Economy-Wide Modeling, Environmental Macroeconomics, and Benefit-Cost Analysis

V. Smith and Min Qiang (Kent) Zhao

Land Economics, 2020, vol. 96, issue 3

Abstract: This paper develops a new method for evaluating benefit estimates prepared for major environmental rules and addresses three criticisms of existing practices: (1) using benefit estimates from the literature without adjusting for the conceptual differences underlying their meaning, (2) ignoring feedback effects of policy, and (3) failing to recognize the potential for economy-wide effects of large policies. Our approach adapts a general equilibrium framework characteristic of macroeconomic models and focuses on the effects of introducing nonmarket environmental services into the aggregate or “stand-in” preference function. Two recent policies illustrate how it can be used to assess economy-wide effects.

JEL-codes: D61 H41 (search for similar items in EconPapers)
Date: 2020
Note: DOI: 10.3368/le.96.3.305
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:96:y:2020:1:3:p:305-332

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