Glenn Sheriff

Comparing Distributions of Environmental Outcomes for Regulatory Environmental Justice Analysis

Economists have long been interested in measuring distributional impacts of policy interventions. As environmental justice (EJ) emerged as an ethical issue in the 1970s, the academic literature has provided statistical analyses of the incidence and causes of various environmental outcomes as they relate to race, income, and other demographic variables. In the context of regulatory impacts, however, there is a lack of consensus regarding what information is relevant for EJ analysis, and how best to present it. This paper helps frame the discussion by suggesting a set of questions fundamental to regulatory EJ analysis, reviewing past approaches to quantifying distributional equity, and discussing the potential for adapting existing tools to the regulatory context.

Disease Forecasts and Livestock Health Disclosure: A Shepherd’s Dilemma

We analyze how to induce sellers to disclose food safety. With repeated interactions and safety correlated over time, cash transfers alone do not ensure disclosure. Perfect, but costly, testing ensures disclosure with a complex lottery that may be difficult to implement in practice. In contrast, even a noisy quality forecast allows the buyer to induce perfect disclosure with a simple pricing scheme. Forecast introduction may benefit or harm sellers. After introduction, sellers may suffer from increases in forecast precision. As an illustration, we cast our model in the context of Rift Valley fever in an East African livestock market. Copyright 2010, Oxford University Press.

On Hedonic Valuation of Urban Amenities Using Unbalanced Data

Hedonic valuation of urban amenities often requires estimating housing and labor market regressions. It is difficult to get both types of data for all survey respondents. We show that the common practice of conducting two separate regressions with unbalanced data causes inconsistent covariance matrix estimation and improper inference regarding amenity values. We demonstrate how two easily implementable yet consistent techniques can be used for hedonic valuation with an application in valuing temperature increases in urban Brazil. (JEL C31, Q51)

Imperfect Signals and Product Safety Disclosure: A Shepherd's Dilemma

We study dynamic markets where product safety is unobserved by consumers. Perfect, but costly, audits and an exogenous noisy signal can provide information regarding seller type. Without the noisy signal, sellers do not disclose product safety without auditing. If audits are too expensive, a pooling equilibrium can result in consumption of unsafe goods. Even a noisy quality signal perfectly identifies unsafe goods by giving sellers incentives to disclose type without audits. Introducing a signal helps buyers, but its effect on sellers is ambiguous. Even if sellers benefit, they always suffer from increases in precision.

A Note on Hedonic Valuation of Urban Amenities Using Unbalanced Data

Hedonic valuation of urban amenities often requires estimating housing and labor market regressions. It is difficult to get both types of data for all survey respondents. We show that common practice of handling the unbalanced data by conducting two separate regressions can lead to inconsistent covariance matrix estimation and improper inference regarding confidence intervals for amenity values. We then demonstrate how two easily-implementable yet consistent techniques can be used for hedonic valuation with an application in valuing temperature increases in urban Brazil. All techniques estimate a net positive marginal value of a temperature increase. Unlike the separate equation estimation, however, techniques using a consistent covariance estimator are unable to reject at the 5 percent level the null hypothesis of a zero welfare effect.

Politics, Public Bads, and Private Information

Preferential treatment for politically influential sectors often has undesirable consequences such as increasing pollution or ecosystem degradation. Private information on firm productivity constrains the government’s ability both to redistribute income and regulate public bad production. Given political economy and information constraints, this article characterizes a social-welfare maximizing policy. The optimal policy uses a single instrument to achieve both goals, making income-support subsidies contingent upon reduction of bad outputs. Output price uncertainty works to the advantage of the government, potentially eliminating some firms’ information advantage. JEL Classification: D82, H23, Q52