Valuing drinking water provision as an ecosystem service in the neuse river basin

The valuation of ecosystem services such as drinking water provision is of growing national and international interest. The cost of drinking water provision is directly linked to the quality of its raw water input, which is itself affected by upstream land use patterns. This analysis employs the benefit transfer method to quantify the economic benefits of water quality improvements for drinking water production in the Neuse River Basin in North Carolina. Two benefit transfer approaches, value transfer and function transfer, are implemented by combining the results of four previously published studies with data collected from eight Neuse Basin water treatment plants. The mean net present value of the cost reduction estimates for the entire Neuse Basin ranged from $2.7 million to $16.6 million for a 30% improvement in water quality over a 30-year period. The value-transfer approach tended to produce larger expected benefits than the function-transfer approach, but both approaches produced similar results despite the differences in their methodologies, time frames, study sites, and assumptions. © 2010 ASCE.

Asset pricing in created markets

We investigate the applicability of the present-value asset pricing model to fishing quota markets by applying instrumental variable panel data estimation techniques to 15 years of market transactions from New Zealand's individual transferable quota (ITQ) market. In addition to the influence of current fishing rents, we explore the effect of market interest rates, risk, and expected changes in future rents on quota asset prices. The results indicate that quota asset prices are positively related to declines in interest rates, lower levels of risk, expected increases in future fish prices, and expected cost reductions from rationalization under the quota system. © 2007 American Agricultural Economics Association.

Discounting the distant future: How much do uncertain rates increase valuations?

We demonstrate that when the future path of the discount rate is uncertain and highly correlated, the distant future should be discounted at significantly lower rates than suggested by the current rate. We then use two centuries of US interest rate data to quantify this effect. Using both random walk and mean-reverting models, we compute the "certainty-equivalent rate" that summarizes the effect of uncertainty and measures the appropriate forward rate of discount in the future. Under the random walk model we find that the certainty-equivalent rate falls continuously from 4% to 2% after 100 years, 1% after 200 years, and 0.5% after 300 years. At horizons of 400 years, the discounted value increases by a factor of over 40,000 relative to conventional discounting. Applied to climate change mitigation, we find that incorporating discount rate uncertainty almost doubles the expected present value of mitigation benefits. © 2003 Elsevier Science (USA). All rights reserved.

Tom Sawyer and the construction of value

This paper challenges the common assumption that economic agents know their tastes. After reviewing previous research showing that valuation of ordinary products and experiences can be manipulated by non-normative cues, we present three studies showing that in some cases people do not have a pre-existing sense of whether an experience is good or bad-even when they have experienced a sample of it. © 2005 Elsevier B.V. All rights reserved.

Attentional Biases in Value-Based Decision-Making

Humans make decisions in highly complex physical, economic and social environments. In order to adaptively choose, the human brain has to learn about- and attend to- sensory cues that provide information about the potential outcome of different courses of action. Here I present three event-related potential (ERP) studies, in which I evaluated the role of the interactions between attention and reward learning in economic decision-making. I focused my analyses on three ERP components (Chap. 1): (1) the N2pc, an early lateralized ERP response reflecting the lateralized focus of visual; (2) the feedback-related negativity (FRN), which reflects the process by which the brain extracts utility from feedback; and (3) the P300 (P3), which reflects the amount of attention devoted to feedback-processing. I found that learned stimulus-reward associations can influence the rapid allocation of attention (N2pc) towards outcome-predicting cues, and that differences in this attention allocation process are associated with individual differences in economic decision performance (Chap. 2). Such individual differences were also linked to differences in neural responses reflecting the amount of attention devoted to processing monetary outcomes (P3) (Chap. 3). Finally, the relative amount of attention devoted to processing rewards for oneself versus others (as reflected by the P3) predicted both charitable giving and self-reported engagement in real-life altruistic behaviors across individuals (Chap. 4). Overall, these findings indicate that attention and reward processing interact and can influence each other in the brain. Moreover, they indicate that individual differences in economic choice behavior are associated both with biases in the manner in which attention is drawn towards sensory cues that inform subsequent choices, and with biases in the way that attention is allocated to learn from the outcomes of recent choices.

Prognostic value of the diagnostic criteria distinguishing endometrial stromal sarcoma, low grade from undifferentiated endometrial sarcoma, 2 entities within the invasive endometrial stromal neoplasia family

The World Health Organization (WHO 2003) recognizes 3 endometrial stromal neoplasms: noninvasive endometrial stromal nodule and the 2 invasive neoplasms, endometrial stromal sarcoma (ESS), low grade and undifferentiated endometrial sarcoma (UES). It is important to note that the WHO 2003 does not define moderate atypia (an important differentiating diagnostic criterion for ESS, low grade and UES), nor does it discuss its significance. Moreover, studies on reproducibility and additional prognostic value of other diagnostic features in large are lacking. Using strict definitions, we analyzed the agreement between routine and expert-review necrosis and nuclear atypia in 91 invasive endometrial stromal neoplasias (IESN). The overall 5-year and 10-year recurrence-free survival rate estimates of the 91 IESN patients were 82% and 75%, respectively. Necrosis was well reproducible, and nuclear atypia was reasonably well reproducible. The 10-year recurrence-free survival rates for necrosis absent/inconspicuous versus prominent were 89% and 45% (P<0.001) and those for review-confirmed none/mild, moderate, severe atypia were 90%, 30%, and <20% (P<0.00001). Therefore, cases with moderate/severe atypia should be grouped together. Nuclear atypia and necrosis had independent prognostic values (Cox regression). Once these features were taken into account, no other feature had an independent additional prognostic value, including mitotic count. Using "none/mild atypia, necrosis absent/inconspicuous" as ESS, low grade versus "moderate/severe atypia present or necrosis present" as UES resulted in 68 ESS, low grade and 23 UES cases with disease-specific overall mortality-free survival of 99% versus 48% (P<0.00001, hazard ratio=45.4). When strictly defined microscopic criteria are used, the WHO 2003 diagnoses of ESS, low grade and UES are well reproducible and prognostically strong. © 2012 International Society of Gynecological Pathologists.