ARE 262 Reading List

Department of Agricultural and Resource Economics

University of California at Berkeley

ARE 262

Environmental Economics

W. Michael Hanemann

Spring Semester, 1996

READING LIST ON THE ECONOMIC THEORY OF EXTERNALITIES

(* recommended)

I BASIC THEORY OF ENVIRONMENTAL POLICY UNDER CERTAINTY

A. BACKGROUND: WELFARE ECONOMICS

* Richard W. Tresch, Public Finance: A Normative Theory, Business Publications Inc., 1981, pp. 4-9, 14-43.

Alan M. Feldman, Welfare Economics and Social Choice Theory, Martinus Nijhoff Publishing 1980, Chaps 1-4, 8-10.

American Economics Association, Readings in Welfare Economics, Irwin 1969, papers by Bergson, Arrow and Hotelling.

Dieter Bos, Pricing and Price Regulation Elsevier, 1994, Chaps 2-4.

* Alan Randall, "What Practicing Agricultural Economists Really Need to Know About Methodology," American Journal of Agricultural Economics, 75, October 1993, 48-59.

B. THE BASIC THEORY OF EXTERNALITIES

* James Meade, EJ, vol. 62, No. 245, 1952, reprinted in AEA Readings in Welfare Economics, pp. 54-67.

H. Scott Gordon, "Economic Theory of a Common Property Resource: The Fishery", JPE 1954

P.A. Samuelson, Pure Theory of Public Expenditure" R.E.Stat. 1954 (in AEA Readings)

* F.M. Bator, "The Anatomy of Market Failure," QJE, vol. 70, No. 3, August 1958, 351-79.

R. Coase, "The Problem of Social Cost," J. Law & Econ., Oct. 1960.

* F. A. Klink, "Pigou and Coase Reconsidered," Land Economics, August 1994,70(3) 386-90.

J. M. Buchanan and W. C. Stubblebine, "Externality," Economica 29 (1962) reprinted in AEA Readings in Welfare Economics

H. Mohring and J. H. Boyd, "Analyzing 'Externalities': 'Direct Interaction' vs 'Asset Utilization' Frameworks," Economica November, 1971.

* Tresch, op. cit. pp. 90-141.

K.J. Arrow, "The Organization of Economic Activity: Issues Pertinent to the Choice of Market versus Non-Market Allocation," in The Analysis and Evaluation of Public Expenditures, The PPB System, Vol. I Washington, D.C. U.S. Congress, Joint Economic Committee, 1969, pp. 106-149.

* D.M.G. Newberry, "Externalities: The Theory of Environmental Policy," in G.A. Hughes and G.M. Heal (eds), Public Policy and the Tax System, 1980.

Robert Park, "Pareto Irrelevant Externalities," Journal of Economic Theory 54 (1991) 165-179

C. SOME COMPLICATIONS

Intermediaries

* Sally Holterman, "Alternative Tax Systems to Correct for Externalities and the Efficiency of Paying Compensation," Economica, 43, Feb. 1976, 1-16; with a comment by L. Young Economica, 44, November 1977, 415-420.

* Tresch, op. cit. pp 170-175

J. Bird, "The Transferability and Depletability of Externalities," JEEM 14 (1987) 54-57

D. Shaw and R. Shaw, "The Resistability and Shiftability of Depletable Extewrnalities," JEEM 20 (1991) 224-233

Nonconvexities

* W.J. Baumol, "On Taxation and the Control of Externalities," AER, vol. 62, June 1972, pp. 307-322.

___________ and D. F. Bradford, "Detrimental Externalities and Non-Convexity of the Production Set," Economica, May 1972.

* D. Starrett, "Fundamental Nonconvexities in the Theory of Externalities," JET, 4, February 1972, 180-194.

* S. Rose-Ackerman, "Effluent Charges: A Critique," Canadian J. Econ., 1973, 6(4), pp. 512-528.

P. Burrows, "Nonconvexity Induced by External Costs on Production: Theoretical Curio or Policy Dilemma?" JEEM 13 (1986).

Entry and exit

* D.W. Carlton and G.C. Loury, " The Limitation of Pigouvian Taxes as a Long-Run Remedy for Externalities," QJE, November, 1980, pp. 559-566.

Daniel F. Spulber, "Effluent Regulation and Long-Run Optimality." JEEM 12 (June 1985) 103-116.

* Robert E. Kohn, "Efficient Scale of the Pollution-Abating Firm." Land Economics 64:1 (February 1988) 53-61.

* A.M. Polinsky, "Notes on the Symmetry of Taxes and Subsidies in Pollution Control," Canadian J. Econ., 1979, 12(1), pp. 75-82.

Anomalies

Peter A. Diamond and James A. Mirrlees, "Aggregate Production with Consumption Externalities," QJE, February 1973.

* E. Sadka, "A Note on Aggregate Production with Consumption Externalities," J. Public Econ. (9) 1978, 101-105.

* Agnar Sandmo, "Anomaly and Stability in the Theory of Externalities," QJE, June 1980, 799-807.

J.E. Kwoka, "The Limits of Market-Oriented Regulatory Techniques," QJE, November 1983.

General Equilibrium Analysis

K.L. Wertz, "Short-Run Effects of an Increased Effluent Charge in a Competitive Market," Canadian J. Econ., November 1974.

* Michael Braulke,"On the Comparative Statics of a Competitive Industry." American Economic Review Vol. 77 No. 3 (June 1987) 479-485.

David de Meza, "The Efficacy of Effluent Charges." Canadian Journal of Economics XXI, No. 1 (February 1988) 182-6.

* R. Brannlund and B. Kristrom, "Effluent Charges and Distributional Effects in Partial General Equilibrium Models," mimeo, Stockholm School of Economics, Nov. 1992.

Incidence

* Laurence Kotlikoff and Lawrence Summers, "Tax Incidence." Chapter 16 in A.J. Auerbach and M. Feldstein (eds) Handbook of Public Finance, vol.II Elsevier (1987) 1043-1067.

* Gary W. Yohe, "The Backward Incidence of Pollution Control -- Some Comparative Statics in a General Equilibrium," JEEM 6 (1979) 187-198.

Y. Kitabatake, "Backward Incidence of Pollution Damage Compensation Policy," JEEM 17 (1989).

V. Rapanos, "A Note on Externalities and Taxation," Canadian J. Econ Feb 1992.

A. Batabyal, Environmental Pollution and Unilateral Control in an Open Economy," Natural Resources Modelling Fall 1991.

D. SECOND BEST PIGOUVIAN TAXES

Revenue Constraint

* Agnar Sandmo, "Optimal Taxation: An Introduction to the Literature."Journal of Public Economics 6 (1976) 37-54.

Agnar Sandmo, "A Reinterpretation of Elasticity Formulae in Optimum Tax Theory," Economica 54 (1987) 89-96.

Ranjan Ray, "Sensitivity of "Optimal" Commodity Tax Rates to Alternative Demand Functional Forms." Journal of Public Economics 31 (1986) 253-268.

* W. Pauwels, "Correct and Incorrect Measures of the Deadweight Loss of Taxation," Public Finance (1986) 267-76.

* A. Sandmo, "Optimal Taxation in the Presence of Externalities," Swedish J. Econ., 1975.

A. Sadka, "The Distributional Aspects of a Tax on Externalities," European Econ. Rev. 14 (1980).

* D. Terkla, "The Efficiency Value of Effluent Taxation," JEEM 11 (1984), 107-123.

D. Lee and W. Misiolek, "Substituting Pollution Taxation for General Taxation: Some Implications for Efficiency in Pollution Taxation," JEEM 13 (1986) 338-47.

Don Fullerton, "Reconciling Estimates of the Marginal Welfare Cost of Taxation," AER March 1991.

Indirect vs Direct Taxes

* Sally Holterman, "Alternative Tax Systems to Correct for Externalities and the Efficiency of Paying Compensation," Economica, Feb. 1976, with a comment by L. Young Economica, 1977.

Tresch op. cit. pp. 141-170.

* J. Green and E. Sheshinski, "Direct versus Indirect Remedies for Externalities," JPE, August 1976.

Robert Mendelsohn, "Regulating Heterogeneous Emissions," JEEM 13 (1986) 301-12.

Monopolist Polluter

Dwight Lee, "Efficiency of Pollution Taxation and Market Structure," JEEM 2 (1976).

* A. H. Barnett, "The Pigouvian Tax Rule under Monopoly," AER December 1980, 1037-41.

Robert Martin, "Externality Regulation and the Monopoly Firm," J. Pub. Econ 29 (1986) 347-62.

* Wallace E. Oates and Diana L. Strassman, "Effluent Fees and Market Structure," J. Public Econ. 24 (1984).

Other

A. M. Polinsky and S. Shavell, "Pigouvian Taxation and Administrative Costs," J. Public Econ. 19 (1982).

Dwight Lee, "Rent-Seeking and Its Implications for Pollution Taxation," Southern Econ J. January 1985.

E. ENVIRONMENTAL QUALITY STANDARDS

* Peter Bohm and Clifford S. Russell, "Comparative Analysis of Alternative Policy Instruments," in A.V. Kneese and J. L. Sweeney (eds), Handbook of Natural Resource and Energy Economics Vol. I North-Holland, 1985, 395-460.

R.E. Kohn, "Emissions Standards and Price Distortions," JEEM, 1977.

J. Harford and S. Ogura, "Pollution Taxes: A Continuum of Quasi-Optimal Solutions," JEEM 10 (1983).

Impact on Technological Progress in Abatement

A.M. Freeman, "Technology-Based Effluent Standards: The U.S. Case," Water Resources Research, February 1980.

Paul Downing and Lawrence White, "Innovation in Pollution Control." JEEM 13 (1986) 18-29.

Scott Milliman and Raymond Prince, "Firm Incentives to Promote Technological Change in Pollution Control." JEEM 17 (1989) 247-265

Richard McHugh, "The Potential for Private Cost-Increasing Technological Innovation under a Tax-Based, Economic Incentive Pollution Control Policy," Land Economics, February 1985.

* Wesley A. Magat, "Pollution Control and Technological Advances: A Dynamic Model of the Firm," JEEM 5 (1978) 1-25.

Political Economy of Standards

* J.M. Buchanan and G. Tullock, "Polluters' Profits and Political Response: Direct Controls versus Taxes," AER March, 1975, pp. 139-147; with a comment by G. Yohe and a reply AER, 1976, pp. 981-984.

Donald N. Dewees, "Instrument Choice in Environmental Policy," Economic Inquiry, January 1983.

Targetting

* Albert L. Nichols, Targeting Economic Incentives for Environmental Protection, MIT Press, 1984, pp. 16-26 and 69-99. Also by Nichols, "Targeting Transfers through Restrictions on Recipients," AEA, May 1982, pp. 372-77.

David Besanko, "Performance versus Design Standards in the Regulation of Pollution," Journal of Public Economics 34 (1987) pp. 19-44.

Gloria Helfand, "Standards versus Standards: The Effects of Different Pollution Restrictions," AER June 1991.

II SOME COASIAN THEMES

A. NON-COOPERATIVE GAME THEORY

Peter C. Ordeshook, Game Theory and Political Theory: An Introduction, Cambridge, 1986.

James W. Friedman, Game Theory with Applications to Economics, 2nd Edition Oxford, 1990 (Chapters 2-4).

Drew Fudenberg and Jean Tirole, Game Theory MIT Press, 1991 (Chapters )

Roger Myerson, Game Theory Harvard University, 1991 (Chaps 2,3,6)

Robert Gibbons, Game Theory for Applied Economists Princeton University Press, 1992 (Chapter 3)

J. B. Kadane and P. D. Larkey, "The Confusion of Is and Ought in Game Theoretic Contexts," Management Science December 1983.

B. SEPARABILITY, BARGAINING & NASH EQUILIBRIUM

* O. A. Davis and A. Whinston, "Externalities, Welfare and the Theory of Games," JPE, 1962, 241-262.

Ken-Ichi Inada and Kiyoshi Kuga, "Limitations on the Coase Theorem on Liability Rules," JET 6 (1973).

J.R. Marchand and K.P. Russell, "Externalities, Liability, Separability and Resource Allocation," AER, 1973; with comments by P.R.P. Coelho, A. Gifford and C. C. Stone, and P. Greenwood, C. Ingene and G. Horsfield, and a reply AER, 1975

* W.D. Schulze and R. C. D'Arge, "The Coase Proposition, Information Constraints and Long- Run Equilibrium," AER, 64(4), Sept. 1974, 763-72; comment by H.B. Hansmann and a reply in AER, June 1977, 67(3), 462-3; 459-61.

J. H. Hamilton, Eytan Sheshinski, and S. M. Slutsky, "Production Externalities and Long-Run Equilibria: Bargaining and Pigovian Taxation," Economic Inquiry July 1989.

* R. Cornes and T. Sandler, "Externalities, Expectations, and Pigouvian taxes," JEEM 12 (1985); see also their paper in J. Public Econ 1984 and their book

John Guttman, "Understanding Collective Action," AER May 1978, pp. 251-5

C. LIABILITY REGIMES

A.M. Polinsky, "Controlling Externalities and Protecting Entitlements: Property Rights, Liability Rules, and Tax-Subsidy Approaches," J. Legal Studies, January 1979.

D. BARGAINING & MODERN GAME THEORY

* William Samuelson, "A Comment on the Coase Theorem." Also his paper, "Bargaining Under Asymmetric Information," Econometrica, 52:4 (July, 1984), 985-1005; and Gibbons, pp 158-163.

Fudenberg & Tirole, Chapter 10, "Sequential Bargaining and Incomplete Information."

Martin Osborne and Ariel Rubinstein, Bargaining and Markets Academic Press, 1990.

* Joseph Farrell, "Information and the Coase Theorem," Economic Perspectives, Fall, 1:2, 1987, 113-129.

E. COOPERATIVE GAMES

* Martin Shubik, A Game-Theoretic Approach to Political Economy, MIT Press, 1984, Chap. 19.

* Alvin K. Klevorick and Gerald H. Kramer, "Social Choice on Pollution Management: The Genossenschaften," J. Public Economics 2 (1973) 101-146.

Jonathan Cave and Stephen W. Salant, "Cartels That Vote: Agricultural Marketing Boards and Induced Voting Behavior." in Elizabeth Bailey (ed) Public Regulation: New Perspectives on Institutions and Policies MIT Press 1987

F. EXPERIMENTAL TESTS OF THE COASE THEOREM

* E. Hoffman and M. L. Spizer, "The Coase Theorem: Some Experimental tests," J. Law and Econ., April 1982, 73-98. see also comment by Glenn Harrison and Michael McKee, "Experimental Evaluation of the Coase Theorem," J. Law and Econ. October 1985, 653-70.

Charles Plott, "Externalities and Corrective Policies in Experimental Markets," EJ March 1983. see also follow-up by Glenn W. Harrison et al. "Coasian Solutions to the Externality Problem in Experimental Markets," EJ June 1987.

Douglas D. Davis and Charles A. Holt, Experimental Economics Princeton University Press, 1993. Chapter 5 (especially pp 241-275) and Chapter 6.

Vernon L. Smith, "Experimental Economics: Induced Value Theory," AER May 1976, 274-9; and "Microeconomic Systems as an Experimental Science," AER 1982, 923-955.

III ENVIRONMENTAL REGULATION IN THE FACE OF UNCERTAINTY

A. PRICES VERSUS QUANTITIES

* M. L. Weitzman, "Prices Versus Quantities," R.E. Stud., October 1974, 477-491; with a comment by J. M. Malcomson and a reply in R.E. Stud., February 1978, 203-207.

J. L. Laffont, "More on Prices Versus Quantities," R.E. Stud., February 1977.

G.W. Yohe, "Substitution and the Control of Pollution," JEEM, 1976.3

_________, "Single-Valued Control of an intermediate Good Under Uncertainty," Int. Econ. Rev., February 1977.

* Peter J. Morgan, "Alternative Policy Instruments Under Uncertainty: A Programming Model of Toxic Pollution Control," JEEM, 10, 1983, 248-269.

* William D. Watson and Ronald D. Ridker, "Losses from Effluent Taxes and Quotas Under Uncertainty," JEEM 11 (1984), 310-326.

B. NONLINEAR TAX SCHEDULES

* N. J. Ireland, "Ideal Prices Versus Quantities," R.E. Stud., February, 1977, 183-186.

* M. Weitzman, "Optimal Rewards for Economic Regulation," AER, 1978, 683-691.

G.W. Yohe, "Should Sliding Control Be the Next Generation of Pollution Controls?" JPE, 1981.

Evan F. Koenig, "Indirect Methods for Regulating Externalities Under Uncertainty," QJE, May 1985.

* M.J. Roberts and M. Spence, "Effluent Charges and Licenses Under Uncertainty," J. Public Econ., 5, 1976, 193-208.

Jeffrey E. Harris, "Taxing Tar and Nicotine," AER, June 1980.

C. EFFLUENT TAXES AND COST REVELATION

* E. Kwerel, "To Tell the Truth," Review of Economic Studies, Symposium Volume, October 1977, pp. 595-601.

* P. Dasgupta, P. Hammond and E. Maskin, "On Imperfect Information and Pollution Control," Review of Economic Studies (1980) pp. 857-60, with a comment by R. Repullo, Review of Economic Studies (1982) pp. 483-4.

R.A. Collinge and M. J. Bailey, "Optimal Quasi-Market Choice in the Presence of Pollution Externalities," JEEM (1983) pp. 221-32.

* Rafael Rob, "The Demand Revealing Mechanism" in Larry Samuelson (ed) Microeconomic Theory, Kluwer-Nijhoff Publishing, 1986, pp. 121-37.

Drew Fudenberg & Jean Tirole, Game Theory MIT Press, 1991. Chapter 7 on Mechanism Design.

David P. Baron, "Design of Regulatory Mechanisms and Institutions" Chapter 24 of R. Schmalensee and R.D. Willig (eds), Handbook of Industrial Organization, Volume II Elsevier, 1989.

* David P. Baron, "Regulation of Prices and Pollution under Incomplete Information," Journal of Public Economics (1985), pp. 211-31 and "Noncooperative Regulation of a Nonlocalized Externality" Rand Journal of Economics Winter, 16:4, 1985, pp. 553-68.

Daniel F. Spulber, "Optimal Environmental Regulation Under Asymmetric Information," Journal of Public Economics 35 (1988) 163-181.

D. SETTING STANDARDS WITH IMPERFECT ENFORCEMENT

P. Downing and W. Watson, "The Economics of Enforcing Air Pollution Controls," JEEM 1 (1974) 219-36.

Jon D. Harford, "Firm Behavior Under Imperfectly Enforceable Pollution Standards and Taxes," JEEM 5 (1978) 26-43.

* W. Kip Viscusi and Richard J. Zeckhauser, "Optimal Standards with Incomplete Enforcement," Public Policy, 27 No. 4 (Fall 1979) 437-456.

S. Linder and M. McBride, "Enforcement Costs and Regulatory Reform: The Agency and Firm Response," JEEM 11 (1984) 327-46.

* Carol Adair Jones, "Standard Setting With Incomplete Enforcement Revisited," Journal of Policy Analysis and Management, Vol. 8 No. 1 (1989) 72-87.

Carol Adair Jones and Suzanne Scotchmer, "The Social Cost of Uniform Regulatory Standards in a Hierarchical Government" JEEM 19 (1990) 61-72.

E. ECONOMICS OF ENFORCING POLLUTION CONTROL LAWS

Gary Becker, "Crime and Punishment: An Economic Approach" Journal of Political Economy, 76 (1968) 169-217

* A.M. Polinsky and S. Shavell, "The Optimal Tradeoff Between the Probability and Magnitude of Fines," AER 69,5 (1979) 880-91.

A.M. Polinsky and S. Shavell, "the Optimal Use of Fines and Imprisonment," Journal of Public Economics 24 (1984) 89-99.

S. Shavell, "The Optimal Use of Nonmonetary Sanctions as a Deterrent," AER 77,4 (1987) 584-92.

L. Martin, "The Optimal Magnitude and Enforcement of Evadeable Pigouvian Charges," Public Finance 39 (1984) 347-57.

Dwight R. Lee, "The Economics of Enforcing Pollution Taxation," JEEM 11 (184) 147-60.

P. Downing, "Bargaining in Pollution Control," Policy Study J. 11 (1983) 577-86.

Jon D. Harford, "Self-Reporting of Pollution and the Firm's Behavior under Imperfectly Enforceable Regulations," JEEM 14 (1987) 293-303.

* Wesley A. Magat and W. Kip Viscusi, "Effectiveness of the EPA's Regulatory Enforcement: The Case of Industrial Effluent Standards." Journal of Law and Economics, vol. 33, October, 1990, 331-360.

* John T. Scholz, "Cooperation, Deterrence, and the Ecology of Regulatory Enforcement," Law and Society Review 18:2 (1984).

Clifford S. Russell, W. Harrington and W. J. Vaughan, Enforcing Pollution Control Laws, Johns Hopkins University Press, 1986.

* Clifford S. Russell, "Game Models for Structuring Monitoring and Enforcement Systems," Natural Resource Modelling, 4,2 (Spring 1990) 143-173.

* Winston Harrington, "Enforcement Leverage When Penalties are Restricted," Journal of Public Economics, 1988.

F. DYNAMIC REGULATION AND CONSISTENCY

Gardner Brown and Brian Mar, "Dynamic Economic Efficiency of Water Quality Standards and Charges," Water Resources Research, December 1968, pp. 1153-9.

Jon D. Harford, "Adjustment Costs and Optimal Waste Treatment." JEEM, October 1976.

Brian Beavis and Ian Dobbs, "The Dynamics of Optimal Environmental Regulation," Journal of Economic Dynamics and Control, November 1986, pp. 415-23.

R. Strotz, "Myopia and Inconsistency in Dynamic Utility Maximization," R.E. Stud., 1956.

E. C. Prescott, "The Multi-period Control Problem under Uncertainty," Econometrica 40 (1972) 1043-58.

* Warwick J. McKibbin, "Time-Consistent Policy: A Survey of the Issues," Australian Economic Papers, December 1989, 167-180.

* F. van der Ploeg, "Inefficiency of Credible Strategies in Oligopolistic Resource Markets with Uncertainty." Jounral of Economic Dynamics and Control 11 (1987) 123-145.

G. DYNAMIC, STOCHASTIC REGULATION

William D. Watson and Ronald G. Ridker, "Revising Water Pollution Standards in an Uncertain World," Land Economics, November 1981.

Charles Plourde and David Yeung, "A Model of Industrial Pollution in a Stochastic Environment," JEEM 16 (1989) 97-105.

* Gordon Rausser, "Active Learning, Control Theory, and Agricultural Policy," AJAE, 1978, 476-490.

* James J. Opaluch, "Dynamic Aspects of Effluent Taxation Under Uncertaint," JEEM 11 (1984) 1-13

* Anthony Fisher and Michael Hanemann, "Information and the Dynamics of Environmental protection." Scandinavian Journal of Economics (1990) 399-314.

A.M. Parma and R. B. Deriso, "Experimental Harvesting of Cyclic Stocks in the Face of Alternative Recruitment Hypotheses." Canadian Journal of Aquatic and Fisheries Sciences 1990

Robert L. McDonald and Daniel Siegel, "The Value of Waiting to Invest." Quarterly Journal of Economics 1001 (1986) 707-727

Robert S. Pindyck, "Irreversibility, Uncertainty and Investment." Journal of Economic Literature 1991.

Avinash Dixit, "Irreversible Investment with Price Ceilings," JPE 99 (1991) 541-57.

______________, "Investment and Hysteresis," Journal of Economic Perspectives Winter 1992, 107-132.

* K. Hasset and G. Metcalf, Tax Policy, Irreversibility and Energy Conservation Investment. mimeo, January 1992

H. GAME THEORY AND THE COMMONS

Carlisle F. Runge, "Common Property Externalities: Isolation, Assurance, and Resource Depletion in a Traditional Grazing Context," AJAE, November 1981.

Paul Seabright, Is Co-operation Habit Forming?, mimeo, 1990.

* Jonathan Bendor and Dilip Mookherjee, "Institutional Structure and the Logic of Ongoing Collective Action," American Political Science Review, March 1987.

* Robert Wade, "The Management of Common Property Resources: Collective Action as an Alternative to Privatization or State Regulation," Cambridge Journal of Economics, 11 (1987) 95-106.

I. THE COASE THEOREM UNDER UNCERTAINTY: LIABILITY APPROACHES

R. E. Just and D. Zilberman, "Asymmetry of Taxes and Subsidies in Regulating Stochastic Emissions," QJE, February 1979.

Steven Shavell, "Liability for Harm versus Regulation of Safety," Journal of Legal Studies, June 1984 .

_____________, "A Model of the Optimal Use of Liability and Safety Regulation," Rand Journal of Economics, Summer 1984.

Kathleen Segerson, "Risk-Sharing and Liability in the Control of Stochastic Externalities," Marine Resource Economics 4 (1987).

Dennis Epple and Michael Visscher, "Environmental Pollution: Modeling Occurrence, Detection and Deterrence," Journal of Law and Economics, April 1984.

Mark A. Cohen, "The Costs and Benefits of Oil Spill Prevention and Enforcement," JEEM 12 (1986).

_____________, "Optimal Enforcement Strategy to Prevent Oil Spills: An Application of a Principal-Agent Model With Moral Hazard," Journal of Law and Economics, April,1987.

Michael Muoghalu, David Robinson and John Glascock, Hazardous Waste Lawsuits, Stockholder Returns, and Deterrence, Southern Economic Journal, October 1990.

IV. SOME ISSUES IN POLLUTION CONTROL POLICY

A. OVERVIEW OF CURRENT POLLUTION CONTROL POLICIES

Paul R. Portney (ed), Public Policies for Environmental Protection, Washington, D.C.: Resources for the Future, 1990.

Marc Landy, Marc Roberts, and Stephen Thomas, The Environmental Protection Agency: Asking The Wrong Questions, New York: Oxford University Press, 1990.

Robert W. Hahn, A Primer on Environmental Policy Design, New York: Harwood Publishers, 1989.

Timothy E. Wirth and John Heinz, Project 88: Harnessing Market Forces to Protect Our Environment, Washington, DC, 1988.

OECD, The Application of Economic Instruments for Environmental Protection Paris, 1989.

Government of Canada, Canada's Green Plan, Ottawa, 1990.

B. EMPIRICAL STUDIES OF THE IMPACTS OF TAXES AND STANDARDS.

William Sims, "The Resoponse of Firms to Pollution Charges," Canadian Journal of Economics, February 1979.

____________, "The Welfare Loss of an Input Market Distortion: The Case of Sewer Charges," Land Economics, August 1979.

Peter Pashigian, "The Effect of Environmental regulation on Optimal Plant Size and Factor Shares," Journal of Law and Economics, April 1984.

Karl-Goran Maler and Clas Olsson, "The Cost-Effectiveness of Different Solutions to the Eurpoean Sulphur Problem," European Review of Agricultural Economics 17 (1990).

Dale W. Jorgenson and Peter J. Wilcoxen, "Intertemporal and General Equilibrium Modeling of US Environmental Regulation," Journal of Policy Modeling 12:4 (1990).

Alan Ingham and Alistair Ulph, "Carbon Taxes and UK Manufacturing Sector," mimeo, 1990.

Peter Bohm, "Efficiency Aspects of Imperfect Treaties on Global Public Bads: Lessons from the Montreal Protocol," mimeo, 1990.

David M. Newbery, "Acid Rain," mimeo, 1991.

Gene M. Grossman and Alan B. Krueger, "Environmenmtal Impacts of a North American Free Trade Association," mimeo, 1991.

Doede Wiersma, "Static and Dynamic Efficiency of Pollution Control Strategies," Environmental and Resource Economics 1 (1991).

James M. Poterba, "Tax Policy to Combat Global Warming: On designing a Carbon Tax," and John Whalley and Randall Wigle, "The International Incidence of Carbon Taxes," in Rudiger Dornbusch and James M. Poterba (eds), Global Warming: Economic Policy Responses, MIT Press, 1991.

Robert N. Stavins and Adam B. Jaffe, "Forested Wetland Depletion in the United States: An Analysis of Unintended Conseuqneces of Federal Policy and Programs," mimeo, 1988.

C. EMISSIONS MARKETS

W. David Montgomery, "Markets in Licenses and Efficient Pollution Control Programs," JET 5 (1972) 395-418.

Thomas H. Tietenberg, "Transferable Discharge Permits and the Control of Stationary Source Air Pollution: A Survey and a Synthesis," Land Economics, November 1980; comment by D.R. Ryan and replay, November 1981; comment by T.M. Crone and replies by Ryan and Tietenberg, February 1983.

E.F. Joeres and Martin H. David (eds), Buying a Better Environment: Cost-Effective Regulation Through Permit Trading, University of Wisconsin Press, 1983.

Randolph M. Lyon, "Auctions and Alternative Procedures for Allocating Pollution Rights," Land Economics, February 1982.

Scott E. Atkinson, "Marketable Pollution Permits and Acid Rain Externalities," Canadian Journal of Economics, November 1983; comment by Oates and McGartland and reply, August 1985.

Alan Krupnick, Wallace E. Oates and Eric Van De Berg, "On Marketable Air Pollution Permits: The Case for a System of Pollution Offsets," JEEM 10, 1983.

T.H. Tietenberg, Emissions Trading: An Exercise in Reforming Pollution Policy, Resources for the Future, Inc., 1985.

Albert M. McGartland and Wallace E. Oates, "Marketable Permits for the Prevention of Environmental Deterioration," JEEM 12 (1985).

Randolph M. Lyon, "Equilibrium Properties of Auctions and Alternative Procedures for Allocating Transferable Permits, JEEM 13 (1986).

Albert McGartland, "A Comparison of Two Marketable Discharge Permits Systems," JEEM 15 (1988).

James A. Roumasset and Kirk K. Smith, "Exposure Trading: An Approach to More Efficient Air Pollution Control," JEEM 18 (1990) 276-291, with a Comment by Robert Kohn, JEEM 21 (1991) 82-91.

David A. Malueg, "Emission Credit Trading and the Incentive to Adopt New Pollution Abatement Technology, JEEM 16 (1989).

W. Misiolek & H. Elder, "Exclusionary Manipulation of Markets for Pollution Rights," JEEM 16 (1989) 156-166

Scott Atkinson & Tom Tietenberg, "Market Failrue in Incentive-Based Regulation: The Case of Emissions Trading," JEEM 21 (1991) 17-31

Robert W. Hahn, "A New Approach to the Design of Regulation in the Presence of Multiple Objectives, JEEM 17 (1989).

_________, "Economic Prescriptions for Environmental Problems: How the Patient Followed the Doctor's Orders," Journal of Economic Perspectives, Spring 1989.

_________, "Regulatory Constraints on Environmental Markets, Journal of Public Economics 42 (1990).

D. THE ECONOMICS OF POLICY FORMATION

C.G. Veljanovski, "The Market for Regulatory Enforcement," Economics Journal Supplement (1983), pp. 123-129.

B. Yandle, "Economic Agents and the Level of Pollution Control," Public Choice (1983), pp. 105-109.

Michael T. Maloney and Robert E. McCormick, "A Positive Theory of Environmental Quality Regulation," Journal of Law and Economics, April 1982, pp. 99-123.

P.L. Joskow and R.G. Noll, "Regulation in Theory and Practice: An Overview," in G. Framm, ed., Studies in Public Regulation, Cambridge: MIT Press, 1981, pp. 21-28.

R.A. Leone and J.E. Jackson, "The Political Economy of Federal Regulatory Activity: The Case of Water Pollution Controls," in G. Framm, ed., Studies in Public Regulation, Cambridge: MIT Press, 1981.

UNDER CONSTRUCTION