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CR 33:43-54 (2006)  -  doi:10.3354/cr033043

Economics and climate applications: exploring the frontier

Debra J. Rubas1,*, Harvey S. J. Hill2, James W. Mjelde3

1United States Department of Agriculture, Foreign Agricultural Service, 1400 Independence Avenue SW, Stop 1034, Washington, DC 20250, USA
2Agriculture and Agri-Food Canada, Prairie Farm Rehabilitation Administration, Room 1101, 11 Innovation Blvd., Saskatoon, Saskatchewan S7N3H5, Canada
3Department of Agricultural Economics, Texas A&M University, College Station, Texas 77843-2124, USA

ABSTRACT: The economics of information is a broad field covering all aspects of information including decision making. We briefly describe 4 methods used to model the decision-making process. This is not an exhaustive list of the methods used to value information, nor are differences between the methods clearly definable. Examples of previous studies using each methodology are presented, as are tradeoffs between the methodologies. Climate forecast issues are generally treated by economists as applied problems. Though applied studies are extremely important, we believe climate forecast issues have the potential for more innovative and rigorous treatment that could lead to theoretical advances in the economics of information. Several examples of researchable issues that we believe could lead to such advances (e.g. the use of climate forecasts in pollution trading; natural disaster mitigation) are then discussed. Maximum benefits can be attained from such a research process that involves policy-makers and end-users, as well as other scientists.

KEY WORDS: Economics · Climate applications · Decision theory · General equilibrium modeling · Game theory · Mechanism design theory

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