Title: 國立台灣大學 經濟系
Author: 劉教授
Last saved by: Jin-Tan Liu

Environmental Economics (II)  

Department of Economics, National Taiwan University    2008 Spring 
 
Course Instructor：劉錦添（Jin-Tan Liu） 
Class Hours：Wednesday 2:10 – 5:10 pm 
Office Hours：Friday, 2:00 - 5:00 pm 
Office Room：Room 102, Dept. of Economics Building 
Tel：23519641-520, or 281 (助理室) 
E-mail：liujt@ntu.edu.tw

 Topics :  
	1. Environmental Regulation and Informal Regulation 
	2. Welfare Economics 
	3. Benefit Estimation and Damage Assessment 
	4. Trade and Environment 

 Course Requirement:  
	1.Midterm Exam（30%） 
	2.Final Exam（50%） 
	3.Oral Presentation（20%） 

 Web Sites :  
	1.www.rff.org  (Resources for the Future) 
	2.www.epa.gov/economics  (U.S. EPA Economy and Environment) 
	3.www.worldbank.org/nipr   (NIPR, Environmental Economics and Indicators) 
	4.www.nber.org  (National Bureau of Economic Research) 
	5.www.oecd.org  (OECD) 
	6.www.damagevaluation.com  (Environmental Valuation & Cost Benefit website) 
	7.www.evri.ec.gc.ca  (Environmental Valuation Reference Inventory) 
	8.www.msu.edu/course/prm/320  (Professor Eileen van Ravenswaay website) 
	9.www.sscnet.ucla.edu/ssc/labs/cameron (Professor Trudy Ann Cameron website) 
	10. http://ase.tufts.edu/gdae (Global Development and Environment Institute at Tufts University) 
	11. www.unfccc.de (Home page for the United Nations Framework Convention on Climate Change). 
	12. http://wri.org/climate (World Resource Institute’s web site on climate and atmosphere).  
13. http://www.env-econ.net (Environmental Economics)
14. http://www.rfe.org (Economists on the Internet)

 Textbooks and References :  
	‧Baumol and Oates (1988), Theory of Environmental Policy, 2^nd edition, New York: 
Cambridge University Press. 
‧Braden, J.B. and C. D. Kolstad (1991), Measuring the Demand for Environmental  
Improvement, North Holland. 
‧Callan and Thomas (2004), Environmental Economics and Management, Irwin, (滄海書局代理，02-27090781). 
‧Cornes and Sandler (1986), The Theory of Externalities, Public Goods, and Club  
Goods, New York: Cambridge University Press. (HB846.3. C67, 1986). 
‧Cummings, Brookshire and Schulze (ed.) (1986), Valuing Environmental Goods:  
An Assessment of the Contingent Valuation Method, NJ: Rowman and Allenheld. 
‧Field, Barry C. (2000), Natural Resource Economics: An Introduction, New York:  
  MaGraw-Hill Co. 
	‧Fisher, Anthony (1981), Resource and Environmental Economics, Cambridge  
University Press. (HC59. F558). 
‧Folmer, Henk and Tom Tietenberg (1999), The International Yearbook of Environmental and Resource Economics, Edward Elgar. 
‧Folmer, Henk and Tom Tietenberg (2003), The International Yearbook of Environmental and Resource Economics 2003/2004, Edward Elgar. 
‧Freeman, A. Myrick (1979), Benefits of Environmental Improvement, Johns  
Hopkins University Press. (HC79. E5. F7). 
‧Freeman, A. Myrick (1993), The Measurement of Environmental and Resource  
Value: Theory and Methods, Resources for the Future. 
‧Haab and McConnell (2002), Valuing Environmental and Natural Resources: The Econometrics of Non-Market Valuation, Edward Elgar. 
‧Halvorsen and Ruby (1981), Benefit-Cost Analysis of Air Pollution Control, Mass:  
Lexington Books. (TD883. H35). 
‧Hanley, Nick, Jason F. Shogren and Ben White (1997), Environmental Economics  
in Theory and Practice, England, Macmillan Ltd. 
‧Jeroen, C. J. M. and van den Bergh (1999), Handbook of Environmental and Resource Economics, Edward Elgar.  
‧Johansson (1987), The Economic Theory and Measurement of Environmental  
Benefits, Cambridge: Cambridge University Press. 
‧Johansson (1991), Introduction to Modern Welfare Economics, Cambridge:  
Cambridge University Press. 
‧Johansson (1993), Cost-Benefit Analysis of Environmental Change, Cambridge: 
Cambridge University Press. 
‧Just, et al. (1982), Applied Welfare Economics, N.J.: Prenice-Hall. (HB846. J87). 
‧Kahn, James R. (1995), The Economic Approach to Environmental and Natural  
Resources, Dryden Press. 
‧Kemien and Schwartz (1981), Dynamic Optimization, North Holland. (QA402.5.  
K32). 
‧Kneese and Sweeney (1985), Handbook of Natural Resource and Energy  
Economics, volumes 1 and 2, North-Holland Publisher. (HD9502. A2. H257, 1985). 
‧Kopp, Raymond J. and V. Keng Smith ads. (1993), Valuing National Assets: The  
Economics of Natural Resource Damagement Assessment, Washington, D.C.: 
Resources for the Future. 
‧Maureen L. Cropper and Wallace E. Oates (1992), “Environmental Economics: A  
Survey”, Journal of Economic Literature, June, 675-740. 
‧Mendelsohn, Robert and Daigee shaw ed. (1997), The Economics of Pollution  
Control in the Asia Pacific, UK: Edward Elgar. 
‧Mitchell and Carson (1989), Using Surveys to Value Public Goods: The Contingent  
Valuation Method, Washington, D.C.: Resources for the Future. 
‧Nishimura, H. (1989), How to Conquer Air Pollution: A Japanese Experience, New  
York: Elsevier. 
‧O’Connor, Martin (1998), Valuation and the Environment: Theory, Method and  
Practice, Edward Elgar. 
‧OECD (1989), Environmental Policy Benefits: Monetary Valuation, Paris: OECD.  
(HC79. E5. E57856). 
‧OECD (1991), Environmental Policy: How to Apply Economic Instruments, Paris:  
OECD. 
‧Panayotou, Theodore (1993), Green Markets: The Economics of Sustainable  
Development, San Francisco: ICS Press. 
‧Pearce and Turner (1990), Economics of Natural Resources and the Environment, 
Johns Hopkins University Press. 
‧Portney (1982), Current Issues in Natural Resource Policy, Johns Hopkins  
University Press (HC103.7. C87). 
‧Portney (1990), Public Policies for Environmental Protection, Resources for the  
Future. 
‧Smith, ed. (1984), Environmental Policy Under Regan’s Executive Order, Chapel  
Hill: University of North Carolina Press. 
‧Stanley and Jarrell (1989), “Meta-Regression Analysis: A Quantitative Method of Literature Surveys,” J. of Econ. Surveys, 3(2), 161-170.
‧Tietenberg (1985), Emission Trading, an Exercise in Reforming Pollution Policy, 
Johns Hopkins University. (HC110. A4 T54). 
‧Tietenberg (1988), Environmental and Natural Resource Economics, ILL: Scott,  
Foresman. (333.7. T564. E61). 
‧	Tietenberg and Folmer (2002), The International Yearbook of Environmental and Resource Economics 2002/2003, Edward Elgar.
‧	Tietenberg and Folmer (2004), The International Yearbook of Environmental and Resource Economics 2004/2005: A Survey of Current Issues, Edward Elgar. 
‧Tolley, George, Donald Kenkel, and Robert Fabian eds. (1994), Valuing Health for  
Policy, Chicago: University of Chicago Press. 
‧Wooldrige, J. M. (2003), Introductory Econometrics, Ohio: Thomson.
‧Wooldrige, J. M. (2002), Econometric Analysis of Cross Section and Panel Data, Cambridge: MIT Press.
‧	
‧中文書：黃宗煌 等人譯，環境經濟學與政策，聯經出版社. 

 
 Course Outline :
  
Ⅰ. Formal Regulation and Informal Regulation 

	A. Formal Regulation 
	‧Magat and Visusi, “Effectiveness of the EPA’s Regulatory Enforcement: the Case of Industrial Effluent Standards”, J. of Law and Economics, October 1990. 
	‧Deily and Gray, “Enforcement of Pollution Regulations in a Declining Industry,” JEEM, 1991, 260-274. 
	‧Cohen, “Monitoring and Enforcement of Environmental Policy,” in Folmer and Tietenberg (1999).

‧	Gray, Wayne B. and Ronald J. Shadbegian (1995), “Pollution Abatement Costs, Regulation, and Plant-Level Productivity,” NBER working paper No. 4994.
‧ Gray, Wayne B. and Ronald J. Shadbegian (2001), “Plant Vintage, Technology, and Environmental Regulation,” NBER working paper, No. 8480.

	B. Informal Regulation 
	‧Pargal and Wheeler, “Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia,” JPE, 1996. 
	‧Pargal, Hettige, Singh, and Wheeler, “Formal and Informal Regulation of  
Industrial Pollution: Comparative Evidence from Indonesia and the United  
States” World Bank Economic Review, 1997, 433-450. 

	C. Pollution and Economic Growth 
	‧Environment and Development Economics: Special Issue: The Environmental  
Kuznets Curve. Oct. 1997.  

‧	Barbier, “ Introduction to the Environmental Kuznets Curve”. 
‧	De Bruyn, Sander M. and Roebijn J. Heintz (1999), “The Environmental Kuznets Curve Hypothesis,” in Jereon C. J. M. and van Den Bergh, Handbook of Environmental and Resource Economics.
‧Grossman and Krueger, “ Economic Growth and the Environment” QJE, May  
1995,353-377. 

Ⅱ. Common Property Resources and Open Access Resources 
	‧Counes and Sandler, “ On Commons and Tragedies”, AER, 1983, 787. 
	‧Dasgupta and Heal, 11-21, 55-78. 

Ⅲ. Welfare Measurement or Damage Assessment  
   An overview of this section of the course is provided by: 
	‧Freeman, “ Methods for Assessing the Benefits of Environmental Programs” in  
Kneese and Sweeney. 

* OECD (1989). 
	‧Freeman, Chapter 2-3. 

	A. Monetary Measures of Welfare Change under Certainty
	 
	1. Consumers Welfare 
	‧Johansson, Chapter 1-6. 
	‧Just, et al. Chapter 5,6,7,9 and Appendix B. 
	‧Hausman, “ Exact Consumer Surplus and Deadweight Loss” AER, 1981, 662. 
	‧Schulze, “The Use of Direct Methods for Valuing Natural Resource Damages”  
in Kopp and Smith, eds. Natural Resources Damage Assessment. 

* Willig, “Consumer’s Surplus without Apology”, AER, 1976, 589-597. 
	‧Vartia, “Efficient Methods of Measuring Welfare Change and Compensated  
Income in Terms of Market Demand Functions”, Economitrica, 1983, 79-98. 
‧Hanemann, “Willingness to Pay and Willingness to Accept: How Much Can  
They Differ”, AER, 1990. 
‧Bockstael and McConnell, “ Welfare Effects of Changes in Quality” A  
Synthesis” working paper 1987.
 
	2. Producer Rents 
	‧Just, et al. Chapter 4 and Appendix A1-5.
	 
	3. Multi-Market Welfare Measurement 
	‧Just, et al. Chapter 9 and Appendix D1-2. 

B. Monetary Measures of Welfare Change under Uncertainty: Option Price,  
Option Value, and Quasi-option Value 

	‧Freeman, Chapter 8, 5. 
	‧Bishop, “Option Value: An Exposition and Extension” Land Ec, Feb. 1982. 
	‧Bishop, “Resource Valuation under Uncertainty: Theoretical Principles for  
Empirical” 1986. 
‧Freeman, “Nonuse Values in Natural Resource Damage Assessment” in Kopp  
and Smith, eds. Naturnal Resources Damage Assessment. 
‧Graham, “Cost-Benefit Analysis under Uncertainty” AER, Sept. 1981. 
‧Hanemann, “Information and the Concept of Option Value” JEEM, March 1989. 
‧Johansson, Chapter 10, 11. 

* Pearce and Turner, Chapter 9. 
	‧Smith, “Non-Use Values in Benefit Cost Analysis” SEJ, July 1987. 

C. Damage Function
  ‧Ostro (1983), “ The Effects of Air Pollution on Work Loss and Morbidity,” JEEM, 10, 371-382.
   ‧Zuidema and Nentjes (1997), “Health Damage of Air Pollution: An Estimate of a Dose-Response Relationship for the Netherlands,” Environmental and Resource Economics, 9, 291-308.
   ‧Chay and Greenstone (2003), “The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession,” 
QJE, August, 1121-1167.
   ‧Greenstone (2004), Did the Clean Air Act Cause the Remarkable Decline in Sulfur Dioxide Concentrations?”, JEEM, May, 585-611.
   ．Alberini and Krupnick (2002), “Valuing the Health Effects of Pollution,” in Tietenberg and Folmer ed. The International Yearbook of Environmental and Resources Economics, UK: Edward Elgar.

D. Indirect Benefit Measurement 

1. Hedonic Models 
	‧Freeman, Chapter 11,12. 
	‧Johansson, Chapter 7. 
   ‧ Haab and McConnell (2002), Chapter 9: Hedonic Price Equations
	‧McConnell, “Indirect Methods for Assessing Natural Resource Damages under  
CERCLA” in Kopp and Smith, eds. Natural Resource Damage Assessment. 

* OECD (1989), Chapter 5. 
	‧Palmquist, “Hedonic Methods” in Braden and Kolstad, ed, Measuring the  
Demand for Environmental Improvement. North-Holland, 1990. 
‧Palmquist, “Welfare Measurement in the Hedonic Model: The Case of  
Nonparametric Marginal Prices”, JEEM, Sept. 1988. 
‧	Rosen, “Hedonic Prices and Implicit Markets” JPE, 1974. 
   ．Gamble and Downing (1982), “Effects of Nuclear Power Plants on Residential Property Values,” J. of Regional Science, 22(4), 457-478.

Value of Life and Value of Injury:
‧Visusi and Aldy, “The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World,” NBER working paper 9487, 2003, Journal of Risk and Uncertainty, 27(1), August 2003. 
 
2. Recreation Demad Models: Travel Cost, Hedonic Travel Cost, Random 
Utility Models, and Nested Logit Models 
	‧Freeman, Chapter 13. 
‧	Haab and McConnell (2002),
‧	    Chapter 6: Modeling the Demand for Recreation
‧	    Chapter 7: Single Site Demand Estimation
‧	    Chapter 8: Site Choice Models        
	‧Bockstael, Hanemann, and Kling, “Estimating the Value of Water Quality  
Improvements in a Recreational Demand Framework” WRR, May 1987. 
‧Bockstael, McConnell, and Strand, “Recreation” in Braden and Kolstad, eds., 
Measuring the Demand for Environmental Improvement, North-Holland, 1990. 
‧Brown and Mendelsohn, “The Hedonic Travel Cost Method” REStat, August  
1984. 
‧McConnell, “The Economics of Outdoor Recreation” in the Kneese and  
Sweeney. 
‧Smith, “Travel Cost Recreation Demand Methods: Theory and Implementation”. 
	
	3. Household Production Models 
	‧Bockstael and McConnell, “Welfare Measurement in the Household Production  
Framework” AER, Sept. 1983. 
‧Deaton and Muellbauer, Chapter 10. 
‧Smith, “Household Production Functions and Environmental Benefit  
Measurement” in Braden and Kolstad, eds., Measuring the Demand for  
Environmental Improvement, North-Holland, 1990. 

E. Contingent Valuation and Contingent Behavior Methods 
	‧Freeman, Chapter 6. 
‧	Haab and McConnell (2002): 
‧	   Chapter 2: Parametric Models for Contingent Valuation;
‧	   Chapter 4: The Distribution of Willingness to Pay
‧	   Chapter 5: Topics in Discrete Choice Contingent Valuation
‧	V. Kerry Smith (2004), “Fifty Years of Contingent Valuation” in Tietenberg and Folmer edited, The International Yearbook of Environmental and Resource Economics 2004/2005, Edward Elgar Co.
	‧Boyle and Bishop, “Welfare Measures Using Contingent Valuation: A  
Comparison of Techniques” AJAE, Feb. 1988. 
‧Camerson, “A New Paradigm for Valuing Non-market Goods using  
Referendum Data” JEEM, Sept. 1988. 
‧Carson, “Constructed Markets” in Braden and Kolsted, eds., Measuring the  
Demand for Environmental Improvement, North-Holland, 1990. 
‧Hanemann, “Welfare Evaluations in Contingent Valuation Experiments with  
Discrete Responses” AJAE, Aug. 1984. 
‧Hanemann, Loomis, and Kanninen, “Statistical Efficiency of  
Double-Bounded Dichotomous Choice Contingent Valuation, AJAE, 1991. 
‧Jahansson (1987), Chapter 7. 
‧McConnell, “Models for Referendum Data: The Structure of Discrete Choice  
Models for Contingent Valuation” JEEM, Jan. 1990.
‧Jessup, Amber, et al (2003), Valuation of Morbidity Losses: Meta-Analysis of Wilingnes-to-Pay and Health Status Measures, Final Report, RTI Project number 08184-002.

* OECD (1989) , Chapter 4. 

Ⅳ. Valuation of Environmental Risks 
	‧Freeman, Chapter 8. 
	‧Jones-Lee, The Economics of Safety and Physical Risk, Basil Blackwell, 1989,  
Chapter 2, 3. 
‧Slovic, “Perception of Risk” Science, April 17, 1987, 280-285. 
‧Smith, “Environmental Risk Perception and Valuation: Conventional versus  
Prospective Reference Theory” in The Social Response to Risk: Policy  
Formation in an Age of Uncertainty, D. Bromley and K. Segerson, Editors  
(Kluwer, 1992). 
‧Smith, et al., “Can Public Information Programs Affect Risk Perceptions?”  
Journal of Policy Analysis and Management, Winter 1990. 
‧Viscusi and O’Connor, “Adoptive Responses to Chemical Labelling: Are Workers Bayesian Decision Makers?”, AER, 1984, 942-956. 
‧Smith and Desvousges, “ Risk Communication and the Value of Information: Randon as a Case Study,” REstat, 1990, 137-142. 
‧Viscusi, “ A Bayesian Perspective on Biases in Risk Perception” Economics  
Letters, 1985. 
‧Viscusi, Fatal Tradeoffs: Public and Private Responsibilities for Risk, New  
York: Oxford University Press, Chapter 6-8. 
‧Viscusi and Evans, “Utility Functions that Depend on Health Status: Estimates  
and Economic Implications” AER, June 1990. 

Ⅴ. Valuing Longevity and Health 
	‧Freeman, Chapter 10. 
	‧Tolley, Kenkel and Fabian (1994).

‧Value of Life: Viscusi and Aldy (2003), “The Value of A Statistical Life: A Critical Review of Market Estimates Throughout the World”, NBER working paper 9487.
   ‧ Value of Health:
      Diener, O’brien and Gafni (1998), “Health Care Contingent Valuation Studies: A Review and Classification of the Literature” Health Economics, 7: 313-326.

Ⅵ. Environmental Regulations and International Trade 
	‧Oates, Palmer, and Portney, “Environmental Regulation and International  
Competitiveness: Thinking About the Porter Hypothesis,” REF/QE Discussion  
Pater 94-12, Nov. 1993. 
‧	Jaffe, Peterson, Portney and Stavins, “Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell us?” JEL, 1995, 132-163. 
‧	Brunnermeier, Smita B. and Arik Levinson (2004), “Examining the Evidence on Environmental Regulations and Industry Location,” Journal of Environment & Development, 13(1), 6-41.
‧	Ederington, J., A. Levinson and J. Minier (2003), “Footloose and Pollution-Free”, NBER working paper 9718.
‧	Ederington, J. and J. Minier (2003), “Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis,” Canadian Journal of Economics, 36(1), 137-154.
‧Anderson and Neary, “A New Approach to Evalvating Trade Policy” World  
Bank Working Paper, Nov. 1992. 
‧Dean, “Trade and The Environment, A Survey of the Literature” World Bank  
Working Paper, Aug 1992. 
‧De Boer, Ineke, “Trade and Environment: A Brief Survey of Current  
Theoretical Issues,” in Ekko C. van Ierland ed. International Environmental Economics: Theories, Models and Applications to Climate Change, International Trade and Acidification. (Asmsterdam: Elsevier, 1994). 
‧Barbera and McConnell, “The Impact of Environmental Regulations on  
Industry Productivity: Direct and Indirect Effects” JEEM, Vol. 18, 1990. 
‧Gray and Shadbegian, “Pollution Abatement Costs, Regulation, and Plant-Level  
Productivity,” NBER Working paper, 4994, Jan. 1995. 

 期刊名稱 : 
AER: American Economics Review 
AJAE: American Journal of Agricultural Economics 
CJE: Canadian Journal of Economics 
EC Inq: Economic Inquiry 
Economica 
EJ: Economic Journal 
JEL: Journal of Ecoonomic Literature 
JEEM: Journal of Environmental Economics and Management 
JPAM: Journal of Policy and Management
JPE: Journal of Political Economy 
Land Ec: Land Economics 
NRJ: Natural Resources Journal 
Pub. Fin. : Public Finance 
QJE: Quarterly Journal of Economics 
SEJ: Southern Economic Journal 
REStat: Review of Economics and Statistics 
REStudies: Review of Economics Studies 
WRR: Water Resources Research