Volume 40, Issue 2, 2010
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I POLICY DEBATES AND CONTROVERSIES
II RECENT TRENDS IN ECONOMIC RESEARCH
- Editorial Note (Uwe Dulleck, Benno Torgler and Clevo Wilson)
- Comment: ‘Knock, Knock: Where is the Evidence for
Dangerous Human-Caused Global Warming?’
by Robert M. Carter (Robert E.T. Ward)
- Reply to the Comment of Robert E.T. Ward
by Robert M. Carter (Robert M. Carter)
III BOOK REVIEWS
- Informal Eldercare across Europe: Estimates from the European Community Household Panel (Tarja Viitanen)
- Public Pension Reform in Japan (Akira Okamoto)
- The Marginal Values of Lifesavers and Lifeguards to
Beach Users in Australia and the United States (Boyd D. Blackwell and Clement A. Tisdell)
- Perceptions of Fairness and Allocation Systems (David A. Savage and Benno Torgler)
- Labor Productivity Growth, Education,
Health and Technological Progress:
A Cross-Country Analysis (Supachet Chansarn)
- An Empirical Analysis of Real Activity and Stock
Returns in an Emerging Market (Mansor H. Ibrahim)
- Carbon sinks and climate change: forests in the fight against
global warming, C.A. Hunt, Edward Elgar, 2009, 236 pages, ISBN 978-1-84720-977-1
Uwe Dulleck, Benno Torgler and Clevo Wilson
Abstract: In relation to EA P’s (Vol 38, No 2) papers on Global Warming and Climate Change we have
received feedback from several readers on Carter’s (2008) contribution. As indicated in aims
and scope of the journal, our objective is to publish controversies on current topics that are
interesting to economists and a more general readership under Policy Debates and Controversies.
It is the intention to involve contributors from related disciplines and as such not all aspects of
contributions represent new or original research within the field of the contributor, but it may
help the core readership of this journal to obtain a broader appreciation of the topics discussed.
With reference to Carter’s (2008) contribution, this issue is publishing a reply from Bob
Ward from the Grantham Research Institute on Climate Change and the Environment, London
School of Economics and Political Science, UK. We also publish a brief reply from Bob Carter
to Ward’s paper.
The editors believe that not all arguments in the debate are new to the climate change
debate, but the discussion has prompted a discussion among economists, students and the
public. We would now like to close this controversy with this issue and thank all contributors
for their views for a highly interesting and useful debate.
Comment: ‘Knock, Knock: Where is the Evidence for Dangerous Human-Caused Global Warming?’ by Robert M. Carter
Robert E.T. Ward
Abstract: Carter (2008) notes that for climate change “sound science [sic] understanding is an essential prerequisite to any meaningful economic analysis”. Unfortunately his paper contains serious and systematic errors and misrepresentations about the causes and potential consequences of climate change, the overall effect of which is to convey an inaccurate and misleading impression of the scientific evidence. Indeed, the overall tone of Carter (2008) is one of a polemic rather than an objective analysis of the facts. An itemisation of all the inaccuracies in Carter (2008) would require a great deal of space, so this paper identifies and corrects some of the most important errors.
Reply to the Comment of Robert E.T. Ward by Robert M. Carter
Robert M. Carter
Abstract: I thank Robert Ward for writing to me on February 2nd this year to point out an error in my
2008 paper, and now for the further interest that he has shown in the substance of the paper
by providing a detailed critique. In response to his letter, and after taking the time to check
various details of the matter, on May 2nd I asked the editors of EA P journal to publish the
“ERRATUM. The paper by R.M. Carter, “Knock, knock: where is the evidence for dangerous human-caused global warming?”, was published in 2008 in volume 38 of this journal. The paper contained the following quotation regarding global warming: “unless we announce disasters, no one will listen”, which was attributed to Dr Houghton’s 1994 book “Global Warming: the Complete Briefing”.
No such quotation appears in Dr Houghton’s book, and I therefore withdraw the assertion that it does and apologize to Dr Houghton for my misunderstanding of the issue. The quotation that I had in mind to reflect Dr Houghton’s views, but failed to identify accurately, was published in the U.K. Sunday Telegraph on Sept. 10th, 1995 in an article entitled “Sir John Houghton: Me and My God”; it reads “If we want a good environmental policy in the future we’ll have to have a disaster”.
Informal and Formal Eldercare Across Europe
Abstract: This paper uses the European Community Household Panel to analyse the relationship between the dynamics of labour force participation and informal care to the elderly for a sample of 20-59 year old women across 13 European countries. The analysis has two focal points: the relative contributions of state dependence as well as observed and unobserved heterogeneity in explaining the dynamics in female labour force participation and the existence and consequences of non-random attrition from the panel.
The results indicate positive state dependence in labour force participation in all 13 EU countries used in the analysis. The share of unobserved heterogeneity accounts for between 45% and 86% of the total variation in labour force participation. Informal care-giving is found to have a significant, negative impact on the probability of employment only in Germany. However, analysis for different sub-groups indicates that the impact is largest for the middle age women and also for single women in several EU countries.
Pension Reform in Japan
Abstract: his paper aims to establish guidelines for public pension reform in Japan, using a numerical simulation approach. The paper introduces the example of a minimum guaranteed pension in the Swedish pension system and compares this with the basic pension in Japan’s public pension system, with regard to methods of income redistribution through a public pension scheme. Simulation results show that the switch from the basic pension to the guaranteed pension does not always generate favorable results. If we consider a public pension program with the same scale as the current Japanese program, the highest level of social welfare is attained when a public pension system consists of only a basic pension and is financed by a consumption tax.
The Marginal Values of Lifesavers and Lifeguards to Beach Users in Australia and the United States
Boyd D. Blackwell and Clement A. Tisdell
Abstract: We estimate the marginal benefits of increasing lifesavers and lifeguards for beach users in Australia and the United States. Visits, income, education, age, distance from a patrol, and willingness to swim on an unpatrolled beach explain willingness to pay but rivalry does not; snob and bandwagon effects prevail. By comparing benefits with costs, the levels of lifeguards and lifesavers in Australia were found to be underprovided, consistent with shared good theory. Increasing services provides greater net benefits to users but replacing volunteer lifesavers with paid lifeguards may not because volunteering brings broader social benefits.
Perceptions of Fairness and Allocation Systems
David A. Savage and Benno Torgler
Abstract: This paper explores the conditions of acceptability of differing allocation systems under scarcity and evaluates what makes a price system more or less fair. We find that fairness in an allocation arrangement depend on the institutional settings inherent in the situation, such as information, transparency and competition and the perceived institutional quality (e.g., fiscal exchange and institutional trust). Results also indicate that the solution “weak people first” is seen as the fairest approach to an excess demand situation, followed by “first come, first serve”, the price system and an auction system. On the other hand, a random procedure or an allocation through the government is not perceived to be fair. Moreover, economics students seemed to be less sceptical towards the price system than other subjects although we observe that female students are more sceptical than male students.
Labor Productivity Growth, Education, Health and Technological Progress: A Cross-Country Analysis
Abstract: This study aims to calculate the growth rates of labor productivity of 30 countries categorized into four groups, including G7 countries, western developed countries, eastern developed countries and eastern developing countries, during 1981 – 2005 and examine the influences of education, health and technological progress on the growth rate of labor productivity. The findings reveal that the growth rates of labor productivity of every country, except the Philippines, were greater than four percent per annum during 1981 – 2005. Eastern developed countries had the highest average annual growth rate of labor productivity, following by western developed countries, G7 countries and eastern developing countries. Additionally, only education and technological progress are the significant determinants of the growth rate of labor productivity.
An Empirical Analysis of Real Activity and Stock Returns in an Emerging Market
Mansor H. Ibrahim
Abstract:The present paper analyzes the role of stock market returns as a predictor of real output for a fast-growing emerging market, Malaysia. In the analysis, forecasting equations for 1-, 2-, 4-, and 8-quarter forecasting horizons based on autoregressive distributed lags framework are adopted. From the estimation, we find evidence that stock market returns do contain predictive ability at short-forecasting horizons, especially at less than 4-quarter horizons. Estimating the forecasting models recursively, we note reduction of out-of-sample forecasting evaluation statistics, namely the mean absolute errors (MAE) and the mean squared forecast errors (MSFE), from those obtained from the simple autoregressive (AR) model. More importantly, the null hypothesis of equal predictive accuracy between the model with stock returns as a predictor and the AR model is rejected for the 1-quarter and 2-quarter forecasting horizons by the McCraken’s (2007) out-of-sample-F statistics.
- Carbon sinks and climate change: forests in the fight against global warming, C.A. Hunt, Edward Elgar, 2009, 236 pages, ISBN 978-1-84720-977-1