In this paper we consider the option value of the environment employing a general equilibrium growth model with a stochastic technology. In our model, as in existing studies, because of irreversibility, the environment has significant real option value. However, unlike the existing literature in...

In export operation forecasting exercises the effect of stochastic inputvariables such as exchange rates and commodity prices are often ignoredwith the convention being to account for their uncertainty in discount rates. Inthe case where exchange rates are highly volatile, such as in the...

Endogeneity bias arises in contingent valuation studies when the error term in the willingness to pay (WTP) equation is correlated with explanatory variables because observable and unobservable characteristics of the respondents affect both their WTP and the value of those variables. We correct...

We provide counterexamples to the idea that mitigation of greenhouse gas emissions, and adaptation to climate change, are always substitutes. We consider optimal mitigation policy when climate damages follow a geometric Brownian motion process with positive drift and mitigation is lumpy. Climate...