Economics

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This paper characterizes status quo rules in the binary social choice environment. We consider the full preference domain which allows for indifference. We show that status quo rules are the only rules that satisfy ontoness, strategy-proofness and a solidarity property. The solidarity property that we consider, positively correlates the welfare of a voter to rest of the voters in case of her improvement. It is independent from the usual solidarity axiom of welfare dominance under preference replacement used in the literature. © 2020 Elsevier B.V.

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(SoHSS) School of Humanities and Social Sciences

Economics Letters

A characterization of status quo rules in the binary social choice model

Climate change can adversely impact the quality of environmental services provided under Payments for Ecosystem Services (PES) programs, thereby reducing their effectiveness. In this paper, a modelling framework is developed to explore how PES negotiations between forestry and fishery-based communities may be affected when warming reduces the stock of fish as well as forest biomass growth rates. Under a PES arrangement, forestry-based communities afforest the lake's catchment region, which helps improve fish stock abundance through reduced sediment loading. When climate warming adversely impacts fish yields, the value of restoring degraded lands in the catchment region increases, making the negotiating powers of the fishing and forestry dependent communities dynamic. Results suggest that the prospect of a climate-driven negotiating power in the future calls for higher PES payments by the fishing community in order to incentivize early restoration. Warming could also affect forest biomass growth rates in the long run. However, findings from this study suggest that warming driven forest biomass growth rate decline may have a relatively lower impact on PES negotiations compared to the direct impact of warming on lake's fish productivity. © 2020 Elsevier B.V.

Ecological Economics

Protecting warming lakes through climate-adaptive PES mechanisms

In this paper, we show that firms might get an additional strategic benefit from using marginal-cost-reducing investments in conjunction with strategic delegation. While both these instruments allow firms to "aggressively"participate in product market competition, we show that they act as substitutes or complements depending on whether they are chosen simultaneously or sequentially. Given that the use of such instruments is inseparably linked with a Prisoner's Dilemma kind of situation, our analysis shows a way to mitigate at least to some extent such effects, through their simultaneous use. We find that the unique Nash equilibrium of the game with commitment comprises both players choosing the instruments simultaneously. In case the instruments are chosen without commitment, an asymmetric equilibrium is shown to exist in addition to the simultaneous protocol, yielding unequal payoffs. © 2020 World Scientific Publishing Company.

International Game Theory Review

Investment Choice with Managerial Incentive Schemes

We study strategy-proof rules for choosing between two alternatives. We consider the full preference domain which allows for indifference. In this framework, for strategy-proof rules, ontoness does not imply efficiency. We weaken the requirement of efficiency to ontoness and characterize the class of strategy-proof rules. We argue that the notion of efficiency is not desirable always. Further, we provide a simple description of the class of onto, anonymous and strategy-proof rules in this framework. The key feature of our characterization results brings out the role played by indifferent agents. © 2019, Springer-Verlag GmbH Germany, part of Springer Nature.

Fulltext

Social Choice and Welfare

On strategy-proof social choice between two alternatives

While quota-based and other affirmative actions remain on the policy radar of nations faced with social inequalities, there is limited evidence informing policy choices at the national level. This paper estimates the mid-term impact of quota-based affirmative action in higher education (HE) in India implemented from 2008, which mandates that 27 per cent of seats are to be reserved for the Other Backward Classes (OBC) in public funded institutions of HE. Exploiting the differences in participation across social groups, age cohort,s and geographies with varied histories of affirmative action, our triple difference method estimates the impact of the Act by the year 2011–2012. Our results indicate that southern and northcentral states that already had quotas in place for a fairly long period of time, do not contribute much in further expansion of enrolment of OBCs; instead, the eastern region, where such a policy did not exist for long has about 0.12 points improvement in enrolment. Our estimates are robust to different specifications and the impact seems to be non-existent amongst the richest. It suggests that future policy initiatives need to be more nuanced considering regional differences in policy histories, supply of institutions, and extant rates of HE participation of the disadvantaged sections. © 2019, © 2019 Informa UK Limited, trading as Taylor & Francis Group.

Journal of Development Studies

Quota-Based Affirmative Action in Higher Education: Impact on Other Backward Classes in India

A road map for resuming limited economic activities with necessary precautions in certain industries that can lessen economic pain, given the prevailing situation, has been drawn up in this paper. It identifies industries and districts that can start functioning in a limited manner, informed by geographical, occupational, and other industry-specific data. © 2020 Economic and Political Weekly. All rights reserved.

Economic and Political Weekly

Lives and livelihood: An exit strategy from lockdown

We study optimal fiscal policy in a stock-flow model of the environment within an endogenous growth framework, where some pollutants have a lasting impact on environmental quality which is restored through abatement expenditure, while others dissipate and hence, have a short-term effect on the environment. All pollutants, however, affect the productivity of a public good negatively. Given that short-term pollution, although it dissipates, is irreversible in this sense, a government cannot ignore its negative effects since this type of pollution lowers the productivity of all inputs. We find that a larger negative effect of short-term pollutants as well as a higher congestion effect of private capital leads to corrective fiscal policies with higher optimal income tax and abatement expenditure rates, which have favorable growth consequences. Interestingly, we find that the rate of short-term pollution does not affect optimal fiscal policy while that of the long-term pollution does. © 2020 Wiley Periodicals, Inc.

Journal of Public Economic Theory

Are short-term effects of pollution important for growth and optimal fiscal policy?

A payment for ecosystem services mechanism is designed to support an environmental enterprise aimed at controlling Lantana camara, an invasive weed that is costly to eradicate. A forest reserve manager engages the local community in lantana control efforts. The community converts the weeds into household durable items for sale. However, as markets for such products may not account for the environmental services generated through weed control, the enterprise could fail for want of additional financial support. The challenge addressed in this paper is to incorporate the full environmental benefits of the weed-based enterprise and provide adequate compensation to the local community. An optimal compensation mechanism is derived through linking the ecological dimension of weed growth to its impact on biodiversity values within the reserve. Results indicate that optimal payments to the community would need to take into consideration both the value addition to the environment from controlling the invasive weed and the opportunity cost of participation by the community. When there exists a risk of enterprise failure due to low profitability, higher payments by the manager are required. However, the best environmental outcomes are obtained when the manager incorporates the welfare of the local community within the utility function. © 2019 Elsevier B.V.

Deriving double dividends through linking payments for ecosystem services to environmental entrepreneurship: The case of the invasive weed Lantana camara

We explore the role of mining in contributing to deforestation across 300 plus districts in India. Using a unique dataset, covering the period 2001–2014, the impact of mining related deforestation is delineated from those driven by various socio-economic, demographic and climatic factors. The roles of several minerals, such as coal, iron, bauxite, dolomite, limestone, manganese, quartz, fireclay and granite are explicitly tested using econometric analysis. Findings indicate that, on average, a district that did not produce any of the minerals considered in the study had suffered about 350 km2 lower forest area loss compared to a mineral producing district. Districts that produced coal, iron or limestone, saw on average 450 km2 higher forest cover loss compared to those that did not produce the same minerals. Iron ore production was positively associated with barren land area across districts, whereas forest cover loss was higher in districts that produced higher amounts of limestone or granite. Overall, mining has evidently contributed to deforestation at a district level, and within the mineral groups considered in this study, coal, iron and limestone have had the most adverse impact on forest area loss. However, minerals such as fireclay, manganese, dolomite, and quartz are being produced in districts that have seen either a lower deforestation rate or an improvement in forest area over the study period. Among the non-mining related drivers of deforestation, higher share of cropping area in a district's geographical area significantly contributed to deforestation. © 2018 Elsevier Ltd

Resources Policy

Assessing the impact of mining on deforestation in India

Compared to conventional abatement measures, Reducing Emissions from Deforestation and Forest Degradation (REDD) offers attractive cost savings while tackling the climate change problem. However, there exist challenges associated with the selection of the optimal level of REDD-based abatement given the risks and non-uniform costs of their implementation across countries. This paper develops an integrated assessment model of carbon mitigation, incorporating the REDD option. Using a dynamic optimization framework, it derives the optimal timing and level of REDD participation for key countries with REDD potential based on their opportunity costs and risks. Specifically, Brazil, Indonesia, the Democratic Republic of Congo, Cameroon and Papua New Guinea, are chosen for inclusion under the REDD-based abatement option. Together, these five countries account for roughly 20 percent of global forest area and 40 percent of current global deforestation. The relevance and contribution of REDD-based abatement is explored under the possibility of non-linear damages resulting from increasing concentrations of greenhouse gases. Results indicate that the REDD programme is an attractive option to consider despite the associated risks of impermanence. Including the REDD option, in fact, also increases conventional abatement efforts because low costs of REDD reduce the overall abatement costs, thereby making it optimal to abate more. Further, use of REDD option helps stabilise the atmospheric carbon stock in the long term. Without REDD, atmospheric carbon concentrations would be higher by 800 billion tonnes in the next 300 years. Whereas, optimal implementation of REDD in just five countries would help avoid the release of about 80 billion tonnes of carbon in the next 50 years. © 2019