Corbett A. Grainger

Distributional Effects of the Transition to Property Rights for a Common-Pool Resource

ABSTRACT The introduction of property rights to manage common-pool resources is often met with opposition from some incumbent users, despite evidence of large aggregate increases in resource rent. We introduce an analytical model with firm heterogeneity to distinguish between traditional resource rent, which accrues to all owners, and inframarginal rent, which accrues to those with high skill. We show that, in the presence of skill heterogeneity, some current users (namely those with the highest skill) may prefer common-pool management, despite large aggregate increases in rents due to rationalization. Whether the transition to property rights is Pareto improving hinges critically on the initial allocation of rights, because inframarginal rents may be lower under property rights than limited entry. In our application to an important US fishery, property rights generate a ten-fold increase in market capitalization and a doubling in the present value of the resource, but without substantial free grandfathering, the top harvesters would rationally oppose the transition to property rights. JEL Codes: H23, P48, Q22, Q52.

Redistricting and Polarization: Who Draws the Lines in California?

In the United States, the process of drawing election districts is left to individual states, and critics of legislative redistricting often argue for independent panels to take control of the process. A common claim is that legislative redistricting has been a major contributor to polarization in the American political system. Previous attempts to test for a relationship between redistricting and polarization have generally relied on cross-state comparisons of redistricting methods and examinations of behavior in the House of Representatives. In this paper, I exploit the alternation between legislatively drawn and panel-drawn districts in California since the mid-1960s. Using data at the state legislature level, I find evidence that legislatively drawn districts have been, on average, less competitive than panel-drawn districts. Moreover, as districts become “safer,” legislators tend to take more extreme voting positions. Finally, I find evidence that legislative redistricting (compared with panel-drawn redistricting) is associated with increased polarization.

Distribution and Climate Change Policies

Climate Change Policies sheds light on the foundations, design and effects of climate change policies. Written by leading international experts in the field, this book deals with the various economic effects from climate change policies introduced at national and international levels. It also expertly describes actual applications of climate change policies in the main emitting countries. This insightful study includes chapters on public policies and climate change impacts, adaptation, mitigation, effects on competitiveness, new technologies, distributional concerns, and the international dimension.

How should economists model climate? Tipping points and nonlinear dynamics of carbon dioxide concentrations

Economists modeling climate policy face an array of choices when modeling climate change, including the role of uncertainty/ambiguity, irreversibility, and tipping points. After filtering out estimated cycles due to orbital climate forcing, we use a threshold quantile autoregressive model to characterize anomalies in atmospheric CO2 concentrations. We then test for local instability and tipping points, and we characterize the stationary distribution of anomalies. We find evidence of nonlinear dynamics, tipping points and a non-normal stationary distribution.

Distributional Impacts of Energy Cross-Subsidization in Transition Economies: Evidence from Belarus

Subsidies and cross-subsidies in the energy sector are common throughout Eastern Europe and Central Asia. In Belarus, revenues from an industrial tariff on electricity are used to cross-subsidize heating for households. Input-output (IO) data and a household consumption survey are used to analyze the distributional impacts of this cross-subsidization. This paper illustrates cost shares and electricity-intensity of different sectors and consumption categories and uses the IO data to obtain first-order estimates of the distributional incidence of policy reform. The paper then analyzes distributional impacts of subsidy reform with a Computable General Equilibrium model. Although poorer households benefit from reduced heating costs, the increase in prices of other consumer goods due to higher electricity prices more than offsets the benefits they receive from the subsidies. The analysis finds that the current cross-subsidies are regressive, and policy reform would be highly progressive.

Fossil Fuel Subsidy Reform in the Developing World: Who Wins, Who Loses, and Why?

Fossil fuel subsidies are widespread in developing countries, where reform efforts are often derailed by disputes over the likely distribution of gains and losses. The impacts of subsidy reform are transmitted to households through changes in energy prices and prices of other goods and services, as well as through factor earnings. Most empirical studies focus on consumer expenditures alone, and computable general equilibrium analyses typically report only total effects without decomposing them by source. Meanwhile, analytical models neglect important open-economy characteristics relevant to developing countries. In this paper, we develop an analytical model of a small open economy with a preexisting fossil fuel subsidy and identify direct and indirect impacts of subsidy reform on real household incomes. Our results, illustrated with data from Viet Nam, highlight two important drivers of distributional change: (i) the mix of tradable and nontradable goods, reflecting the structure of a trade-dependent economy; and (ii) household heterogeneity in sources of factor income.