Agricultural Economics 616 Fall 2015 Natural Resource Economics. 605 Krannert Tues/Thurs Noon 2:
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1 Agricultural Economics 616 Fall 2015 Natural Resource Economics John G. Lee Office Hours: 605 Krannert Tues/Thurs Noon 2: Course Time: Our first meeting will be held at the official time: August 25 at 3:00 PM in Rawls room The time and day can be changed if conflicts arise. Prerequisites: Microeconomic theory equivalent to ECON 511, applied welfare economics equivalent to AGEC 604. Course Description: The course is designed to familiarize students with the theory and problems of natural resource economics and analytical procedures used to assess natural resource issues. The course will include lectures and discussions. Students will be expected to keep abreast of all readings. Students may be assigned leadership roles for selected sections. The course is divided into 9 topic areas. The topic areas to be discussed are presented in the attached reading list. Students will complete homework assignments every two to three weeks. Some will involve solving problems while others will consist of short essays on particular topics. There will be two exams. A mid-term exam will be given after Section 5. Grading for the class will be determined by the following weights: Mid-term Exam 30%, Final Exam 50%, homework assignments 15%, and participation in class discussion 5%. The following grade classifications normally prevail: =A, 80-89=B, 70-79=C, 60-69=D, >59=F. Readings are available for purchase from Copymat in Chauncey Hill Mall. Section 1: Evolution of natural Resource Economics 1. Howe, C., Chapter 1, Overview of the Natural Resources Field, Natural Resource Economics, John Wiley & Sons. 2. *Anderson, T.L. The New Resource Economics: Old Ideas and New Applications, AJAE 64 (1982): *Randall, A. Methodology, Ideology, and the Economics of Policy: Why Resource Economists Disagree, AJAE 67(1985):
2 Section 2: Resource Scarcity 1. *Fisher, A., Resource Scarcity: Are Resources Limits to Growth? (Chapter 4), Resource and Environmental Economics, Cambridge University Press, pp *Castle, E.N. Property Rights and the Political Economy of Resource Scarcity, 3. Howe, C., Natural Resource Economics, Chapter 6 & 7, John Wiley & Sons. 4. Smith, V.K. and J.V. Krutilla. Resource and Environmental Constraints to Growth, AJAE 61 (1979): *Norgaard, R.B. Economic Indicators of Resource Scarcity: A Critical Essay, JEEM 19 (1990): Section 3: Property Rights, Transaction costs & Institution 1. *Coase, R. The Problem of Social cost, Chapter 6 in dorfman and Dorfman, 1977, Economics of the Environment, W.W. Norton and Company, Inc., pp Demsetz, H. Toward A Theory of Property Rights, American Economic Review 57 (1967): *Bromley, D.W. Property Rules, Liabiltiy Rules and Environmental Economics, Journal of Economic issues (1978): Randall, A. Property Rights and Socio Micro-Economics, Natural Resources Journal 15 (1975): Ciriacy-Wantrup, S.V. and R.C. Bishop. Common Property as a Concept in Natural Resource Policy, Natural Resources Journal 15 (1975): *Boulding, K.E. Prices and Other Institutions, Journal of Economics Issues 11 (1977): Howe, C., Common Property Resources: Theory and Examples, Chapter 12, Natural Resource Economics, John Wiley & Sons. Section 4: Market Failures and Externalities 1. Baumol, W.J. and W.E. Oates, Externalities: Definitions, Significant Types and Optimal-Pricing Conditions, Chapter 3 in The Theory of Environmental Policy, Prentice-Hall.
3 2. Randall, A. The Problem of Market Failure, Natural Resources Journal, 23 (1983): Dahlman, C.J. The Problem of Externality, Journal of Law and Economics, 22(1979): Wolf, C.J. A Theory of Nonmarket Failure: Framework for Implementation Analysis, Journal of Law and Economics 20(1979): Section 5: Theory of Resource Allocation 1. Hotelling, H. the Economics of Exhaustible Resources, Journal of Political Economy 39(1931): Devarajan S. and A.C. Fisher. Hotelling s Economics of Exhaustible Resources: Fifty Years Later, Journal of Economic Literature 19(1982): McIerney, J. The Simple Analytics of Natural Resource Economics, Journal of Agricultural Economics 27(1976): McInerey, J. On the Optimal Policy for Exploiting Renewable Resource Stocks: Journal of Agricultural Economics 29(1978): Slade, M.E. Tax Policy and the Supply of Exhaustible Resources: Theory and Practice, Land Economics 60(1984): Section 6: Analytics of Resource Allocation and Policy Evaluation 1. Neher, Chapter 9-Resource Pricing. Stock Resources 1. Neher, Chapter 4-The Mine. 2. Neher, Chapter 15- Costless Production Renewable Resources 1. Neher, Chapter 1- The Fishery. 2. Neher, Chapter 11-Search Fisheries
4 3. Lee, D.J. and C.M. Gallagher. Optimal Use Management of A Coral Reef: A Study of Hanauma Bay, Hawaii, Western Agricultural Economics Association, Kennedy, J.O.S.-Chapter 1. The Management of Agricultural and Natural Resource System. 5. Kennedy, J.O.S.-Chapter 2. Introduction to Dynamic Programming. Section 7: Discounting, Conservation and Intertemporal Choice 1. Howe, C., Intertemporal Comparisons of Well-Beings: Efficiency, Equity, and Risk, Chapter 8, Natural Resource Economics, John Wiley & sons. 2. Baumol, W.J. On the Social Rate of Discount, American Economic Review 58(1968): Farzin, Y.H. The Effect of the Discount Rate on Depletion of Exhaustible Resources, Journal of Political Economy 92(1984): Ferejohn, J. and T.Page. on the Foundations of Intertemporal Choice, A.J.A.E. 60(1978) Chapman, D. Computation Techniques for Intertemporal Allocation of Nautral Resources, A.J.A.E. 69(1987): Rowse, J. Does an Exhaustible Resource Usually Have Many Near-Optimal Depletion Paths? A.J.A.E. 70(1988): Howarth, R.B. and R.B. Norgaard. Intergenerational Resource Rights, Efficiency and Social Optimality, Land Economics 66(1990):1-11. Section 8: Uncertainty, Irreversibility and Option Value 1. Arrow, K.J. and A.C. Fisher. Environmental Preservation, Uncertanity, and Irreversibility, Quarterly Journal of Economics 88(1974): Fisher, A.C. and J.V. Krutilla. Valuing Long Run Ecological Consequences and Irreversibilities, Journal of Environmental Economics and Management 1(1974): Cory, D.C. and B.C> Saliba. Requiem for Option Value, Land Economics 63(1987) Fisher, A.C. and W.M. Hanemann. Quasi-Option Value: Some Misconceptions Dispelled, Journal of Environmental Economics and Management 14(1987):
5 Section 9: Valuation of Environmental Resources 1. Smith, V.K., W.H. Desvousges, and M.P. McGivney. Estimating Water Quality Benefits: An Econometric Analysis, Southern Economics Journal 50(1983): Ward, F.A. and J.B. Loomis. The Travel Cost Demand Model as and Environmental Policy Assessment Tool: A Review of Literature, Western Journal of Agricultural Economics 11(1986): McConnell, K.E. Doule Counting in Hedonic and Travel Cost Models, Land Economics 66(1990): Daubert, J.T. and R.A. Young. Recreational Demands for Maintaining Instream Flows: A Contigent Valuation Approach, A.J.A.E. (1981): Brookshire, D.S., A.Randall, and J.R.Stoll. Valuing Increments and Decrements in Natural Resource Service Flows, A.J.A.E. 70(1980): Boyle, K.J. and R.C. Bishop. Welfare Measurements Using Contingent Valuation: A Comparison of Techniques, A.J.A.E. 70(1988): Walsh, R.G., D.M. Johnson and John R. McKean. Issues in Nonmarket Valuation and Policy Application: A Retrospective Glance, Western Journal of Agricultural Economics, 14(1989): Eberle, W.D. and F.G. Hayden. Critique of Contingent Valuation and Travel Cost Methods for Valuing Natural Resources and Ecosystems, Journal of Economic Issues, 25(1991): McFadden, D. Contigent Valuation and Social Choice. American Journal of Agricultural Economics 76(1994):
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