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Economy-Wide Modeling, Environmental Macroeconomics, and Benefit-Cost Analysis

Economy-Wide Modeling, Environmental Macroeconomics, and Benefit-Cost Analysis <p>ABSTRACT:</p><p>This paper develops a new method for evaluating benefit estimates prepared for major environmental rules and addresses three criticisms of existing practices: (1) using benefit estimates from the literature without adjusting for the conceptual differences underlying their meaning, (2) ignoring feedback effects of policy, and (3) failing to recognize the potential for economy-wide effects of large policies. Our approach adapts a general equilibrium framework characteristic of macroeconomic models and focuses on the effects of introducing nonmarket environmental services into the aggregate or "stand-in" preference function. Two recent policies illustrate how it can be used to assess economy-wide effects. <i>(JEL D61, H41)</i></p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

Economy-Wide Modeling, Environmental Macroeconomics, and Benefit-Cost Analysis

Land Economics , Volume 96 (3) – Jul 2, 2020

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Publisher
University of Wisconsin Press
Copyright
Copyright © Board of Regents of the University of Wisconsin System.
ISSN
1543-8325

Abstract

<p>ABSTRACT:</p><p>This paper develops a new method for evaluating benefit estimates prepared for major environmental rules and addresses three criticisms of existing practices: (1) using benefit estimates from the literature without adjusting for the conceptual differences underlying their meaning, (2) ignoring feedback effects of policy, and (3) failing to recognize the potential for economy-wide effects of large policies. Our approach adapts a general equilibrium framework characteristic of macroeconomic models and focuses on the effects of introducing nonmarket environmental services into the aggregate or "stand-in" preference function. Two recent policies illustrate how it can be used to assess economy-wide effects. <i>(JEL D61, H41)</i></p>

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Jul 2, 2020

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