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We experimentally compare the performance of two multi-type environmental credit trading markets. The first trading market is called the multiple market (MM) institution, which allows the providers to sell jointly produced credits of all types. The second trading market is called the single market (SM) institution, where the providers of jointly produced credits can only choose one type of credit to sell. We investigate several key indicators, including the trading price, quantity, and net social benefit, to compare the performance of the SM and MM institutions. We find that the trading prices are significantly lower in MM compared to SM, indicating that MM potentially benefits the credit buyers. We also find that SM leads to more credit productions. Since not all credits can be traded in SM, the increase in the production cost outweighs the increase in the total social benefit. As a result, the net social benefit is lower in SM compared to MM. We expand the literature by firstly designing a market platform for multi-type credit trading and then assessing their performance with lab experiment evidence.

Recent environmental regulations raise the importance of accurate, survey-based methods to estimate environmental values, while interviewing costs stimulate research to improve dichotomous choice survey methods. This paper proposes using strength-of-preference indicators along with dichotomous contingent response data. We model strength-of-preference indicators as quasi-cardinal measures using an ordered-response model. We find that strength-of-preference indicators provide substantial efficiency gains while increasing respondents' effort minimally, with evidence that interpersonal comparison of preference ratings induces no bias. The ordered response model of utility and willingness to pay is superior, even in predicting the binary choice results.

This study reports on a contingent choice survey in which respondents expressed their preferences for packages of watershed management outcomes, where these packages were assessed against alternative institutional characteristics of the funding mechanism. Specifically, this study addresses the issue of respondents' faith in the payment mechanism as an efficient and guaranteed funding source. Analyses of marginal willingness to pay for single variable changes, marginal rates of substitution among variable pairs, and willingness to pay for watershed management packages indicate the potential for significant impacts of payment mechanism attributes. Implications address ranking of policy packages and validity in estimating money-scaled welfare impacts.

Forestry models often ignore spatial relationships between forest stands. This paper isolates the effects of stand interactions in multiple-use forestry through a straightforward extension of the single-stand model. Effects of stand interactions decompose into wealth and substitution effects and may cause time-varying patterns of resource use for a forest stand. Simulations illustrate that a stand′s role, even in steady-state, may alternate an emphasis on timber with an emphasis on nontimber. Optimal management plans differ substantially, depending on whether the manager values nonmarket goods from neighboring stands. The model offers insights for improving heuristic forest-level optimization models in current usage.

This paper describes an approach to facility siting that ranks potential sites in terms of their social impacts. A contingent choice survey based on paired comparisons is used to construct a utility index to rank sites consistent with predicting results of a hypothetical referendum based on the attributes of the sites. The method is likely to be acceptable to public decision makers, since it is analogous to site scoring methods that have been commonly used. Indeed, our approach is currently being employed as part of a larger landfill site selection process in the state of Rhode Island.

This paper synthesizes familiar theories of nonrenewable and renewable resource economics in a two-sector, partial-equilibrium analysis of efficient trade-offs between renewable resource production and environmental development. The irreversible impacts of coastal zone development provide a motivating example. While development proceeds, the efficient harvest of renewable resources may exceed the “sustainable” rate. While development may involve several periods of growth and decline, once development begins it proceeds without significant interruptions. If a profitable renewable sector survives, development ceases before exhausting all profitable opportunities. Interdependent stocks reduce distinctions between resource types because each sector exhibits features of the other.

This paper challenges common assumptions about convexity in forest rotation models which optimize timber plus nontimber benefits. If a local optimum occurs earlier than the globally optimal age, policy based on marginal incentives may achieve suboptimal results. Policy-relevant nonconvexities are more likely if (i) nontimber benefits dominate for young stands while the optimal age depends primarily on timber benefits, or (ii) nontimber benefits dominate for mature stands and also determine the optimal age. Nonconvexities may create either temporary or persistent difficulties. Policymakers may improve efficiency by exploiting the relationship between the timber-only optimum and the global optimum.

A marginal cost pricing (MCP) policy for a publicly produced good leads to politically unacceptable price fluctuations when economies of scale exist in plant construction. A partial equilibrium analysis of water supply defines a general, optimal, constant price for water which is a weighted average of the annual marginal short run and capacity expansion costs. For special cases of arithmetic or geometric growth in demand, the demand growth rate and the discount rate determine the fraction of capital costs which a constant price will recover. Under conditions which favor the MCP policy, the constant pricing policy produces ⩾ 98.5% of the net benefits produced by the MCP policy.