welfare economics, which, in its most simplified form, assumes that individuals act rationally and are primarily motivated by self-interest, making decisions that maximize their welfare. Its conduct is evolving to reflect recent work in behavioral economics, which explores the psychological aspects of decisionmaking. We consider several implications for analyses of social programs, focusing largely on economic valuation. First, benefit-cost analysis often involves valuing nonmarket outcomes such as reductions in health and environmental risks. Behavioral research emphasizes the need to recognize that these values are affected by psychological as well as physical attributes. Second, benefit-cost analysis traditionally uses exponential discounting to reflect time preferences, while behavioral research suggests that individuals’ discounting may be hyperbolic. While the appropriate rates and functional form are uncertain, market rates best represent the opportunity costs associated with diverting funds to support a particular social policy or program. Such rates reflect the intersection between technological progress and individual preferences, regardless of whether these preferences fit the standard economic model or a behavioral alternative. Third, behavioral research emphasizes the need to consider the influence of other-regarding preferences on valuation. In addition to acting altruistically, individuals may act reciprocally to reward or punish others, or use the status of others as the baseline against which to assess their own well-being. Fourth, behavioral economics identifies factors that can help researchers develop valuation studies that provide well-informed, thoughtful preferences. Finally, while behavioral research has led some to argue for a more paternalistic approach to policy analysis, an alternative is to continue to focus on describing the preferences of those affected by the policy options while working to ensure that these preferences are based on knowledge and careful reflection. Benefit-cost analysis can be best viewed as a pragmatic framework for collecting, organizing, and evaluating relevant information.

A seller can trade an endowment of a perfectly divisible good, the quality of which she privately knows. Buyers compete by offering menus of nonexclusive contracts, so that the seller can privately trade with several buyers. In this setting, we show that an equilibrium exists under mild conditions and that aggregate equilibrium allocations are generically unique. Although the good for sale is divisible, in equilibrium the seller ends up trading her whole endowment or not trading at all. Trades take place at a price equal to the expected quality of the good, conditional on the seller being ready to trade at that price. Our model thus provides a novel strategic foundation for Akerlof's (1970) results. It also contrasts with competitive screening models in which contracts are assumed to be exclusive, as in Rothschild and Stiglitz (1976). Latent contracts that are issued but not traded in equilibrium play an important role in our analysis.

Using data from the International Benchmarking NETwork database, the authors estimate measures of density and scale economies in the water industry in four countries (Brazil, Colombia, Moldova, and Vietnam) that differ substantially in economic development, piped water and sewerage coverage, and characteristics of the utilities operating in the different countries. They find evidence of economies of scale in Colombia, Moldova, and Vietnam, implying the existence of a natural monopoly. In Brazil the authors cannot reject the null hypothesis of constant returns to scale. They also find evidence of economies of customer density in Moldova and Vietnam. The results of this study show that the cost structure of the water and wastewater sector varies significantly between countries and within countries, and over time, which has implications for how to regulate the sector

OBJECTIVES: Population-based HIV testing surveys have become central to deriving estimates of national HIV prevalence in sub-Saharan Africa. However, limited participation in these surveys can lead to selection bias. We control for selection bias in national HIV prevalence estimates using a novel approach, which unlike conventional imputation can account for selection on unobserved factors. METHODS: For 12 Demographic and Health Surveys conducted from 2001 to 2009 (N=138 300), we predict HIV status among those missing a valid HIV test with Heckman-type selection models, which allow for correlation between infection status and participation in survey HIV testing. We compare these estimates with conventional ones and introduce a simulation procedure that incorporates regression model parameter uncertainty into confidence intervals. RESULTS: Selection model point estimates of national HIV prevalence were greater than unadjusted estimates for 10 of 12 surveys for men and 11 of 12 surveys for women, and were also greater than the majority of estimates obtained from conventional imputation, with significantly higher HIV prevalence estimates for men in Cote d'Ivoire 2005, Mali 2006 and Zambia 2007. Accounting for selective non-participation yielded 95% confidence intervals around HIV prevalence estimates that are wider than those obtained with conventional imputation by an average factor of 4.5. CONCLUSIONS: Our analysis indicates that national HIV prevalence estimates for many countries in sub-Saharan African are more uncertain than previously thought, and may be underestimated in several cases, underscoring the need for increasing participation in HIV surveys. Heckman-type selection models should be included in the set of tools used for routine estimation of HIV prevalence.

In the estimation of production functions, ignoring risk considerations can cause inefficient estimates, while biased parameter estimates arise in the presence of sample selection. In the presence of uncertainty and selection bias, the latter introduced by the endogeneity of qualitative characteristics of inputs in crop choice, we show that correcting for risk considerations (a la Just and Pope, 1978, 1979) but not selection bias, can produce incorrect inferences in terms of risk behavior. The arguments raised in this study have estimation and policy implications for stochastic production analysis applied to all goods whose qualitative characteristics can affect sample selection.

Expert judgment (or expert elicitation) is a formal process for eliciting judgments from subject-matter experts about the value of a decision-relevant quantity. Judgments in the form of subjective probability distributions are obtained from several experts, raising the question how best to combine information from multiple experts. A number of algorithmic approaches have been proposed, of which the most commonly employed is the equal-weight combination (the average of the experts' distributions). We evaluate the properties of five combination methods (equal-weight, best-expert, performance, frequentist, and copula) using simulated expert-judgment data for which we know the process generating the experts' distributions. We examine cases in which two well-calibrated experts are of equal or unequal quality and their judgments are independent, positively or negatively dependent. In this setting, the copula, frequentist, and best-expert approaches perform better and the equal-weight combination method performs worse than the alternative approaches.

Many public policies and private actions affect the risk of injury, illness, or death, yet changes in these risks are not easily valued using market prices. We discuss how to value these risk reductions in the context of benefit-cost analysis. We begin with a pragmatic focus, describing the analytic framework and the approaches currently used for valuation, including estimates of willingness to pay, cost of illness, and monetized quality-adjusted life years. We then turn to some conceptual issues that illustrate areas in need of further exploration.

Que sait-on aujourd'hui des impacts, positifs et négatifs, de l’agriculture sur la biodiversité ? Quels services la biodiversité peut-elle apporter à l’agriculture, et à quelle hauteur de performance ? Comment favoriser au champ les synergies entre agriculture et biodiversité ? Quels instruments de politiques publics, économiques et juridiques, faut-il mettre en place pour promouvoir ces interactions ? Ces questions ont mobilisé un groupe pluridisciplinaire d’experts (écologues, agronomes, microbiologistes, spécialistes de santé végétale, économistes, juristes, sociologues), de différentes institutions (Inra, CNRS, IRD, Universités, Ecoles supérieures agronomiques) en France et à l’étranger

Decentralized decision making and lack of regulation lead to the existence of significant differences in the price of water for residential uses among Spanish cities. Why do these differences persist? Do they have to do with cost differentials or do they result from political and business interests? Can users perceive water tariffs as fair or is there unfairness among citizens when it comes to the access to water? We find that some of the differences are due to arbitrary decisions made by policy and business decision makers, so it is recommended that a regulation be adopted that sets criteria for guidance in tariff design, especially for lower levels of consumption within which water is considered a merit good.

In this paper, we show that the rate structure endogeneity may result in a misspecification of the residential water demand function. We propose to solve this endogeneity problem by estimating a probabilistic model describing how water rates are chosen by local communities. This model is estimated on a sample of Canadian local communities. We first show that the pricing structure choice reflects efficiency considerations, equity concerns, and, in some cases, a strategy of price discrimination across consumers by Canadian communities. Hence estimating the residential water demand without taking into account the pricing structures' endogeneity leads to a biased estimation of price and income elasticities. We also demonstrate that the pricing structure per se plays a significant role in influencing price responsiveness of Canadian residential consumers.

ABSTRACT Predicting residential water demand for non-connected households that obtain connections is a crucial issue for water planners in developing countries. We propose a technique derived from Heckman (1976) to accurately measure the expected increase in water use due to access to tap water while controlling for differences in characteristics between connected and non-connected households. Illustration is made on a cross section of 246 households from Dakar, Senegal. We show that getting a tap connection induces an expected increase in water use of 26 L per capita per day.

The monetized value of avoided premature mortality typically dominates the calculated benefits of air pollution regulations; therefore, characterization of the uncertainty surrounding these estimates is key to good policymaking. Formal expert judgment elicitation methods are one means of characterizing this uncertainty. They have been applied to characterize uncertainty in the mortality concentration-response function, but have yet to be used to characterize uncertainty in the economic values placed on avoided mortality. We report the findings of a pilot expert judgment study for Health Canada designed to elicit quantitative probabilistic judgments of uncertainties in Value-per-Statistical-Life (VSL) estimates for use in an air pollution context. The two-stage elicitation addressed uncertainties in both a base case VSL for a reduction in mortality risk from traumatic accidents and in benefits transfer-related adjustments to the base case for an air quality application (e.g., adjustments for age, income, and health status). Results for each expert were integrated to develop example quantitative probabilistic uncertainty distributions for VSL that could be incorporated into air quality models.

This paper investigates the relationship between voluntary participation in environmental organisations and the justifiability of littering behaviour. Previous empirical work regarding determinants of littering and littering behaviour remains scarce, particularly in socio-economic analysis. We address these deficiencies, demonstrating a strong empirical link between environmental participation and reduced public littering in the European Values Survey (EVS) data for 30 Western and Eastern European countries. The results suggest that membership in environmental organisations is related to a stronger commitment to anti-littering behaviour, thereby supporting improved environmental quality.

Abstract The paper focuses on the signaling value of a tax when agents are less informed than the government on the effect of their consumption. The policy making process is analyzed as a game in which the government wants to influence consumers' behaviors through tax policy, consumers being rational and Bayesian. The marginal cost of public funds induces the government to provide biased information to pursue budgetary objectives. We analyze the tax distortion that is required for credibility.