Controlling urban air pollution caused by households: uncertainty, prices, and income.

We examine the control of air pollution caused by households burning wood for heating and cooking in the developing world. Since the problem is one of controlling emissions from nonpoint sources, regulations are likely to be directed at household choices of wood consumption and combustion technologies. Moreover, these choices are subtractions from, or contributions to, the pure public good of air quality.

Robust detection protocols for uncertain introductions of invasive species.

Two important features of real-world port inspections of shipping containers for invasive species are the general absence of underlying economic considerations and the climate of severe uncertainty that surrounds the likelihood of invasive species introductions. In this article we propose and illustrate a method for determining inspection protocols that address both of these issues. We seek inspection protocols that are robust in the sense that they maximize the range of uncertainty over which the expected loss from the introduction of an invasive species plus the costs of inspections do not exceed some critical value.

Risk aversion and compliance in markets for pollution control.

This paper examines the effects of risk aversion on compliance choices in markets for pollution control. A firm's decision to be compliant or not is independent of its manager's risk preference. However, non-compliant firms with risk-averse managers will have lower violations than otherwise identical firms with risk-neutral managers.

Price-based vs. quantity-based environmental regulation under Knightian uncertainty: an info-gap robust satisficing perspective.

Conventional wisdom among environmental economists is that the relative slopes of the marginal social benefit and marginal social cost functions determine whether a price-based or quantity-based environmental regulation leads to higher expected social welfare. We revisit the choice between price-based vs. quantity-based environmental regulation under Knightian uncertainty; that is, when uncertainty cannot be modeled with known moments of probability distributions.