This paper examines whether the marginal price of risk reduction varies by the demographic characteristics of neighborhoods. Using an instrumental-variables approach to control for the two-way relationship between housing prices and environmental risk, the paper finds that the marginal valuation...

The recent wave of enacted and proposed U.S. energy regulations imposes energy efficiency standards on light bulbs, appliances, and motor vehicles based on the unsupported assumption that consumers and firms are irrational and that energy efficiency should be the paramount concern. The...

In the real world, taxes and cap-and-trade systems are rarely implemented in their pure form. In this paper, we examine a related approach that has been used widely in practice—which we refer to as an “offset.” The idea behind offsets is to encourage firms or entities that may not be a...

Information markets are markets for contracts that yield payments based on the outcome of an uncertain future event, such as a presidential election. They have the potential to improve decision making and policies throughout the economy. At the same time, there are regulatory hurdles to...