Benefit-cost analysis remains the central paradigm used throughout the public sector. A necessary condition underlying efficient benefitcost analysis is an accurate estimate of the total value of the nonmarketed good or service in question. While economists have long measured the benefits of private goods routinely bought and sold in the marketplace, a much more difficult task faces the practitioner interested in estimating the total benefits of increased air and water quality, for example. In such cases, policy makers rely on stated preference methods (contingent markets) to provide signals of value. Recently there has been a lively debate about whether, and to what extent, "hypothetical bias" permeates benefit estimation in contingent markets.' This debate has proliferated among academics and practitioners over the past several decades, and continues to find its way into public disputes of damage assessment, development decisions, and discussions of optimal regulatory standards. This study extends the debate in a new direction by taking advantage of a unique opportunity we were provided at the University of Central Florida (UCF), where we were ap

Many argued during the NAFTA debate that trade liberalization would favor Mexican over U.S. food processors, especially because of lax environmental laws south of the border. We find through an examination of profit functions that productivity growth in Mexico has outstripped that in the United States, suggesting free trade indeed will benefit Mexican suppliers. U.S. pollution regulations have had no impact on the profitability or productivity of U.S. food manufacturing. In contrast, Mexico's swiftly rising environmental standards have enhanced food processors' productivity growth, corroborating the Porter hypothesis. Pollution law, therefore, has favored Mexican over U.S. food processing, but for reasons few had anticipated. Copyright 2002, Oxford University Press.

No abstract

No abstract

No abstract