A. K. Enamul Haque

Economic valuation of flood risk exposure and reduction in a severely flood prone developing country

This paper presents the results of a dichotomous choice contingent valuation (CV) study of reduced flood risks in Bangladesh. Sensitivity of willingness to pay (WTP) to varying risk exposure levels is tested in a ‘natural experiment’, targeting floodplain residents facing regular annual flooding and a disaster flood once every five to ten years. Accounting for price, income and education levels, both subjective risk aversion and objective baseline risk exposure affect stated WTP for a common level of flood protection. We find a number of problems with the CV application in this specific developing country context. Half of the respondents are unable to pay in financial terms, but are willing to contribute in kind. The combined use of a monetary and non-monetary measure of WTP would have lowered the number of zero bids considerably. A test-retest carried out six months after the original survey shows that the stated WTP values are reliable.

Environmental valuation in South Asia

This book is about understanding the value of environmental services in South Asia. It provides an overview of different environmental problems in South Asia and examines how economic valuation techniques can be used to assess these problems. It brings together multiple case studies on valuation undertaken by economists and environmental scientists from Bangladesh, India, Pakistan, Nepal and Sri Lanka under the aegis of the South Asian Network for Development and Environmental Economics (SANDEE). The book addresses the challenges of valuing environmental changes that are unique to developing countries. Each chapter starts with a description of an environmental problem and the valuation strategy used, followed by a discussion of estimation methods and results. It is designed to serve as a reference book for students, teachers, researchers, non-government organizations and practitioners of environmental valuation. Those interested in development and environmental economics, and natural resource management policies, will also find it useful.

The Bangladesh Open University: Mission and Promise.

In this article, the authors describe the establishment of Bangladesh Open University (BOU) which was set up to offer both tertiary and secondary school equivalency programmes. They explain how the university was set up to serve those who were excluded from the traditional education system and those who had dropped out. They outline how the plans changed during the course of development and why. The authors conclude that the experience of BOU in meeting a wide range of formal and non-formal, academic and vocational education for large numbers of students could serve as a model for the development of distance education in other Third World settings.

Dependence between stock market and foreign exchange market in South Asia: A Copula-Garch approach

The paper studies the dependence pattern between stock market and foreign exchange market of three South Asian countries; namely Bangladesh, India and Sri Lanka by using five copula functions, to reveal asymmetric dependence structure. This paper focuses South Asia because of its promise as portfolio investment destination. The dependence structure between stock market and foreign exchange market assists MNCs, private equity firms, international portfolio managers and policy makers in international investment decision making. The paper also studies tail dependence (upper and lower). Markets crash together rather boom together, which can be traced by tail dependence parameter. Correlation, Kendall’s tau and Spearman’s rho reveal linear dependence. However, Copulas reveal non-linear dependence between non-normal distributions. In this paper, Copula functions are applied between marginal distributions of stationary uni-variate return series. Using daily return series for the period of July 31, 2009 to July 31, 2013, ARMA-GARCH type model are applied to obtain marginal distributions of return series. The results from marginal models indicate that volatility dies immediately after a crisis; meanwhile positive news creates more volatility than negatives. The results from copula models indicate existence of asymmetric dependence, with upper tail dependence for all pairs, implying dependence increases in bull market situation (price increase in financial instruments). Both Bangladeshi and Indian pairs provide some diversification possibility, against no diversification for investing in Sri Lankan market. Moreover, Bangladesh and India demonstrated as promising investment destination in terms of risk–return criteria. Foreign investors are recommended to employ proper risk and investment management strategy in order to earn capital gain, by following diversification strategy. Conversely, investment recipient countries are recommended to establish a stable, well regulated stock market, with high stock market capitalization to GDP. Besides, monetary policy should stabilize the exchange rate of currency to attract foreign investors. Copula based dependence measures assist foreign investors and investment recipient countries to change their related strategies and policies; subsequently they will be able to maximize their utility functions.

Quantifying the impact of Ramadan on global raw sugar prices

Each year during the month of Ramadan (Muslim fasting month) consumption of sugar increased dramatically across the globe as Muslims traditionally break their fast with some sweet drinks or products. Since Muslims use lunar calendar, the months are not fully aligned with the Gregorian calendar or with the seasonal calendar for agricultural crops. In this paper, we quantify the impact of Ramadan on both the price and its growth of global raw sugar price. To set the stage for the empirical work that follows, we employ a dummy and a fractional variable to capture Ramadan in order to overcome the asynchronicity of time between Ramadan fasting (which is based on Islamic lunar calendar) and movement in prices (which follows the Gregorian solar calendar). In order to capture seasonality of production in sugar production, data on sugar price spans over thirty-four years so that the Islamic calendar makes a complete cycle of the Gregorian calendar. Using ARIMA and UCM models, we find strong evidence that monthly raw sugar prices in the global market increases by roughly 6.06% (or

An Analysis of the Determinants of Wage and Salary Differentials in Bangladesh

17.78 per metric ton) every year ahead of Ramadan.

Economic Impact of Climate Change on Wheat Productivity in Bangladesh: A Ricardian Approach

The Gini Index suggests that income inequality is a highly prevalent phenomenon in Southeast Asia (The World Bank, 2012a). As Zaman and Akita (2012) points out, differentials in income is especially prominent in Bangladesh. Our article investigates which factors create differentials in income in Bangladesh. Using data from the Household Income Expenditure Survey published by the Bangladesh Bureau of Statistics, we estimated two separate models—one for daily wage and one for annual salary. We found that education, age (which was used as a proxy for labour market experience), gender and place of work significantly brought about differentials in daily wage rates. We also observed that all four of the above variables, along with different types of occupations, caused differentials in annual salary. We conclude by making several policy recommendations to address these findings.

The environmental and social impacts of flood defences in rural Bangladesh

The study measured the economic impacts of climate change on wheat production in Bangladesh using Ricardian approach. Panel data on wheat yield and climate variables were used to estimate the model. Results indicated that most climate variables had a significant impact on the income of wheat production. The marginal increase of temperature during January and February reduced the net revenue by Bangladeshi Taka (BTk) 18,885 ha−1 (USD 239.05) and BTk 9,603 ha−1 (USD 121.56) respectively, whereas, marginal increase of temperature during December increased it by BTk 7,045 ha−1 (USD 89.18). Increasing rainfall during December and January increases the net return by BTk 128 ha−1 (USD 1.62) and BTk 543 ha−1 (USD 6.87) respectively. The study used predictions from five different Global Circulation Models (GCM) for two IPCC emission scenarios and found that impacts on net revenues for these two scenarios are mixed depending on model predictions. Net revenue will decrease for both A2 and B2 emission scenarios using precipitation and temperature predictions for 2030 for three of the models, while it will increase for two models. At the same time, for 2050, net revenue will fall when temperature and precipitation of one of the models are used for the rest net revenue will rise. This means that while our study provided marginal effects for temperature and precipitation changes on farm’s net revenue, understanding about the climate change impact requires better climate modeling for the local situation. This is important to accurately predict the impact of climate change for future years.

Environmental Valuation in South Asia: Contents

Flood mitigation is clearly a very important issue for Bangladesh. It is highly related to other high priority policy goals such as food security. As a result, protection against flooding has often been combined with efforts to intensify agricultural production. Most of the flood control projects in Bangladesh are so-called ‘flood control, drainage, and irrigation’ projects. These projects have recovered thousands of hectares of land from the floodplain through the construction of dykes or embankments. However, this measure has come under criticism because: (1) it provides benefits in terms of increased agricultural productivity and is therefore biased towards landowners; (2) it has resulted in a long run decline in soil fertility due to the cessation of sediment deposition on land during flood; (3) it prohibits the migration and spawning of fish, and thereby reduces overall fish stocks and the livelihood of fishers; (4) flood control embankments also hinder water transportation because they prevent free water flows between rivers within and outside embankments. Consequently, flood control projects often reduce the incomes of water transportation workers and force some to leave this sector. Thus the construction of flood protection embankments has a complex pattern of positive and negative impacts for different sections and occupational groups within the affected population. Some of these impacts are through environmental channels. As mentioned above, fish stocks are negatively affected by the presence of embankments, which affects the livelihoods of those engaged in capture fisheries. This is a big problem because fisher communities in Bangladesh are generally one of the poorest occupation groups. Similarly, negatively affected people engaged in water transportation also tend to be from the poorest strata in the community.

Environmental Valuation in South Asia: List of Contributors

This book is about understanding the value of environmental services in South Asia. It provides an overview of different environmental problems in South Asia and examines how economic valuation techniques can be used to assess these problems. It brings together multiple case studies on valuation undertaken by economists and environmental scientists from Bangladesh, India, Pakistan, Nepal and Sri Lanka under the aegis of the South Asian Network for Development and Environmental Economics (SANDEE). The book addresses the challenges of valuing environmental changes that are unique to developing countries. Each chapter starts with a description of an environmental problem and the valuation strategy used, followed by a discussion of estimation methods and results. It is designed to serve as a reference book for students, teachers, researchers, non-government organizations and practitioners of environmental valuation. Those interested in development and environmental economics, and natural resource management policies, will also find it useful.