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    Stavins, Robert N, and Adam B Jaffe. “Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands.” The American Economic Review 80 (1990): 337–352. Publisher's VersionAbstract
    impacts_of_public_investments_aer1990.pdf

    By affecting relative economic returns, public infrastructure investments can induce major changes in private land use. We find that 30 percent of forested wetland depletion in the Mississippi Valley has resulted from private decisions induced by federal flood-control projects, despite explicit federal policy to preserve wetlands. Our model aggregates individual land-use decisions using a parametric distribution of unobserved land quality; dynamic simulations are used to quantify the impacts on wetlands of federal projects and other factors.

    A-4

    Stavins, Robert N. “Transaction Costs and Tradeable Permits.” Journal of Environmental Economics and Management 29 (1995): 133–148. Publisher's VersionAbstract
    transaction_costs_jeem.pdf

    Tradeable-permit systems are at the center of current interest and activity in market-based reforms of environmental policy, because these systems can offer significant advantages over conventional approaches to pollution control. Unfortunately, claims made for their relative cost-effectiveness have often been exaggerated. Transaction costs, which may be significant in these markets, reduce trading levels and increase abatement costs. In some cases, equilibrium permit allocations and hence aggregate control costs are sensitive to initial permit distributions, providing an efficiency justification for politicians′ typical focus on initial allocations.

    A-16

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