Economics of Environmental Policy to Protect Human Health

ECONOMICS OF ENVIRONMENTAL POLICY TO PROTECT HUMAN HEALTH

Sponsoring Institution

National Institute of Food and Agriculture

Project Status

COMPLETE

Funding Source

HATCH

Reporting Frequency

Annual

Accession No.

0182511

Grant No.

(N/A)

Cumulative Award Amt.

(N/A)

Proposal No.

(N/A)

Multistate No.

(N/A)

Project Start Date

Oct 1, 2012

Project End Date

Sep 30, 2017

Grant Year

(N/A)

Program Code

[(N/A)]- (N/A)

Recipient Organization
UNIV OF MINNESOTA
(N/A)
ST PAUL,MN 55108

Performing Department
Applied Economics

Non Technical Summary
Air pollution kills people. According to estimates by the Environmental Protection Agency, the Cross-State Air Pollution Rule (CSAPR) that was finalized in 2011 will, by itself, prevent as many as 34,000 premature deaths annually. This rule requires reductions in SO2 and NOx emissions from U.S. power plants. The EPA estimates that the monetary benefit of this one rule will be as high as $280 billion annually. The cost of meeting the new air-quality standards will be $2.4 billion. The stakes involved in air-pollution policy are high. Recent findings regarding the relationship between pollution and human health indicate that the marginal benefit to reductions in some air pollutants, including fine particulates, is actually increasing in abatement. If this is true, the optimal level of pollution might be the minimum achievable level. And economists received wisdom regarding the best way to conduct economic analyses of environmental policy might be off base. If the textbook framework for environmental policy is wrong, new tools for studying the problem are needed. I propose to consider the case of upward-sloping marginal benefits. A growing empirical literature on the health effects of particulates and other pollutants suggests that marginal benefits may indeed increase as abatement rises. If marginal benefits slope upward, and if the curve intersects marginal costs from above, for the case in which marginal costs are uncertain it is always true that an optimal price policy strictly dominates an optimal quantity policy. If the curve intersects marginal costs from below, on the other hand, unusual things can happen. Without uncertainty the optimal policy, whether quantity or price, is extreme in nature: either zero abatement or complete abatement maximizes social welfare. With uncertain costs, things become stranger still. Even for the simplest case, with linear marginal benefits and costs, the optimal price policy is sometimes discontinuous in the level of uncertainty. In short, corners and discontinuities abound and the economists instincts about the comparison between price and quantity instruments, from the extant literature, are overturned: a quantity policy is never superior to the optimal price policy. Evidence for the increasing relationship between abatement and marginal benefits (or, equivalently, for a strictly concave exposure-response function) can be found in a growing number of places. One such place is the literature on occupational health risks, where several recent studies indicate this finding. To scientific specialists, this relationship is not anomalous at all. Recent theoretical work by the proposer and others shows that, when marginal benefits are increasing in abatement, the optimal environmental policy is surprisingly complicated. That paper is the start of a more extensive project, proposed here, aimed at understanding the full implications of the unusual relationship between abatement and benefits that are suggested in the recent literature on environmental health. Further theoretical work, accompanied by empirical investigations, will be the main focus of the proposed research.

Animal Health Component

(N/A)

Research Effort Categories

Basic

(N/A)

Applied

(N/A)

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
133	6110	3010	20%
141	6110	3010	30%
605	6110	3010	25%
723	6110	3010	25%

Knowledge Area
133 - Pollution Prevention and Mitigation; 605 - Natural Resource and Environmental Economics; 723 - Hazards to Human Health and Safety; 141 - Air Resource Protection and Management;

Subject Of Investigation
6110 - Economy of the United States and sectors thereof;

Field Of Science
3010 - Economics;

Keywords

environmental health

prices vs. quantities

environmental policy

Goals / Objectives
1. Examine the effect of increasing uncertainty on the recommendations of Weitzman (1974) for the usual case in which marginal benefits are downward sloping. 2. For a multi-city model of pollution concentrations, determine the optimal environmental policy for control of pollution spatially. 3. Determine the optimal environmental policy when the regulator (the EPA) can learn, in Bayesian fashion, about the true cost of abatement by manipulating the tax on emissions.

Project Methods
The theoretical methods aimed at objective 1 involve a mathematical model of pollution control. Assume that marginal benefits and marginal costs are linear in abatement, with uniform uncertainty on the intercept of marginal costs and both functions increasing in abatement. The quantity-setting regulators optimal decision rule is to set the quantity of abatement where marginal benefits equal expected marginal costs. The tax-setting regulator must account for the fact that the industrys abatement response to the tax depends upon the true value of uncertainty u. The regulators optimization problem, for the linear-uniform situation, is the integral of the difference between marginal benefits and marginal costs. This integral is nondifferentiable. But it can be broken down into differentiable pieces over the intervals of possible tax levels between the kinks in abatement response. The study of optimal policy will proceed from the two problems given above for the quantity-setting and the price-setting regulators. The first component of the research will be aimed at understanding the way in which increasing uncertainty affects the comparison between price and quantity policies. Weitzmans (1974) recommendation about whether a price or quantity policy is preferred is sometimes wrong. The study of a multi-city model of pollution control will be based upon the policy to control fine particulate emissions. It will include a model of many heterogeneous cities or regions, with abatement cost functions different for each and with varying smoking rates. The model will be calibrated to available data, perhaps from Muller and Mendelsohn (2009). A solution to the calibrated model will tell us how the limit on concentrations should be determined in each region. This solution will show how overall pollution levels should be set. The study of optimal learning by an environmental regulator who has an imperfect understanding of the costs and benefits of abatement will be based upon two main strands of literature. One flows from Beck and Wieland (2002), and it examines the best way for a regulatory agency to learn about the uncertainty in the abatement cost function. Here, the environmental regulator will be able to learn about the true underlying cost function by manipulating an emissions tax over time. This strategy will create losses in the short term as the policy is set incorrectly. It will create gains in the long term, though, as the regulator learns more about the cost function and so is able to set policy more accurately in later periods. The second flows from Kelly and Kolstad (1999), who study the problem facing a regulator who learns passively, but again in a Bayesian sense, about the true underlying relationship between abatement and benefits. In Kelly and Kolstads approach, the regulator receives information over time about the correct relationship between abatement and benefits. This appears to be the way that information about pollution benefits is generated, mostly because of new scientific results regarding the health response to pollution. As new information about benefits arrives, the policy can be adjusted to align with that information.

Progress 10/01/12 to 09/30/17

Outputs
Target Audience:Scientists and other scholars engaged in research related to air pollution and human health. Policymakers charged with implementing environmental policy to control air pollution. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?I have presented my research at a number of academic conferences. I have also presented results in seminars at the U.S. EPA and at a number of academic departments. As a result of the work I conducted under this project, I was also invited to be part of a large EPA-funded grant project that is under way and will lead to several more published articles. How have the results been disseminated to communities of interest?Primary approaches to disseminating my results have been through publication of research papers in peer-reviewed journals and through presentations at conferences and invited seminars. I also delivered lectures to the U.S. EPA in Washington DC and to the research staff at the Chicago regional office of the EPA. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? My study of the problem of the relative merits of a pollution tax and a cap-and-trade policy for pollution control led to an article (Goodkind and Coggins, 2015) in the top environmental economics journal, theJournal of Environmental Economics & Management. In that paper we argued that it is sometimes the case that the optimal level of pollution is zero, in which case the usual comparison, based on Weitzman's 1974 paper, can be reversed. My work on the spatial aspects of pollution has led to a number of papers in leading economics journals and some science journals as well. One paper (Goodkind, Coggins, and Marshall, 2014), appeared in the Journal of the Association of Environmental and Resource Economists, and showed that when the concentration-response function relating particle pollution to human health has unusual curvature, the policy recommendations for air pollution can be overturned. Another (Burnett et al.,2018), inProceedings of the Natural Academy of Sciences, reported on a new and improved statistical analysis of that C-R function. Yet another (Goodkind et al., 2019), which recently appeared inPNAS, estimatedthe monetary damages due to air pollution around the U.S. Our results indicate that the damages due to human health from particle pollution range as high as several hundred thousand dollars per ton.

Publications

Type: Journal Articles Status: Published Year Published: 2018 Citation: Burnett, Richard, Hong Chen, Mietek Szyszkowicz, Neal Fann, Bryan Hubbell, C. Arden Pope III, Joshua S. Apte, Michael Brauer, Aaron Cohen, Scott Weichenthal, Jay Coggins, Qian Di, Bert Brunekreef, Joey Frostad, Stephen S. Lim, Haidong Kan, Katherine D. Walker, George Thurston, Richard B. Hayes, Chris C. Lim, Michelle C. Turner, Michael Jerrett, Daniel Krewski, Susan M. Gapstur, W. Ryan Diver, Bart Ostro, Debbie Goldberg, Dan L. Crouse, Randall V. Martin, Paul Peters, Lauren Pinault, Michael Tjepkema, Aaron van Donkelaar, Paul J. Villeneuve, Anthony B. Miller, Peng Yin, Maigeng Zhou, Lijun Wang, Nicole A.H. Janssen, Marten Marra, Richard W. Atkinson, Hilda Tsang, Thuan Quoc Thach, John B. Cannon, Ryan T. Allen, Jaime E. Hart, Francine Laden, Giulia Cesaroni, Francesco Forastiere, Gudrun Weinmayr, Andrea Jaensch, Gabriele Nagel, Hans Concin, Joseph V Spadaro , "Global Mortality and Long-Term Ambient Exposure to Fine Particulate Matter: a New Relative Risk Estimator," Proceedings of the National Academy of Sciences, 2018.
Type: Journal Articles Status: Under Review Year Published: 2018 Citation: Goodkind, Andrew L., Christopher W. Tessum, Jay S. Coggins, Jason D. Hill, and Julian D. Marshall, "Fine-scale, location-specific damage estimates of fine particulate matter pollution in the United States," 2018, under review.
Type: Journal Articles Status: Published Year Published: 2018 Citation: Coggins, Jay S., Andrew L. Goodkind, Jason (Quang) Nguyen, and Zhiyu Wang, "Price Effects, Inefficient Environmental Policy, and Windfall Profits," Environmental and Resource Economics, 2018, 1-20.

Progress 10/01/15 to 09/30/16

Outputs
Target Audience: Nothing Reported Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?I am advising four Ph.D. students, one of whom is finishing her degree in 2017. How have the results been disseminated to communities of interest?I gave multiple public lectures on the topic of climate change. I have also submitted papers to academic journals for eventual dissemination in the scientific literature. What do you plan to do during the next reporting period to accomplish the goals?Continued work on these lines of research will produce more articles in the coming year.

Impacts
What was accomplished under these goals? We completed a paper that examines conditions under which a new or tighter restriction on emissions from a competitive polluting industry causes profits in the industry to rise. Windfall profits may arise when a quantity restriction on emissions causes output to fall and, therefore, output price to rise. It may also arise when the required reduction in output causes the price of a polluting input to fall. A welfare-maximizing regulator who neglects price effects will require more than the optimal level of abatement. We conclude that any analysis ignoring price effects, as many have done, might produce unreliable guidance for environmental policymakers. We have also completed a paper on Spatially-Explicit Marginal and Total Damages of Emissions of Fine Particulate Matter (PM2.5) and its Precursors in the United States.

Publications

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:Scientists and other scientists engaged in research related to air pollution and human health. Policymakers charged with implementing environmental policy to control air pollution. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Invitations to present research at invited seminars and professional conferences have led to dissemination of my work. How have the results been disseminated to communities of interest?Through invited seminars, presentations at professional conferences, and publications in peer-reviewed scholarly journals. What do you plan to do during the next reporting period to accomplish the goals?I will continue conducting research and writing and publishing articles and presenting my work at professional conferences.

Impacts
What was accomplished under these goals? Several papers were completed and have been either published, accepted for publication, or submitted to peer-reviewed journals. In addition, several of these papers were presented at invited seminars and professional conferences.

Publications

Type: Conference Papers and Presentations Status: Accepted Year Published: 2015 Citation: Coggins, Jay S., "On the Impossibility of Water-Quality Trading," American Applied Economics Association, San Francisco, CA, July 27, 2015.
Type: Conference Papers and Presentations Status: Accepted Year Published: 2015 Citation: Coggins, Jay S., "Fine Particulate Pollution and Human Health: Economics, Epidemiology, and Policy," Western Economics Association International, Honolulu, HI, June 30, 2015.
Type: Conference Papers and Presentations Status: Accepted Year Published: 2015 Citation: Coggins, Jay S., A. Goodkind, J. Nguyen, and B. Wang, "Price Effects and Windfall Environmental Profits," Midwest Economics Association, Minneapolis, MN, March 28, 2015.
Type: Journal Articles Status: Published Year Published: 2015 Citation: Marshall, Julian D., Joshua S. Apte, Jay S. Coggins, and Andrew L. Goodkind, "Blue Skies Bluer?" Environmental Science & Technology, 49 (2015), 13929-13936.
Type: Journal Articles Status: Published Year Published: 2015 Citation: Goodkind, Andrew L. and Jay S. Coggins, "The Weitzman Price Corner," Journal of Environmental Economics and Management, 73 (2015), 1-12.
Type: Journal Articles Status: Published Year Published: 2015 Citation: Konishi, Yoshifumi, Jay S. Coggins, Bin Wang, "Water Quality Trading: Can We Get the Prices of Pollution Right?" Water Resources Research, 51 (2015), 1-19.
Type: Journal Articles Status: Published Year Published: 2015 Citation: Pope, C. Arden III, Maureen Cropper, Jay S. Coggins, and Aaron Cohen, "Health Benefits of Air Pollution Abatement Policy: Role of the Shape of the Concentration-Response Function," Journal of the Air & Waste Management Association, 65:5 (2015), 516-522.
Type: Journal Articles Status: Submitted Year Published: 2016 Citation: Coggins, Jay S., Andrew L. Goodkind, Jason (Quang) Nguyen, and Zhiyu Wang, "Price Effects and Windfall Environmental Profits," Journal of Environmental Economics and Management, January 2016.
Type: Journal Articles Status: Submitted Year Published: 2016 Citation: Aultman, Stephen, Jay S. Coggins, and Terrence M. Hurley, "An Insurance Mechanism for Public Goods Under Uncertainty," Risk and Uncertainty.

Progress 10/01/13 to 09/30/14

Outputs
Target Audience: Scientists and other scientists engaged in research related to air pollution and human health. Policymakers charged with implementing environmental policy to control air pollution. Changes/Problems: No changes are anticipated. What opportunities for training and professional development has the project provided? Invitations to present research at invited seminars and professional conferences have led to dissemination of my work. How have the results been disseminated to communities of interest? Through invited seminars, presentations at professional conferences, and publications in peer-reviewed scholarly journals. What do you plan to do during the next reporting period to accomplish the goals? I will continue conducting research and writing and publishing articles and presenting my work at professional conferences.

Impacts
What was accomplished under these goals? Several papers were completed and have been either published, accepted for publication, or submitted to peer-reviewed journals. In addition, several of these papers were presented at invited seminars and professional conferences.

Publications

Type: Journal Articles Status: Under Review Year Published: 2014 Citation: Marshall, Julian D., Joshua S. Apte, Jay S. Coggins, and Andrew L. Goodkind, "Blue Skies Bluer?" under review, Environmental Research Letters, October 2014.
Type: Journal Articles Status: Accepted Year Published: 2015 Citation: C. Arden Pope III, Maureen Cropper, Jay Coggins, and Aaron Cohen, "Health benefits of air pollution abatement policy: Role of the shape of the concentration-response function," Journal of the Air & Waste Management Association, forthcoming 2014.
Type: Journal Articles Status: Under Review Year Published: 2014 Citation: Andrew L. Goodkind and Jay S. Coggins, "The Weitzman Price Corner," second review, Journal of Environmental Economics and Management.
Type: Conference Papers and Presentations Status: Accepted Year Published: 2014 Citation: Aultman, Stephen, Jay S. Coggins, Terry Hurley, "An Insurance Mechanism for Public Goods Under Uncertainty," presented at the Annual Meetings of the Risk Theory Society, Munich Germany, 2014.
Type: Conference Papers and Presentations Status: Accepted Year Published: 2014 Citation: Aultman, Stephen, Jay S. Coggins, Terry Hurley, "An Insurance Mechanism for Public Goods Under Uncertainty," presented at the Annual Meetings of the Midwest Economic Association, Chicago, 2014.
Type: Theses/Dissertations Status: Accepted Year Published: 2014 Citation: Goodkind, Andrew L., "Economics of Air Pollution: Policy, Mortality Concentration-Response, and Increasing Marginal Benefits of Abatement."
Type: Theses/Dissertations Status: Accepted Year Published: 2014 Citation: Bak, Nahyeon, "Putting a Price on Trash: Does Charging for Food Waste Reduce Total Waste? The Case of Korea."

Progress 01/01/13 to 09/30/13

Outputs
Target Audience: Scientists and other scholars engaged in research related to air pollution and human health. Policymakers charged with conducting environmental policy to control air pollution Changes/Problems: There have been no major changes in approach, except that I have not yet managed to make progress on the third proposed goal, the study of an environmental authority that can learn about abatement costs over time. This idea is incorporated in our simulation paper, but I have not yet devoted significant time to the question as it is posed in my proposal. What opportunities for training and professional development has the project provided? Invitations to lecture at various universities and professional conferences have been useful in training policymakers and others on the questions under investigation. How have the results been disseminated to communities of interest? Through working papers and through invited lectures and conferences. What do you plan to do during the next reporting period to accomplish the goals? I plan to continue submitting my scientific work to scholarly journals. I intend to present various papers at invited lectures and professional conferences.

Impacts
What was accomplished under these goals? (1) A paper examining the effect of increasing marginal benefits on the optimal environmental policy is under review at a scholarly journal. I presented this work at the University of Wisconsin in February, at Brigham Young University in March, at the EPA's Chicago office in May, and at the Minnesota Pollution Control Agency in September. (2) A manuscript is under review at a scholarly journal. This work was also described in my various invited and conference presentations.

Publications

Type: Journal Articles Status: Published Year Published: 2013 Citation: Brown, Ross N., Charles R. Blinn, Michael A. Kilgore, and Jay S. Coggins, "The Impact of Reserve Prices and Contract Length on Stumpage Bid Prices: An Empirical Assessment," Northern Journal of Applied Forestry, 30 (2013), 85-91
Type: Journal Articles Status: Published Year Published: 2012 Citation: Brown, Ross N., Michael A. Kilgore, Charles R. Blinn, Jay S. Coggins, "Barriers to Effective State Timber Sale Program Administration: A Qualitative Assessment," Journal of Forestry, July/August (2012), 249-256
Type: Journal Articles Status: Published Year Published: 2012 Citation: Brown, Ross N., Michael A. Kilgore, Charles R. Blinn, Jay S. Coggins, "State Timber Sale Programs, Policies, and Procedures: A National Assessment," Journal of Forestry, July/August (2012), 239-248
Type: Journal Articles Status: Under Review Year Published: 2013 Citation: Goodkind, Andrew L., Jay S. Coggins, Timothy A. Delbridge, Milda Irhamni, Justin Andrew Johnson, Suhyun Jung, Julian D. Marshall, Bijie Ren, Martha H. Rogers, Joshua A. Apte, "Prices vs. Quantities With Increasing Marginal Benefits," submitted to Environmental and Resource Economics, May 2013
Type: Journal Articles Status: Under Review Year Published: 2013 Citation: Marshall, Julian D., Joshua A. Apte, Jay S. Coggins, Andrew L. Goodkind, "Blue Skies Bluer," submitted to Environmental Health Perspectives, November 2013
Type: Journal Articles Status: Under Review Year Published: 2013 Citation: Konishi, Yoshifumi, Jay S. Coggins, Bin Wang, "Water Quality Trading: Can We Get the Prices of Pollution Right?" submitted to Natural Resource Modeling, 2013
Type: Journal Articles Status: Under Review Year Published: 2013 Citation: Goodkind, Andrew L., Jay S. Coggins, and Julian D. Marshall, "A Spatial Model of Air Pollution: the Impact of the Concentration-Response Function," submitted to Journal of the AERE, 2013
Type: Theses/Dissertations Status: Published Year Published: 2013 Citation: Zajicek, Michael, "Water Quality Trading on the Minnesota River: Lessons Learned from the Jordan Trading Unit," 2013
Type: Conference Papers and Presentations Status: Other Year Published: 2013 Citation: Konishi, Yoshifumi, Jay S. Coggins, Bin Wang, "Water Quality Trading: Can We Get the Prices of Pollution Right?" submitted to Natural Resource Modeling, AERE annual meeting, June 2013
Type: Conference Papers and Presentations Status: Other Year Published: 2013 Citation: "Environmental Policy With Increasing Marginal Benefits," presented at EPA Region 5 office, Chicago, May 2013
Type: Journal Articles Status: Under Review Year Published: 2013 Citation: Bael, David L., Jay S. Coggins, Lawrence A. Baker, Kristen Nelson, "Energy Poverty," submitted to Energy Policy, 2013
Type: Theses/Dissertations Status: Published Year Published: 2012 Citation: Creamer, Bernardo, "Adoption of Emissions Abating Technologies by U.S. Electricity Producing Firms Under the SO2 Emission Allowance Market," 2012

Progress 01/01/12 to 12/31/12

Outputs
OUTPUTS: Activities: Published a series of scholarly articles on the economics of the forest industry in Minnesota. Made significant progress on research project aimed at understanding the best way to control phosphorus pollution in Minnesota's rivers. Submitted one article, near completion on another. Made significant progress in understanding the best way to control particulate air pollution. Submitted two articles, near completion on two more. Made significant progress on a paper examining the windfall profits that can accrue to a polluting industry under the Clean Air Act and the Clean Water Act. Presented research in seminars and workshops at Iowa State University, Resources for the Future, the United States Department of Agriculture, the Environmental Protection Agency, and the annual meeting of the Canadian Resource and Environmental Economics Association. PARTICIPANTS: Dr. Julian Marshall is a faculty colleague in the university's Department of Civil Engineering. Joshua Marshall is a graduate student at Berkeley. Andrew Goodkind, Timothy Delbridge, Milda Irhamni, Justin Andrew Johnson, Suhyun Jung, Bijie Ren, and Martha H. Rogers are graduate students in my department. Dr. Yoshifumi Konishi is a faculty colleague at Sophia University in Japan and Bin Wang is a researcher at Penn State University. Dr. Michael Kilgore and Dr. Charles Blinn, are faculty colleagues in he Department of Forest Resources. Dr. Ross Brown is a former student of that department. TARGET AUDIENCES: Policy makers who help to monitor and control air and water pollution in Minnesota and across the nation. Also professional academic peers. For my outreach work, the target audience is the citizenry of the state. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Air pollution kills people. Recent epidemiological evidence suggests that the health risk due to fine particulates may be even greater than was thought previously. If the new evidence holds up, a wholesale rethinking of the economics of environmental policy will be required. Working with graduate students and with colleagues at the University of Minnesota and the University of California-Berkeley, I am engaged in a long-term project to evaluate environmental policy in light of the new environmental-health science. My work on water pollution is not quite as clearly related to human health, but water pollution is regarded as a serious problem too. Policies to control it, especially from nonpoint sources like agriculture, have shown modest success. Working again with students and with a colleague at Sophia University in Japan, I am attempting to understand the best ways to design water-quality policies.

Publications

Brown, Ross, Michael A. Kilgore, Charles R. Blinn, and Jay S. Coggins, "Barriers to Effective State Timber Sale Program Administration: A Qualitative Assessment," Journal of Forestry, 110 (2012) 249-256.
Brown, Ross, Michael A. Kilgore, Jay S. Coggins, and Charles R. Blinn, "The impact of timber-sale tract, policy, and administrative characteristics on state stumpage prices: An econometric analysis," Forest Policy and Economics, 21 (2012) 71-80.
Goodkind, Andrew L., Jay S. Coggins, Timothy A. Delbridge, Milda Irhamni, Justin Andrew Johnson, Suhyun Jung, Julian D. Marshall, Bijie Ren, Martha H. Rogers, and Joshua S. Apte, "Prices vs. Quantities with Increasing Marginal Benefits," submitted to Journal of Environmental Economics and Management, November 2012.
Brown, Ross, Charles R. Blinn, Michael A. Kilgore, and Jay S. Coggins, "A Paired-Bidding Analysis of Reserve Price and Contract Length Effects on Minnesota Stumpage Bids," submitted to Northern Journal of Applied Forestry, November 2012.
Marshall, Julian D., Joshua S. Apte, Jay S. Coggins, and Andrew L. Goodkind, "Blue Skies Bluer" submitted to Science, November 2012.
Konishi, Yoshifumi, Jay S. Coggins, and Bin Wang, "Water Quality Trading: CanWe Get the Prices of Pollution Right" to be submitted to Land Economics, January 20123

Progress 01/01/11 to 12/31/11

Outputs
OUTPUTS: Activities. Advised several graduate students on thesis research related to the economics of the environment. Published a series of papers on the economics of the forest industry. Completed papers on the use of market mechanisms for controlling environmental policy. I also presented several public lectures on the question of income inequality and published four commentary essays in local newspaper outlets. PARTICIPANTS: Dr. Mike Kilgore, Dr. Charlie Blinn, Dr. Randall Kolka, Dr. Ross Brown, Denys Goychuk are colleagues from the University of Minnesota's Department of Forest Resources. Other collaborators on my ongoing projects are all students or former students or faculty of the University of Minnesota. TARGET AUDIENCES: Policy makers with authority over Minnesota's environmental resources, and professional colleagues in the U.S. are the primary target audience. For my outreach work, the target audience is the citizenry of the state. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
The quality of our state's environmental resources, from air and water quality to the northern forests, is important to all Minnesota citizens. My work has led to new understanding of the best way to devise policies that achieve the aim of environmental protection. My outreach activities, in writing and public speaking, help to inform people about important concerns related to the performance of the economy.

Publications

Goychuk, D., M.A. Kilgore, C.R. Blinn, J. Coggins, and R.K. Kolka. 2011. The Effect of Timber Harvesting Guidelines on Felling and Skidding Productivity in Northern Minnesota. For. Science. 57:393-407.
Brown, R.N., M.A. Kilgore, J.S. Coggins, and C.R. Blinn. 2012. The Impact of Timber-Sale Tract, Policy, and Administrative Characteristics on State Stumpage Prices: An Econometric Analysis. For. Policy. DOI 10.1016/j.forpol.2011.10.001.

Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: Activities: Advised several Master's and Ph.D. students on dissertation research related to market-based environmental policy. Continued work on research related to market-based solutions to the problem of warming of the Vermillion River in suburban Minnesota. Began new papers related to environmental policy under uncertainty. Presented several lectures on the economics of climate change and the use of market-based solutions to reducing carbon emissions. Products: Continued development of a model for computing the effect of a trading system to allocate thermal loading on the Vermillion River. With co-authors, completed a draft of a paper on the use of water-quality trading to protect rivers from excess pollution. With a co-author, made significant progress on a paper related to the provision of environmental public goods in the presence of uncertainty. With a co-author, published a book chapter on the effects of agriculture and energy on Minnesota's water quality. PARTICIPANTS: Dr. Steven Taff, faculty, University of Minnesota. Co-author on Minnesota water quality paper. Bin Wang, former graduate student, Dept of Applied Economics, University of Minnesota, co-author on paper analyzing the performance of alternative water-quality trading policies. Yoshifumi Konishi, faculty, Sophia University, co-author on paper analyzing the performance of alternative water-quality trading policies. Stephen Aultman, graduate student, Department of Applied Economics, University of Minnesota, co-author on paper about the provision of public goods under uncertainty. TARGET AUDIENCES: Academic community and state and local environmental policymakers. Also the local development community and citizen groups. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Protecting the quality of the state's water resources is important for wildlife and for human health. Following on earlier work, the researcher is now preparing for publication two scholarly papers that demonstrate how trading can work on a river, and that contribute new insights to the literature on environmental policy related to water quality.

Publications

Coggins, J. and S. Taff, "Water-Quality Trading and the Effects of Agricultural and Energy Policy on Water Quality in Minnesota," in W. Easter and J. Perry, eds., Minnesota Water Policy: Dividing the Waters, 2010.

Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: Activities: Advised several Master's and Ph.D. students on dissertation research related to market-based environmental policy. Continued work on research related to market-based solutions to the problem of warming of the Vermillion River in suburban Minnesota. Began new papers related to environmental policy under uncertainty and the comparison of energy efficiency in China and the U.S. Presented several lectures on the economics of climate change and the use of market-based solutions to reducing carbon emissions. Products. Continued development of a model for computing the effect of a trading system to allocate thermal loading on the Vermillion River. With co-authors, completed and submitted for publication a paper on the economics of water diversion in the Sultan Marshes in Turkey. During the fall of 2008, the researcher worked with a group of experts to prepare and submit for funding a grant proposal to continue work on the Vermillion River project. PARTICIPANTS: Dr. Steven Taff, faculty, University of Minnesota. Co-researcher who has helped to develop the thermal trading model for the Vermillion project. Bin Wang, graduate student, Dept of Applied Economics, University of Minnesota, co-author on paper describing the thermal-trading program for the Vermillion River. TARGET AUDIENCES: Academic community and state and local environmental policymakers. Also the local development community and citizen groups. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Development pressure threatens the trout population in the Vermillion River in suburban Minnesota by causing the river's temperature to rise. Working with a larger team of scientists and economists, the researcher contributed to the creation of new knowledge about how best to design a temperature-trading program in the watershed. The primary challenges are incorporating advanced scientific information regarding land use, groundwater recharge, and surface water and energy flow into a spatial model of thermal changes in the river. The economics of the problem require accounting for all of these changes so that a new development, which causes thermal increases, can arrange offsetting activities, possibly off site, that mitigate thermal loading by an equal or greater amount. Following on earlier work that became part of the report, the researcher is now preparing for publication a scholarly paper that demonstrates how trading can work on a river, and contributing new insights to the related literature on environmental policy related to water quality.

Publications

Dadaser-Celika, F., J.S. Coggins, P.L. Brezonik, and H.G. Stefan, "The Projected Costs and Benefits of Water Diversion from and to the Sultan Marshes (Turkey)," Ecological Economics, 68(March 2009), 1496-1506.
Coggins, J. and S. Taff, "Water-Quality Trading and the Effects of Agricultural and Energy Policy on Water Quality in Minnesota," in W. Easter and J. Perry, eds., Minnesota Water Policy: Dividing the Waters, forthcoming 2010.

Progress 01/01/08 to 12/31/08

Outputs
OUTPUTS: Outputs: Activities. Advised several Ph.D. students on dissertation research related to market-based environmental policy. Advised a team of science researchers on the economics of a temperature-trading program for the Vermillion River. Served on the Minnesota Pollution Control Agency's Water Quality Trading Advisory Committee. Products. Developed, with co-researchers, a model for computing the effect of a trading system to allocate thermal loading on the Vermillion River. With co-authors, completed and submitted for publication a paper on the economics of water diversionin the Sultan Marshes in Turkey. During the fall of 2008, the researcher worked with a group of experts to prepare and submit for funding a grant proposal to continue work on the Vermillion River project. PARTICIPANTS: Participants: Dr. Steven Taff, faculty, University of Minnesota. Co-researcher who has helped to develop the thermal trading model for the Vermillion project. Dr. Yoshifumi Konishi, now Assistant Professor of Economics, Williams College. During Jan-July, helped to develop the thermal trading model for the Vermillionproject. Dr. Kim Chapman, Senior Ecologist, Applied Ecological Services. Co-researcher who has provided scientific data used as input for the thermal trading model for the Vermillion project. TARGET AUDIENCES: Target Audiences: Academic community and state and local environmental policymakers. Also the local development community and citizen groups. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Outcomes/Impacts: The Vermillion River in the southern Twin Cities is one of the premier urban trout streams in the U.S. Development pressure is causing its temperature to rise, which in turn threatens the trout population. Working with a larger team of scientists and economists, the researcher contgributed to the creation of new knowledge about how best to design a temperature-trading program in the watershed. The primary challenges are incorporating advanced scientific information regarding land use, groundwater recharge, and surface water and energy flow into a spatial model of thermal changes in the river. The economics of the problem require accounting for all of these changes so that a new development, which causes thermal increases, can arrange offsetting activities, possibly off site, that mitigate thermal loading by an equal or greater amount. The result of the study has been a set of recommendations to the Vermillion River Watershed Joint Powers Board regarding the best policy approach to keeping the river from warming to unacceptable levels.

Publications

Dadaser-Celika, F., Coggins, J., Brezonik, P., and Stefan, H. (2008). The Projected Costs and Benefits of Water Diversion from and to the Sultan Marshes (Turkey), Ecological Economics, forthcoming. Konishi, Y. and Coggins, J. (2008). Environmental Risk and Welfare Valuation Under Imperfect Information, Resource and Energy Economics, 30:150-169.

Progress 01/01/07 to 12/31/07

Outputs
OUTPUTS: Activities. Advised several Ph.D. students on dissertation research related to market-based environmental policy. Advised a team of science researchers on the economics of a temperature-trading program for the Vermillion River. Served on the Minnesota Pollution Control Agency's Water Quality Trading Advisory Committee. Events. Presented a paper entitled "Temperature Trading in the Vermillion River" at the 2007 Minnesota Water Resource Conference." Products. Developed, with co-researchers, a model for computing the effect of a trading system to allocate thermal loading on the Vermillion River. The results of this work are expected to lead to a program of temperature trading in the Vermillion River watershed, as a means of protecting a valuable trout fishery. PARTICIPANTS: Dr. Steven Taff, faculty, University of Minnesota. Co-researcher who has helped to develop the thermal trading model for the Vermillion River watershed project. Yoshifumi Konishi, Ph.D. student, University of Minnesota. Co-researcher who has helped to develop the thermal trading model for the Vermillion River watershed project. Dr. Kim Chapman, Senior Ecologist, Applied Ecological Services. Co- researcher who has provided scientific data used as input for the thermal trading model for the Vermillion River watershed project. TARGET AUDIENCES: Target audiences. Academic community and local and state environmental policymakers. Also local developers and landowners who will be affected by the Vermillion River watershed thermal trading program. Efforts. Regular meetings with scientists involved in the project at which the economic features of the proposed policy are explained. Also focus groups of local developers and landowners.

Impacts
The Vermillion River in the southern Twin Cities metropolitan area, is one of the premier urban trout streams in the U.S. Development pressure is causing its temperature to rise, which in turn threatens the trout population. Working with a larger team of scientists and economists, the researcher contributed to the creation of new knowledge of how best to design a temperature-trading program in the watershed. The primary challenges are incorporating advanced scientific information regarding land use, groundwater recharge, and surface water flow into a spatial model of thermal changes in the river. The economics of the problem require accounting for all of these changes so that a new development, which increases thermal loading into the river, can arrange offsetting activities, possibly off site, that mitigate thermal loading by an equal or greater amount. The resulting policy, which is expected to be adopted in 2008, will be the first of its kind that aims to control thermal runoff into an urban water stream. If the program is successful, it will contribute to preserving the resource and reducing the cost of doing so.

Publications

Konishi, Y. and Coggins, J.S. 2007. Environmental Risk and Welfare Valuation under Imperfect Information. Resource and Energy Economics, forthcoming 2007. Coggins, Jay S. 2007. Thermal Trading in a Local, State, and Federal Regulatory Context: The Vermillion River, published on the website of the Vermillion River Thermal Trading Program.

Progress 01/01/06 to 12/31/06

Outputs
I am engaged in two separate research projects related to the experiment station. The first, with a student named Yoshi Konishi, concerns the welfare economics of pollution-control policy when citizens are unaware of their personal exposure to the pollutant in question. The project on which Yoshi and I have worked this past year lays out a method for measuring environmental benefits in such a case. Our work is important because in many cases those who experience pollution are unaware of its presence in their water supply. Minnesota's water quality is generally quite good, but in some places certain water pollutants constitute a real threat. Understanding how people behave in the face of water-quality problems, and improving our ability to form policy when people are poorly informed of their environmental quality, can lead to significant improvements in their quality of life. The second, with Mr. Konishi and Steve Taff, concerns the trading of temperature rights to control the amount of heat that enters the Vermillion River, a trout stream in the south metro. This study involves a complex hydrological and soils model, on which we overlay an economic model to determine how a trading program might work. Development pressures in the Vermillion watershed have already compromised the stream as suitable habitat for brown trout. Our work will lead to policy prescriptions that could implement the first temperature-trading market of its kind in the country. Trading, we expect, will be between developers whose practices inevitably increase thermal loading in the stream, and surrounding landowners who could change their land use so as to reduce thermal loading. This innovative policy has the potential to reduce the cost of preserving the trout habitat, and will simultaneously preserve more open space in the region for recreation in the future.

Impacts
Citizens can be significantly affected by environmental quality, including the quality of drinking water. But in many cases, research has shown that people often do not realize that their drinking water is polluted. By developing a new method of analyzing the monetary effects of pollution in such cases, the project has made available an innovative technique for policy analysis. Many environmental problems have been and will be addressed using market-based instruments such as permit trading. Water quality, including water temperature, appears to be one application that would benefit from more focused policy analysis.

Publications

West, James, What Takes Me Out to the Ballgame: An Analysis of the Factors Influencing the National and Local Demand for Major League Baseball Games, University of Minnesota Ph.D. Dissertation, December 2006.
Behl, Ajay, A Framework for Analyzing the Impact of the Means-Tested Transfer Programs on Interfamily and Intrafamily Transfers and the Economy, University of Minnesota Ph.D. Dissertation, December 2006.

Progress 01/01/05 to 12/31/05

Outputs
Along with my administrative duties as director of our graduate programs, I am engaged in two separate research projects related to the experiment station. The first, with a student named Yoshi Konishi, concerns the welfare economics of pollution- control policy when citizens are unaware of their personal exposure to the pollutant in question. Economists have written a great deal on the best way to formulate environmental policy when individuals may be able to protect themselves from the pollution in question. People may choose to install a water filter, for example, to protect themselves from contaminated drinking water. Expenditures on this sort of self protection are used as a measure of the monetary benefits of improving water quality. But what if people are unaware of the pollution? They will not purchase the filter and it will appear that the benefit they would experience from clean-up is zero. But in fact it may be quite high. The project on which Yoshi and I have worked this past year lays out a method for measuring benefits in such a case. The second, with a former graduate student named Shunrong Qi, concerns the measurement of international economic performance, while accounting for environmental degradation. The project contains a significant conceptual advance, which makes possible new empirical work related to the measurement of economic efficiency across countries. Using a dataset for over 100 countries, consisting of output as well as labor and capital inputs, togehter with measures of three environmental-quality variables, we computed the degree to which environmental quality influences economic efficiency and performance. These results were used in turn to adjust gross domestic product (GDP) to arrive at a measure of green GDP. The difference between green GDP and standard GDP was dramatic in many cases, providing valuable insights into the way in which some countries produce high GDP numbers at the expense of their environmental quality.

Impacts
Citizens can be significantly affected by environmental quality, including the quality of drinking water. But in many cases, research has shown that people often do not realize that their drinking water is polluted. By developing a new method of analyzing the monetary effects of pollution in such cases, the project has made available an innovative technique for policy analysis. Economic policy is often informed by macroeconomic performance measures such as growth in GDP. This measure ignores the effect of environmental degradation. Our work contributes to the effort to modify GDP so as to account for changes in environmental quality and natural resource abundance.

Publications

Qi, Shunrong, "Efficiency, Productivity, National Accounts and Economic Growth with a Green View: Theory, Methodology and Applications," University of Minnesota Ph.D. Dissertation, April 2005.

Progress 01/01/04 to 12/31/04

Outputs
I am engaged in two separate research projects related to the experiment station. The first, with Professor Steve Taff and a graduate student, concerns the effect of local air pollution on residential property values and the related connection to the value of human health. We expect to complete a first paper from this project during the coming semester. The other is concerned with the effect of environmental degradation on international comparisons of productivity. Another project, concerning the effect of the U.S. farm bill on agricultural property values, is continuing.

Impacts
Local businesses are significantly affected by the federal Clean Air Act, as are residents who suffer the damages created by various kinds of air pollution. By measuring the effects of pollution on property values, and the portion of that effect that can be attributed to human health effects, I expect to be able to help local policy makers craft better environmental regulations. As the agricultural sector continues to change, with farm size increasing and farm numbers falling, towns and cities in outstate Minnesota are being changed dramatically. My work on the political economy of the farm bill can lead to a rethinking of federal agricultural policy in a way that could affect everyone involved with agriculture in the state.

Publications

Atella, V., J.S. Coggins, and C.F. Perali. 2004. Aversion to Inequality and its Determinants in Italy. Journal of Economic Inequality, Vol 2, No. 2.

Progress 01/01/03 to 12/31/03

Outputs
I am engaged in two separate research projects related to the experiment station. The first, in the early stages of development, has to do with the economic effect of local air pollution on residential property values and the related connection to the value of human health. A graduate student and I have begun to collect data for this project. We expect to conduct much of the analysis during the spring and summer of 2004. The other is concerned with the effect of environmental degradation on international comparisons of productivity. This project, also with a graduate student, is nearing completion and I anticipate submitting three research papers to refereed journals this semester. Another project, concerning the effect of the U.S. farm bill on agricultural property values, is continuing.

Impacts
Local businesses are significantly affected by the federal Clean Air Act, as are residents who suffer the damages created by various kinds of air pollution. By measuring the effects of pollution on property values, and the portion of that effect that can be attributed to human health effects, I expect to be able to help local policy makers craft better environmental regulations. As the agricultural sector continues to change, with farm size increasing and farm numbers falling, towns and cities in outstate Minnesota are being changed dramatically. My work on the political economy of the farm bill can lead to a rethinking of federal agricultural policy in a way that could affect everyone involved with agriculture in the state.

Publications

Moledina, A., Coggins, J.S., Polasky, S. and Costello, C. 2003. Dynamic Environmental Policy with Strategic Firms: Prices versus Quantities. Journal of Environmental Economics and Management. 45:2S, 356-376.
Coggins, J.S. and C.F. Perali. 2003. Voting for Equity: Estimating Society's Preferences Toward Inequality. Submitted to the European J. of Political Economy.
Atella, V., J.S. Coggins, and C.F. Perali. 2003. Aversion to Inequality and its Determinants in Italy. Submitted to the J. of Econ. Inequality.
Chavas, J.-P. and Coggins, J.S. 2003 On Fairness and Welfare Analysis Under Uncertainty, Social Choice and Welfare, 20:2, 203-228.

Progress 01/01/02 to 12/31/02

Outputs
During the past year my research energies related to the project have been devoted to a number of projects. A paper that I co-authored with three others was accepted for publication in the Journal of Environmental Economics and Management. Another, with Jean-Paul Chavas at Wisconsin, was accepted for publication in Social Choice and Welfare. A third, dealing with the properties of the U.S. sulfur dioxide program, was submitted to the Journal of Environmental Economics and Management. Two book chapters, one regarding the political economy of the farm bill and the other concerning the properties of permit markets for environmental pollution, were published. An extension of the paper on the farm bill is in progress, as is a more ambitious empirical study of the U.S. sulfur dioxide market. The former is aimed at measuring the true economic benefits of the farm bill, accounting for effects on land prices. The latter will place a dollar value on the benefits that could have been achieved if the sulfur dioxide allowance market had been designed in a more efficient way.

Impacts
Minnesota electric utilities are significantly affected by the Clean Air Act, as are residents who suffer the damages created by sulfur dioxide emissions. By detailing the ways in which the program may have been improved, my work will show what is possible. As the agricultural sector continues to change, with farm size increasing and farm numbers falling, towns and cities in outstate Minnesota are being changed dramatically. My work on the political economy of the farm bill can lead to a rethinking of federal agricultural policy in a way that could affect everyone involved with agriculture in the state.

Publications

Chavas, J.-P. and Coggins, J.S. 2003 (forthcoming) On Fairness and Welfare Analysis Under Uncertainty, Social Choice and Welfare.
Moledina, A., Coggins, J.S., Polasky, S. and Costello, C.. 2003 (forthcoming). Dynamic Environmental Policy with Strategic Firms: Prices versus Quantities. Journal of Environmental Economics and Management.
Coggins, J.S. and Rosato, P. 2002. Market-Based Mechanisms for Environmental Improvement, in M. Canavari, P. Caggiati, and K.W. Easter, Editors, Economic Studies on Agriculture and the Environment, pages 255--268.
Bullock, D. and Coggins, J.S. 2002. Do Farmers Receive Huge Rents for Small Lobbying Efforts? in L. Tweeten and S.R. Thompson, Editors, Agricultural Policy for the 21st Century, pp. 146--159.
Lee, J.H., Polasky, S. and Coggins, J.S. 2002. Marketable Emissions Permits with Large Firms: Bargaining and Efficiency. Submitted to the Journal of Environmental Economics and Management.

Progress 01/01/01 to 12/31/01

Outputs
The use of markets to control environmental quality is becoming more widespread, in the U.S. nd to a lesser exent around the world. While we are no longer involved with the Kyoto protocol, the U.S. has managed to introduce international markets for carbon emissions as a centerpiece of the agreement. Domestically, trading has begun for pollution rights along the Minnesota River. In water-poor sections of the country, talk of allocating water supplies through the use of markets continue to grow more common. My research in the past year has touched on several of these themes. In an article that will soon appear as a book chapter, my co-author and I described the U.S. experience with sulfur trading and outlined the potential for trading in Europe. A former student, Cynthia Morgan, completed a dissertation on the potential for permit trading to improve groundwater quality in Minnesota.. Currently, another student is working on a similar project. Along with Amyaz Moledina, another student, and others I wrote a largely theoetically paper that will soon appear in the leading journal on environmental economics. This paper compares the performance of taxes and permit markets for the control of pollution.

Impacts
My project will have its greatest impact through reducing the cost of achieving the state's and the country's environmental objectives.

Publications

Coggins, J.S. and Rosato, P. 2002. Market-Based Mechanisms for Environmentla Improvement, in M. Canavari, P. Caggiati, and K.W. Easter, Editors. Economic Studies on Agriculture and the Environment, pages 255-268.
Morgan, C.L., Coggins, J.S. and Eidman, V.R. 2000. Tradable Permits for Controlling Nitrates in Groundwater at the Farm Level: A Conceptual Model. Journal of Agricultural and Applied Economics. 32:249-258.
Moledina, A., Coggins, J.S., Polasky, S. and Costello, C. 2002. Dynamic Environmental Policy with Strategic Firms: Prices versus Quantities. Journal of Environmental Eonomics and Management.

Progress 01/01/00 to 12/31/00

Outputs
During the past year one of my graduate students, Robert Johansson, successfully defended his Ph.D. dissertation, which dealt with the problem of trading pollution permits for the control of phosphorus pollution in the Minnesota River. This project will yield one or two published papers within the next year. A paper with Cynthia Morgan, a student who completed her Ph.D. in 1999, and Vernon Eidman was published in August 2000. This paper, and Cynthia's dissertation, dealt with permit trading for control of groundwater nitrate pollution in Minnesota. I also presented a review paper, written with Paolo Rosato, at a conference in Bologna, Italy in June 2000. This paper provided a summary of permit-trading markets around the world. Another paper, written with Amyaz Moledina and Steve Polasky and dealing with the control of pollution in a dynamic setting, was submitted for publication.

Impacts
Market-based instruments for environmental control have the potential to reduce the cost of protecting environmental quality. This research project is aimed at furthering our understanding of such instruments, including for the control of sulfur dioxide and nitrates in groundwater.

Publications

Morgan, C.L., Coggins, J.S. and Eidman, V.R. 2000. Tradable Permits for Controlling Nitrates in Groundwater at the Farm Level: A Conceptual Model. J. Agr. Appl. Econ. Vol. 32.
Coggins, J.S. and Senauer, B. 1999. Innovation in Grocery Retailing. In Mowery, D.C., ed., Industry in 2000: Studies in Competitive Performance. (Washington D.C.: National Academy Press).
Coggins, J.S. and Perali, C.F. 1998. 64 pct -Majority Rule in Ducal Vencie: Voting for the Doge. Pub. Choice. 97:709-723.
Coggins, J.S. and Ramezani, R. 1998. An Arbitrage-Free Approach to Quasi-Option Value. J. Env. Econ. Mgmt. 34:103-125.
Coggins, J.S. and Swinton, J.R. 1996. The Price of Pollution: A Dual Approach to Valuing SO2 Allowances. J. Env. Econ. Mgmt. 30:58-72.
Chavas, J.-P. and Coggins, J.S. 2000. On Fairness and Welfare Analysis Under Uncertainty. Revised and resubmitted, at the editor's request, to Soc. Choice and Welfare.
Stinson, T.F., Coggins, J.S., and Ramezani, C.A. 2000. Was FAIR Fair to U.S. Corn Growers? Revised and resubmitted, at the editor's request, to the American J. Agr. Econ.
Moledina, A., Coggins, J.S., and Polasky, S. 2000. Dynamic Environmental Policy with Strategic Firms. Submitted to the J. Env. Econ. Mgmt.
Perali, C.F. and Coggins, J.S. 2000. Voting for Equity: Estimating Society's Preferences Toward Inequality. Submitted to the International Econ. Rev.

Progress 01/01/99 to 12/31/99

Outputs
Four individual projects are underway, at various stages of completion. The first concerns the optimal approach to environmental regulation in a dynamic and uncertain setting. The second concerns the comparison of carbon dioxide abatement costs across nations. The third concerns the use of permit-trading schemes for the control of groundwater nitrates. The fourth concerns the use of permit-trading schemes for the control of phosphorus in surface water. Economists have long been interested in the question of whether pollution taxes or direct quantity controls (usually via permit trading) are the preferred method of regulating pollution. In a paper with a graduate student I am studying this question in a dynamic setting in which firms are strategic, taking account of their behavior today on the details of the policy in future years. The paper has been presented at two professional conferences and in one departmental seminar. A new version is being prepared that will be submitted to a journal in the coming year. The work on cross-country comparisons of abatement costs is in the early stages. A research proposal is being prepared that would fund a graduate student. The approach we follow is to estimate a frontier production function in which emissions are treated as an input. The method will yield estimates of marginal abatement costs by country and will, we believe, lead to an improved measure of so-called green GDP. The two projects on the use of permit-trading schemes for non-point pollution problems are also joint with graduate students, one of whom completed her Ph.D. in 1999. (This project is also funded by a USDA NRI grant.) In both cases, the key component of the model is to take the physical problem seriously, attempting to incorporate hydrological and meteorological information. Both also provide estimates of the effect on compliance costs of permit-trading schemes and both make policy recommendations based upon these findings.

Impacts
The two permit-trading projects are significant because groundwater pollution and phosphorus pollution in the Minnesota River are important policy problems. My work provides evidence that the MPCA can use directly in forming policies. The other two projects are of scientific interest, addressing unsettled questions in the literature.

Publications

Chavas, J.-P. and J.S. Coggins, July 1, 1999. "On Fairness and Welfare Analysis Under Uncertainty," revised and resubmitted to Social Choice and Welfare.
Trueblood, M.A. and J.S. Coggins, August 5, 1999. "Nonparametric Estimates of Intercountry Agricultural Efficiency and Productivity," submitted to Agricultural Economics.
Stinson, T.F., J.S. Coggins, and C.A. Ramezani, July 15, 1999, "Was FAIR Fair to U.S. Corn Growers," under revision for resubmission to the American Journal of Agricultural Economics.
Moledina, A., J.S. Coggins, and S. Polasky, December 4, 1999, "Dynamic Environmental Policy with Strategic Firms," in progress.