Working Papers

AbstractThe transmission of wildlife diseases poses a substantial threat to human health and the services provided to humans by local ecosystems. Such risks often involve spatial human-wildlife interactions that are not explicitly included in economic models of wildlife management. A novel modeling approach is used to study the imminent introduction of chronic wasting disease (CWD) to elk populations in the Greater Yellowstone Ecosystem (GYE). A specific concern is that concentrating elk at feedgrounds may exacerbate the spread of CWD, while eliminating feedgrounds may increase the number of elk on private ranchlands and the transmission of a second disease, brucellosis, from elk to cattle. A spatio-temporal bioeconomic model is used to determine optimal management policies given the dual threat of wildlife diseases. Elk telemetry and landscape data are used to predict migratory behavior and population densities with and without supplementary feeding, eliminating the need to make assumptions about how feeding increases elk population densities and influences elk-cattle interactions, as has been necessary in aspatial models. We use a 4,800 km2 area around Pinedale, WY containing four existing feedgrounds as a case study, and use simulations to generate welfare estimates under a variety of management strategies. Results suggest that wildlife managers should discontinue feeding upon the introduction of CWD to maximize the present value of economic net benefits generated by the local elk population. Continuing feeding could result in present-value welfare losses of over $30 million for the case study region. [Supplementary Information]

AbstractUsing a general equilibrium ecosystem model, we estimate the ecological impacts of the Atlantic Rim Natural Gas project in south-central Wyoming, USA. The impacts are measured in terms of species’ populations and value of ecosystem services such as species’ existence value, hunting net benefits, and cattle-grazing profits. The simulation tracks the biomass consumption patterns and population changes of 13 species in the sagebrush ecosystem. The results are driven by losses of habitat for species, as well as changes in the relative scarcity of prey and forage when species avoid the areas disturbed by energy development (ED). For the study area, the total present-value loss in ecosystem services from ED after coordination among government agencies, and under two different species’ population constraints, is between $60 and $90 million. [Supplementary Material]

AbstractThis paper examines optimal wildlife management in a spatial predator-prey model.  The model is motivated by the spatiotemporal dynamics between elk, wolves, hunters and cattle ranchers in the Greater Yellowstone Ecosystem (GYE).  Wildlife managers set hunting rates for elk and wolves to maximize the stream of ecosystem services derived from the GYE over time.  The management component of the model considers tradeoffs between tourism, hunting, and cattle grazing currently facing wildlife managers.  The predator-prey component of the model incorporates intraspecific competition and spatially explicit predation risk calibrated to the GYE.  Contrary to a recent judicial ruling that has placed a moratorium on hunting wolves in Wyoming, optimal management within our model calls for more aggressive wolf hunting outside of Yellowstone National Park (YNP). We also find that a more equitable distribution of ecosystem service provisioning across the U.S. states surrounding YNP can be achieved with only modest losses in welfare.

AbstractWe study the health effects of pollution on the accumulation of physical and human capital in an overlapping generations (OLG) model. Pollution negatively affects the accumulation of physical and human capital because pollution reduces longevity and the effectiveness of education expenditures. The model can generate rich dynamics that can reconcile with negative relationship between pollution and economic growth in cross-sectional data and cycles in time-series data. One interesting case is that two stable Balanced Growth Paths (BGPs) emerge with a boundary demarcating the two. One BGP is desirable featuring high economic growth and low pollution, whereas the other should be avoided because it is associated with low economic growth and high pollution. Government policy can steer the economy towards the desirable BGP. Another interesting case is that cycles may emerge causing increased economic and environmental volatility. Government policy such as changing the tax rate can eliminate the cycles. [Supplementary Material]

AbstractWe compare pollution permits and green taxes in a unified overlapping generations model with endogenous longevity. The model identifies pollution permits as a potential source of multiple equilibria. One nontrivial equilibrium is an environmental poverty trap (EPT) with low capital and a high stock of pollution. An economy operating around the equilibrium will gravitate toward this equilibrium in the long run. The other nontrivial equilibrium is a desirable one with high capital and a low stock of pollution. A saddle path leads to this desirable equilibrium. Alternatively, green taxes produce a unique stable equilibrium that avoids the EPT. Our conclusion is that developing countries can continue to consider pollution permits as an efficient mechanism to improve environmental conditions but proceed with caution given the possibility of being drawn into an EPT. [Supplementary Material]

Abstract.  In this paper, we investigate the nature of rational expectations equilibria for economic epidemiological models, with a particular focus on the behavioral origins and dynamics of epidemiological bifurcations.  Unlike mathematical epidemiological models, economic epidemiological models can produce regions of indeterminacy or instability around the endemic steady states due to endogenous human responses to epidemiological circumstance variation, medical technology change, or health policy reform.  We consider SI, SIS, SIR and SIRS versions of economic compartmental models and show how well-intentioned public policy may contribute to disease instability, uncertainty, and welfare losses.

Abstract.  Will a major shock awaken US citizens to the threat of catastrophic pandemic risk? We present evidence that suggests the answer might be “no”.  Using a natural experiment, we surveyed US citizens about their risk-risk tradeoffs before and immediately after the highly visible 2014 Ebola scare. Using a unique survey administered both before and after the 2014 West African Ebola Outbreak, we ask US citizens to value fatalities from pandemic risks compared to deaths from environmental disaster risks (e.g., Bhopal, Exxon, Deepwater, Fukushima) and or a terrorist attack (e.g., 9/11) (1). Our results show that prior to the Ebola scare, people were relatively complacent and placed a low relative priority on public spending to prepare for a pandemic disease outbreak. After the Ebola scare, US citizens did not over-react to the risk. [Supplementary Materials].