Benefit-Cost Analysis

DOT document

http://www.fhwa.dot.gov/infrastructure/asstmgmt/primer.cfm

Answers to #6

b) 4%

c) 1%

d) CBO = 2%, OMB = 7%

e) For the base case estimates with t = 1, ..., 30; NPV = $137 million (2%), $76 million (7%)

I hope you guys do better on the exam than I did on the study guide

My brain is frozen: This post has been corrected.

Also, the answers to number 2 are correct ... but incorrect since I didn't include time costs in the travel cost calculation.

An example of nonuse values in environmental policy

I posted this at Environmental Economics (just an FYI -- no hidden meaning, final exam thing going on):

From the inbox:

NOAA’s Fisheries Service today issued its final interim rule to reduce commercial fishing for groundfish stocks in the Aleutian Islands in an effort to provide more food for the endangered western Steller sea lion.

The rule, which would prohibit fishing for Atka mackerel and Pacific cod, the main source of food for the animal, in an area off the western Aleutian Islands, goes into effect January 1. ...

Under the Endangered Species Act, NOAA’s Fisheries Service must ensure that agency actions to allow fisheries do not jeopardize the continued existence of endangered species such as the western Steller sea lion. ...

For more information on the western Steller sea lion and the Alaska Groundfish Biological Opinion and to comment on the final interim rule, please visit http://alaskafisheries.noaa.gov.

Here is the evidence on nonuse values of the Steller sea lion: http://dx.doi.org/10.1016/S0308-597X(02)00025-8

Note to self: isn't there another paper out there that looks at sea lions?

Update to self: http://dx.doi.org/10.1007/s10640-010-9394-1

via www.env-econ.net

Correction to 5a on the study guide

It reads:

Estimate willingness-to-pay for certain and uncertain contingent valuation respondents assuming that the percentage yes at a bid of $0 is equal to the % yes at a bid of $5.

It should read:

Estimate willingness-to-pay for certain and uncertain contingent valuation respondents assuming that the percentage yes at a bid of $0 is equal to the % yes at a bid of $10.

Presentation schedule update

Presentations begin tomorrow:

• Wed, 10-10:45, P2P
• Thurs, 10-10:45, MHM; 2:30-3:15, Oysters; 3:30-4:15, AIRE

Next week:

• Mon, 10:30-11:15, TDA - Rocky Knob; 11:45-12:30, TDA - Greenway
• Tues, 1-1:45, Carbon sequestration; 2-2:45, Menhaden

We still need to set up days / times for four more, I think: H4H, REI, Carbon offsets, Health. Am I missing any?

Revised study guides/answers

I always rely on the first-mover student to help me work out problems in my study guides (thanks Andrew!). These are all revised:

Download Exam 2 study guide -- added a price to the VSL question

Download Exam 2 study guide answers -- added a graph for #1 and changes answers to 1.h and 1.i.

Download ECO 5660 exam 2 take home -- clarified part d.

Also, don't make the ECO 5660 question harder than it ought to be [e.g., the "correct" discount rate is anything between 2% and 7% (with some justification such as averaging; or, here is a good paper), any of the horizon value estimation methods are OK).

Presentation schedule

Any student is welcome to attend any presentation (in fact, I should require that you attend at least one other as part of your participation score [10% of the project grade] ... I'll do that next year). Here is the schedule so far (all presentations are in Raley 3100, unless otherwise noted):

• Wednesday 12/8, 10-11, Parent to Parent
• Thursday 12/9, 10-11, Mountain Home Music
• Thursday 12/9, 2-3, PHP Oysters
• Monday 12/13, 10:30-11:30, TDA - Rocky Knob
• Monday 12/13, 11:45-12:45, TDA - Greenway (still tentative)

Have I missed anyone?

If your group is not listed, send me an email with days / times that are good for you!

 

ECO 4660: SL assessments

There are still a few ECO 4660 students that still need to complete the ACT assessment survey (graduate students can take it too, especially if you had a client other than me, the more feedback the better).

Go to the ACT website and click on "for students" at the top of the left hand column.

These need to be completed by Reading Day.

Thanks!

ECO 5660: awesome exam question

Download ECO 5660 exam 2 take home

This is due along with the rest of the take home exam.

Note: ECO 4660 students are not required to answer this question.