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We identify two issues with the reverse regression approach as implemented in several classic reconstructions of past climate fluctuations from dendroclimatologcical data series. First, instead of estimating the causal relationship between the proxy, which is measured with significant error, as function of climate and formally inverting the relationship, most papers estimate the inverted relationship directly. This leads to biased coefficients and reconstructions with artificially low variance. Second, we show that inversion of the relationship is often done incorrectly when the underlying causal relationship is dynamic in nature. We show analytically as well as using Monte Carlo experiments and actual tree ring data, that the reverse regression method results in biased coefficients, reconstructions with artificially low variance and overly smooth reconstructions. We further demonstrate that correct application of the inverse regression method is preferred. However, if the measurement error in the tree ring index is significant, neither method provides reliable reconstructions.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jenvman.2005.01.017 Byline: Amitrajeet A. Batabyal (a), Seung Jick Yoo (b) Abstract: The quasi-option value (QOV) literature originated by Arrow et al. (Arrow, K.J., Fisher, A.C., 1974. Environmental preservation, uncertainty, and irreversibility. Quarterly Journal of Economics 88, 312-319) and by Henry (Henry, C., 1974. Option values in the economics of irreplaceable assets. Review of Economic Studies 41, 89-104) is largely concerned with the analysis of two-period models of land development. Our paper extends this literature by analyzing two scenarios in which the decision to develop land is made in a multi-period and stochastic framework. In the first scenario, the development decision is indivisible. In contrast, in the second scenario, the development decision is divisible. Specifically, we study the properties of the indivisible development decision when there is a time constraint on when land is to be developed. We then analyze the ways in which the divisible land development decision depends on the extent of a landowner's landholding and on the number of development opportunities awaiting this landowner. Author Affiliation: (a) Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA (b) Korea Energy Economics Institute, 665-1 Naeson2-dong, Euiwang-si, Kyonggi-do 473-713, Republic of Korea Article History: Received 7 September 2004; Revised 29 November 2004; Accepted 21 January 2005 Article Note: (footnote) [star] For their helpful comments on a previous version of this paper, we thank Alison L. Gill, two anonymous referees, and participants at the 2003 RSAI Japan Section Annual Meeting in Okinawa, the 2003 RSAI NARSC Annual Conference in Philadelphia, the 2004 EEA Annual Conference in Washington, DC, the 2004 CAES-NAREA Annual Meeting in Halifax, and the 2004 AAEA Annual Meeting in Denver. In addition, Batabyal acknowledges financial support from the Gosnell endowment at RIT. The usual disclaimer applies.

Outdoor residential pesticide use has remained steady at about half of all US households during the past 20 years. However, the proportion of households that have turned to professional treatments has been increasing. This trend reflects the increased benefits of using professional pest control or the increased costs of using residential pesticides without professional assistance. In view of the potential adverse effects of outdoor residential pesticides on the environment and public health, public policy makers are advised to review the behavioral and economic profile of household pesticide usage.