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This paper examines the Arrow-Fisher-Henry concept of option value and analyzes its properties including its relationship to the value of information and the effects of increasing uncertainty about the future consequences of irreversible development. It is shown that this option value is distinct from but bounded by the value of information in the overall decision problem. Also, it is distinct from a concept of option value that appears in B. S. Bernanke, Quart. J. Econom. 98, 85–106 (1983). However, when there is a continuum of development levels, rather than a binary choice between full development and no development, some of these conclusions need to be modified.

We discuss a couple of important issues in the recent literature on quasi-option value. We show that the assertion that quasi-option value can be negative in a model with independent learning is based on confusion between quasi-option value, which is always positive, and the net benefit of preservation (of a natural environment subject to development), which is not. We also explore the significance of different assumptions about the nature of learning and show that the result that quasi-option value is positive is surprisingly robust.

In this paper, a theoretically consistent approach to including time costs in recreational demand models is developed. The demand model is conditional on the recreationist's labor market situation. For individuals at corner solutions in the labor market, utility maximization is subject to two constraints, leading to a demand function with travel costs and travel time as independent variables. With interior solutions in the labor market, time is valued at the wage rate and combined with travel costs to produce one "full cost" variable. In an illustration, welfare measures based on the new model are estimated for a sample of sportfishermen.

This letter deals with the use of discrete choice models for applied welfare analysis. An approximate formula is presented for the marginal willingness to pay for a change in the attributes of any of the discrete alternatives which is simple to calculate and has an intuitive interpretation.

The purpose of this paper is to examine the effects of the recent water and air pollution control legislation in the United States upon the market risk of the firms in the most directly affected industries, such as chemicals, electric utilities, iron and steel, petroleum, non‐ferrous metals and textiles, during the period 1953–75.

I want to begin with a caveat. I have no training in psychology, and my interest in the field is that of an amateur. Thus, the confidence with which I shall make statements about psychological facts is in inverse proportion to my expertise. My point of departure is the assumption that the most serious problem with contingent valuation (CV) methodology is hypothetical bias. Apart from introspection, the evidence for this assumption comes from two classic studies conducted by Richard Bishop and his colleagues at the University of Wisconsin. The first study by Bishop and Heberlein (1979) involved a survey of two random samples of individuals who had obtained permits to hunt ducks in the Horizon Zone of East Central Wisconsin. One sample group was asked the hypothetical question whether they would be willing to sell their permit for a specified sum of money (this sum differed among individuals). The other sample group was given a real opportunity to sell their permit for a specified sum of money; of 237 hunters surveyed, 105 actually sold their permits.

Objectives We use a contingent valuation (CV) study of childhood asthma to discuss a central issue in designing CV studies of chronic illness—the need for a detailed, realistic scenario that minimizes confounding factors—and show how to address this issue. We apply our methodology to estimate households' willingness to pay (WTP) for reductions in asthma morbidity. Methods By using a combination of focus groups, revealed preference surveys, and epidemiological surveys, we gathered information on health status, attitudes, and beliefs regarding asthma, risk-averting behaviors, perceptions of these behaviors, and household socioeconomic characteristics. We used this information to design a CV survey that we extensively tested for validity. In the survey, we elicited participants' WTP for a hypothetical device that would reduce symptom-days by improving asthma management; these data enabled us to estimate household WTP by using a variety of econometric models. Results Our analysis of households with children with asthma yielded the following conclusions: the scenario should address both physical asthma symptoms and the psychosocial stress of managing a chronic illness; the survey should measure household perceptions of the burden of asthma in addition to objective measures such as symptom-days; and the scenario should not involve substantial behavioral changes or a new medication, to avoid confounding household preferences with unrelated attributes of the scenario. Our primary models estimated mean household WTP for a 50% reduction in symptom-days (and accompanying reductions in psychosocial stress) at $56.48 to $64.84 per month. Conclusions Our methodology can be used to inform CV studies of chronic illness. Our WTP estimates can help regulatory agencies assess a wide range of policies that affect the incidence or severity of asthma.

A fifty-five-year-old man presenting with unilateral renal colic and ureteral obstruction was found to have ureteral metastasis from a primary gallbladder carcinoma. This appears to be the second report of such a case in the English literature.

The Earl Warren Legal Institute, part of the University of California at Berkeley, is a center for law-related interdisciplinary research and public service in areas of national social concern. Since 1975, we have worked with the U.S. Department of Energy and Lawrence Berkeley Laboratory on various projects addressing energy policy and environmental issues. We are now engaged in a major effort to identify current legal, economic and institutional obstacles to commercial development and use of geothermal energy sources. Geothermal resources--heat reservoirs beneath the earth's surface--have received increasing attention in recent years of growing energy consciousness, and much progress has been made toward understanding their nature, extent and uses. Encouraged by federal and state development programs, there now exists an active and growing community of geologists, geophysicists, engineers, drilling companies, developers and end-users of geothermal heat. However, Department of Energy studies indicate that current knowledge and available technology would support substantially broader use of the resource, particularly by private sector commercial, industrial and agricultural concerns. Accordingly, we are now seeking to determine the knowledge and attitudes of such entities toward geothermal use; the factors which will influence decisions to utilize geothermal or not; the perceived obstacles, if any, to expanded use in their own industries; and the types of government policies or programs which might minimize such obstacles. The industries we have chosen to approach have been targeted by others as potential geothermal users. However, we recognize that many firms today have little or no knowledge of the resource or of its potential applications. We have therefore prepared the following brief summary as an introduction for some, perhaps a refresher for others, and hopefully a stimulus for an exchange of ideas with all whose views we intend to solicit as our work proceeds.

In this paper we develop some of the economic theory relevant to decisions about the protection of endangered species and their natural habitat. Two key concepts emerge from the discussion: uncertainty and irreversibility. Uncertainty is pervasive in economic life, of course. But more than the usual degree of uncertainty surrounds the potential future benefits from conserving ecosystems. Most endangered species, for example, remain as yet undiscovered in tropical moist forests that are at the same time undergoing rapid and (from the point of view of the indigenous species) destructive development. In these circumstances it is hard to predict what values — a cure for (some form of) cancer, a liquid hydrocarbon, a perennial corn, to name just three of the more interesting among current possibilities — will ultimately emerge if the species that may produce them are not lost.

This well-documented book analyzes the possibilities and constraints of regulatory cooperation between the EU and the US (particularly California) with a specific focus on environmental protection, food safety and agriculture, biosafety and biodiversity.