Agriculture, technological change and environmental sustainability: Looking for a win-win water policy strategy

This paper analyses the effects that technological changes in agriculture would have on environmental, social and economic indicators. Specifically, our study is focused on two alternative technological improvements: the modernization of water transportation systems versus the increase in the total factor productivity of agriculture. Using a computable general equilibrium model for the Catalan economy, our results suggest that a water policy that leads to greater economic efficiency is not necessarily optimal if we consider social or environmental criteria. Moreover, improving environmental sustainability depends less on the type of technological change than on the institutional framework in which technological change occurs. Keywords: agricultural technological changes, computable general equilibrium model, economic impact, water policy

The First Privatization Policy in a Democracy: Selling State-Owned Enterprises in 1948-1950, Puerto Rico

In the 1940s, when the Governor of Puerto Rico was appointed by the US President and the Puerto Rican government was answerable only to the US Federal government, a large state-owned enterprise (SOE) sector was established on the island. Public services such as water, transportation and energy were nationalized, and several new manufacturing SOEs were created to produce cement, glass, shoes, paper and chalkboard, and clay products. These enterprises were created and managed by government-owned corporations. Later on, between 1948 and 1950, under the island’s first elected Governor, the government sold these SOEs to private groups. This paper documents both the creation and the privatization of the SOE sector in Puerto Rico, and analyzes the role played by ideology, political interests, and economic concerns in the decision to privatize them. Whereas ideological factors might have played a significant role in the building of the SOE sector, we find that privatization was driven basically by economic factors, such as the superior efficiency of private firms in the sectors where the SOEs operated, and by the desire to attract private industrial investment to the Puerto Rican economy.

Transportation choices and the value of statistical life

This paper exploits an unusual transportation setting to estimate the value of a statistical life(VSL). We estimate the trade-offs individuals are willing to make between mortality risk andcost as they travel to and from the international airport in Sierra Leone (which is separated fromthe capital Freetown by a body of water). Travelers choose from among multiple transportoptions ? namely, ferry, helicopter, hovercraft, and water taxi. The setting and original datasetallow us to address some typical omitted variable concerns in order to generate some of the firstrevealed preference VSL estimates from Africa. The data also allows us to compare VSLestimates for travelers from 56 countries, including 20 African and 36 non-African countries, allfacing the same choice situation. The average VSL estimate for African travelers in the sample isUS$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularlyjob earnings, can largely account for the difference between Africans and non-Africans; Africansin the sample typically earn somewhat less. There is little evidence that individual VSL estimatesare driven by a lack of information, predicted life expectancy, or cultural norms around risktakingor fatalism. The data implies an income elasticity of the VSL of 1.77. These revealedpreference VSL estimates from a developing country fill an important gap in the existingliterature, and can be used for a variety of public policy purposes, including in current debateswithin Sierra Leone regarding the desirability of constructing new transportation infrastructure.

Sequencing lifeline repairs after an earthquake: an economic approach

Recoveries after recent earthquakes in the U.S. and Japan have shown that large welfare gains can be achieved by reshaping current emergency plans as incentive-compatible contracts. We apply tools from the mechanisms design literature to show ways to integrate economic incentives into the management of natural disasters and discuss issues related to the application to seismic event recovery. The focus is on restoring lifeline services such as the water, gas, transportation, and electric power networks. We put forward decisional procedures that an uninformed planner could employ to set repair priorities and help to coordinate lifeline firms in the post-earthquake reconstruction.

Economic impacts of alternative water policy scenarios in the Spanish production system: an input-output analysis

The objective of this paper is to analyse the economic impacts of alternative water policies implemented in the Spanish production system. The methodology uses two versions of the input-output price model: a competitive formulation and a mark-up formulation. The input-output framework evaluates the impact of water policy measures on production prices, consumption prices, intermediate water demand and private welfare. Our results show that a tax on the water used by sectors considerably reduces the intermediate water demand, and increases the production and consumption prices. On the other hand, according to Jevons' paradox, an improvement in technical efficiency, which leads to a reduction in the water requirements of all sectors and an increase in water production, increases the amount of water consumed. The combination of a tax on water and improved technical efficiency takes the pressure off prices and significantly reduces intermediate water demand. JEL Classification: C67 ; D57 ; Q25. Keywords: Production prices; Consumption prices; Water uses; Water policy; Water taxation.