Narrow Results

We consider a model of socially interacting individuals that make a binary choice in a context of positive additive endogenous externalities. It encompasses as particular cases several models from the sociology and economics literature. We extend previous results to the case of a general distribution of idiosyncratic preferences, called here Idiosyncratic Willingnesses to Pay (IWP). When j, the ratio of the social influence strength to the standard deviation of the IWP distribution, is small enough, the inverse demand is a classical monotonic (decreasing) function of the adoption rate. However, even if the IWP distribution is mono-modal, there is a critical value of j above which the inverse demand is non-monotonic. Thus, depending on the price, there are either one or several equilibria.

Beyond this first result, we exhibit the generic properties of the boundaries limiting the regions where the system presents different types of equilibria (unique or multiple). These properties are shown to depend only on qualitative features of the IWP distribution: modality (number of maxima), smoothness and type of support (compact or infinite). The main results are summarized as phase diagrams in the space of the model parameters, on which the regions of multiple equilibria are precisely delimited. We also discuss the links between the model and the random field Ising model studied in the physics literature.

Natural ecosystems, including forest ecosystems, continue to be degraded or converted at an alarming rate. To complement or substitute regulatory approaches to ecosystem management, market-based instruments such as "payments for ecosystem services" (PES) have been introduced and are gaining popularity. One of the prominent PES schemes in the world is the Bolsa Floresta Program (BFP) in the State of Amazonas, Brazil. The BFP was established by the Government of the State of Amazonas through its Secretariat for Environment and Sustainable Development in 2006 and is implemented by the Amazonas Sustainable Foundation. The BFP, which is a voluntary program to reduce deforestation and promote sustainable development by rewarding the communities for changing their land use practices, has four main components: the Bolsa Floresta Income; Bolsa Floresta Social; Bolsa Floresta Family; and Bolsa Floresta Association. A study was conducted to assess the preferences of the participating households in three reserves, namely: Rio Negro, Juma, and Uatumã, for different payment packages with varying combinations of the bolsas relative to the status quo option. The discrete choice method and an open ended question format were used to elicit the preferences of the participant households. The discrete choice model results showed that the majority of the respondents (about 80 per cent) in the three reserves chose an alternative which offered a 20 per cent increase in direct cash payments to households as their most preferred alternative. On the other hand, the majority of respondents who were subjected to open question stated that they would like to see an increase in benefits that fall under the Bolsa Floresta Social category.

We estimate how climate amenities influence where households decide to reside in the United States with two main objectives in mind: (i) to produce estimates with sufficient demographic detail to inform demographic population projections for use in climate impact analysis; (ii) to study the robustness of estimates from the existing literature. With respect to the former goal, we find important differences in job-related migration motives by age group and in the overall propensity to migrate among households with children. With respect to the latter aim, our framework shares a common methodological approach with other, recent attempts to recover climate preferences, allowing us to explore the consequences of a number of key assumptions in a systematic manner. Consistent with the existing literature, we find relatively robust estimates of the impact of the frequency of extreme heat days on household location decisions. The impacts of other common measures of climate, including the frequency of extreme cold days, average summer and winter temperatures, annual precipitation, humidity and frequency of sunshine, do not show a strong enough signal in the data to be estimated with precision.