Cost-Benefit Analysis (CBA) is an increasingly important form of environmental impact assessment. CBA has long been used for analysing existing air pollution policy proposals and ensuring that the benefits of proposed policies outweigh the costs. However, with the Clean Air Policy package proposed in 2013, the European Commission reversed the conventional approach. Instead of using CBA to calculate economic welfare of proposed emission levels, they used CBA to calculate a precise economic welfare-maximising solution and used the corresponding calculated emission levels as basis for their proposal.Despite the year 2016 adoption of much of the policy package proposal, air pollution will still be problematic in Europe in year 2030. It is expected that most parts of the European Union will experience air pollution levels above those recommended in the new air quality guideline values recently updated by the World Health Organization (WHO). The European Commission is now revising the air quality targets for the European Union, and it reasonable to assume that CBA will once again be influential.At the same time as the influence of CBA has grown with respect to air pollution policy, the literature criticising standard welfare economics and CBA as a concept has increased, albeit in an unfocused way. Given these two opposing trends, it is timely to compile a variety of perspectives and an in-depth discussion as to whether this current use of CBA to support air pollution policies is scientifically robust.This conceptual paper discusses the implicit methodological choices made when using an economic welfare-maximising CBA as an impact assessment tool to set targets in air quality policy proposals. The discussion applies an air pollution CBA-perspective to the existing critique of CBA and welfare economics and adds seminal papers from a well-established body of criticism of economic analysis. Perspectives from the disciplines of behavioural economics, economic psychology, and complexity economics are included and compared in terms of the way in which standard economics represents economic decision-making. This paper is the first to include perspectives from all these disciplines in a discussion of applied air pollution CBAs. The body of criticism is contrasted with theories from science-technology-society studies and an empirical description of the actual process from the production of an impact assessment to a final policy agreement. Potential pathways are discussed, including a discussion of alternatives to the current approach.On balance, minor adjustments, major adjustments (requiring further research), as well as methodological improvements are needed. Desirable minor adjustments include the need to avoid perfect foresight CBAs. It is important to include a range of potential air policy ambitions that are contingent on economic development, climate policy development, and equity preferences. Furthermore, the CBA should be based on a combination of climate and air pollution control options, and not just air pollution control. Appropriate major adjustments include better representation of technology learning, and potentially positive system feedbacks from, for example, electric vehicles. Another major adjustment is the monetisation and inclusion of all known environmental and human health externalities. A final major adjustment is ensuring that CBAs can accommodate existing environmental policy targets as feasible model solutions. The main and important methodological recommendation is that the fundament of CBA methodology should be left as it is, although policy proposal impact assessments should be expanded with analyses made with other methodologies. Such methodologies may adopt other ethical perspectives, based on, for example, egalitarian and hierarchical rationales, when analysing or proposing the ambition levels of air pollution policies.
Economists, psychologists, and sociologists have all contributed to the understanding of voluntary labor turnover. We argue for an integrated explanatory model which incorporates variables from each perspective. Such a model is presented and then estimated. Data from a cohort of 135 recently hired registered nurses employed by a university hospital are analyzed to assess the effects of the various explanatory variables on turnover during one year of employment. Turnover is measured by organization records for 12 months following the administration of the questionnaire designed to measure the independent variables. The integrated model portrays the work conditions, environmental conditions, and employee characteristics as primarily affecting turnover by impacting on the intervening variables of job satisfaction, organizational commitment and intent to stay. Ordinary least square (OLS) regression and logistic regression are used in the analysis. The data indicate support for sociological, economic, and psychological determinants of voluntary turnover. These findings are discussed from the perspective of Etzioni's claims about the importance of the moral dimension for explaining economic behavior such as turnover.
Kahneman and Tversky's well-known prospect theory predicts that decision-makers will predominantly take the sure thing when choosing between a sure gain and a risky gain of equal or better expected value. We find that, when a price cut decision is presented in a form similar to the prospect theory gamble problems, the majority of respondents (both students and retailers) choose the risky price cut choice, even when the risky choice has a lower expected value. The explanation that perceived short term gains in volume (i.e., the customer base) dominated the price cut decision is examined in detail.
Tax morale has been a focus of academics and policy makers for some time. The measurement of individuals' tax morale is subjective, and various proxies have been employed in qualitative and quantitative research. The framing of these measures has been considered in some research with respect to equivalency or goal framing, but the underlying implication of emphasis framing in commonly used proxies has yet to be considered. Further, although fairness and financial literacy have been considered determinants of tax morale, no one has yet considered whether financial and tax literacy (FTL) has a moderating effect on fairness and tax morale.This research addresses these gaps in the literature. The findings suggest that questions and scenarios posed by academics and policy makers should consider positive, negative, and emphasis framing, as well as the moderating effect of the respondents' FTL to measure individuals' tax morale effectively. The findings also suggest that raising levels of FTL could have a double dividend: not only will improved FTL have a positive impact on tax morale, but it might be magnified through the impact of fairness. These findings hold only when morale is determined by negatively framed scenarios. In particular, the perceived fairness of the tax system enhances tax morale when FTL is high, whereas the perception of fairness has no effect on tax morale for respondents with lower levels of FTL.
This paper reports on a pilot experimental investigation into the behavior of the dynamic perfectly competitive firm under spot price uncertainty. However, in a sense that will become clearer as the paper unfolds, the firm is not the focus of interest, but rather the dynamic behavior of individuals in an uncertain world. The firm is the vehicle for my analysis. This analysis follows from an investigation similarly designed to discover how individuals take dynamic decisions under uncertainty, but using the household’s consumption/savings decision as the vehicle. This analysis(*) resulted in a number of important findings. The most significant of these were: first, that actual behavior differed significantly from the optimal behavior prescribed by the relevant economic theory; second, and perhaps in contrast, that the comparative static implications of actual behavior agreed with the comparative static properties of the optimal strategy. In other words, the individuals in our experiments behaved in a manner that was absolutely wrong but comparatively correct. Reactions to these findings have been varied. The most common re-
This article forms the second part of a continuing study on the role of business ethics in America. In the first part we explored the views of business executives; the second part analyzes the beliefs and values of business educators; and the third part will compare and contrast the responses from academic and business leaders.
Energy consumption constitutes one of the important sources of carbon dioxide emission which cause global warming. This paper analyses greenhouse gas (GHG) emissions due to energy consumption in the domestic sector considering household activities and socioeconomic parameters. A stratified random survey of 1967 households in Bangalore pertaining to the energy consumption reveals that annual per capita electricity consumption ranges from 9.64 to 2337 kW h/year with an average of 336±267 kW h/year. Emission from most of the wards (66 wards) is about 10–15 Gg/year, while wards in peri-urban areas emit less than 10 Gg/year. Extrapolation of these, show that total carbon dioxide from all wards of Greater Bangalore accounts to 3350 Gg/Year. The energy consumption analyses reveal a proportional increase in the per capita energy consumption with the family income suggesting that economic levels in respective wards is an important parameter in the domestic energy consumption and also GHG emissions. Suggested interventions through large scale penetration of renewable sources of energy and energy conservation would help in reducing greenhouse gases and consequent warming of the Earth.
A new method for estimating the demand curve for publicly supplied goods when quantities are restricted to a few discrete levels is introduced. The method involves fitting a conditional logit model to choices from a set of survey options in which price and quantity are both varied and consumer attitudes are explicitly controlled. The estimated parameters of the valuation function serve to trace the marginal value of the good at each level of hypothetical consumption in survey data. We apply the method to the valuation of salmon on Alaska's Kenai River. We find that there is a distinct kink in the marginal valuation function and that sport fishermen may place a negative marginal value on fish permits exceeding their desired catch levels.
“Entrepreneurs” in economic theory are like supermen. Organizers of real world organizations are far less dramatic, playing roles that defy simple unimotivational characterizations. Likewise, “firms” in economic theory are simple black boxes from which come profit maximization assumptions. Real world organizations are much more complex in type, function, and structure. The usual economic distinctions between for-profit businesses, not-for-profit corporations, and government bureaus are often quite inaccurate or misleading. Even the distinction between organizations and markets developed by Ronald Coase ignores an important intermediate category of networks. This paper offers a complete reconceptualization of the role of organizers, organizations, networks, and markets. It is a fundamental challenge to the traditional paradigm of neoclassical economics. The alternative presented here incorporates the basic public choice perspective of Buchanan and Tullock, the new institutionalism of Williamson, and the informational concepts of Hayek. It also introduces the very important notion of correct agency identification for social analysis and what is called “social human capital” within the framework of organizational teams. Organizers, at the most fundamental level, organize new organizations when an organizer or group of organizers perceive a way to pursue their goals and objectives more effectively through the creation of new organizations than through the next best way of pursuing those goals and objectives. It is as simple and complicated as that.
Prospect theory suggests that describing the objective risk inherent in a situation in terms of how much can be “gained” will lead to risk avoidance, whereas describing the same exact situation in terms of the potential “losses” to be suffered leads to risk-seeking behavior. This effect has been called “framing.” The present study investigated whether this bias occured among a professional group that deals with financial risk as part of their work. The results show that financial planners are not immune to the framing bias.
Discusses how the prevailing approach to `social' and `institutional' influences on labor markets become an obstacle to broader cross-disciplinary research at theoretical and empirical levels. Attempts by labor economists to deal with institutional and social influences on labor markets; Institutional nature of occupational labor markets; Implications.
During the last ten or fifteen years the old separation between economics and other social sciences has increasingly been challenged by economists applying the neoclassical paradigm to problems that traditionally concern the other social sciences. The main thesis of this paper is that this so-called “economic imperialism” threatens to unleash a new paradigmatic struggle in the social sciences, which is likely to be just as destructive as the old Methodenstreit. It is in this situation that socioeconomics emerges as a viable alternative since it emphasizes the need for a systhesis of the findings of several social sciences when an economic problem is analyzed. The article stresses the original battle of the methods at the turn of the century that gave birth to a set of ideas, analogous to those of Etzioni on socioeconomics, namely what Max Weber called Sozialökonomik. The emergence of “economic imperialism” is described, and the essay ends with a plea for a socioeconomics in the sense of a broad, overarching approach to economic analysis. Economic imperialism, it is concluded, threatens to close the door to new developments in economics; socioeconomics, on the other hand, tries to keep it open.
Many resources available to aid financial services professionals emphasize investment products rather than client characteristics. Financial advisors can use various resources to review quantitative details about investment products, for example, investor-clients’ previous investments, past performance of particular investment products, ratings of investment products presently available in the market place, and so on, but have little more than intuitive, subjective judgments as a basis for understanding clients’ investment needs and aspirations relevant to their investment decisions. In Etzioni’s terms, financial services professionals have a wide array of resources concerning “Logical/Empirical” (L/E) factors but comparatively few systematic techniques or guidelines for accurate assessment of clients’ “Normative/Affective” (N/A) attributes.(5*6’ The authors address these practical matters in the context of (a) Heider’s contention that scientific psychology can benefit from analysis of commonsense psychology beliefs, (b) person perception theory, and (c) problem solving
During the past several decades, women have increased their labor-force participation while remaining primarily responsible for the care of children. Men have not correspondingly increased their home activity, and women's earnings have not reached parity with men's. A primary reason that women have failed to gain equality in the labor market may be the remaining inequalities in provision of child rearing. We consider the constraints on child rearing faced by men and review literature on animal behavior to elucidate the conditions that facilitate parental investment by males. Some factors appear to have congruent effects, in general, on paternal behavior in many species: the benefit to young of male help, the male capacity for providing help, and paternity certainty. We discuss the role of these factors in slowing the achievement of gender equality and the potential efficacy of social policy in changing existing behavior patterns.
An economist and a social psychologist/sociologist discuss ethical investing (i.e., investing in socially desirable/attractive goods/services). An economic psychology model is outlined that allows for concerned investing. Four processes are identified: on the supply-side is the notion of innovative (value shift) marketing strategies; on the demand-side are consumer altruism, the influence of liberal elites, and the changing characteristics of consumers/investors (vintage preferences). This economic psychology model attaches weight to economic processes, not just consequences; to causal explanations beyond economic determinism; and to an interest in individual cognition (thinking, choices, attitudes, and preferences). (PsycINFO Database Record (c) 2007 APA, all rights reserved).
This study aimed to verify how consumers’ intention to visit restaurants during the pandemic is affected by consumers’ risk perception and different types of trust. The sample was composed of 546 consumers from 89 different cities in Brazil. An adapted 43 items questionnaire with 5-point scales was administered, and analyzed using structural equation modeling. The results indicate that consumers' trust in a restaurant and brand, fair price, solidarity with the restaurant sector, disease denial, and health surveillance trust predict intention to visit a restaurant during the COVID-19 pandemic. Age has significant moderated effects, reducing disease denial effects. The trust in restaurants and brands was the factor with the largest effect size. In a multigroup analysis, it was found that solidarity with the sector does not affect the intention to visit restaurants for consumers without formal work. It is discussed the implications of an increased consumers' risk perception, directly affecting their intentions. Special attention to consumers’ trust and fair price perception is fundamental, given consumers’ solidary inclination toward helping the restaurant sector. These aspects must be recognized by restaurant owners and managers to be improved and be used to attract consumers.
The purpose of this paper is to offer a new theoretical rationale for satisficing behavior. The theory developed here is, in principle, applicable to all forms of economic behavior, although attention in this paper is restricted to satisficing on the part of business firms. The basic approach is to incorporate a needs-based theory of motivation into the managerial objective function. The model that is developed shows that a firm will seek to maximize profit until sufficient profit is earned to satisfy the survival needs of the management of the firm, but beyond this point profit is sacrificed for the attainment of other higher order needs. The attractive features of this approach are that it generates satisficing behavior within a traditional utility maximizing framework, leads to testable hypotheses concerning under what conditions satisficing will occur, and provides a rationale for satisficing that blunts much of the previous criticism of the concept. The model is also explicitly “behavioral” in that it integrates psychological concepts and processes into economic theory.
