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A replication of Pindyck’s willingness to pay: on the efforts required to obtain results

Author

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  • Luca Gerotto

    (Università Cattolica del Sacro Cuore
    Ca’ Foscari University)

  • Paolo Pellizzari

    (Ca’ Foscari University)

Abstract

We replicate and use more recent data to re-estimate the paper “Uncertain outcomes and climate change policy”, Pindyck, J. Environ. Econ. Manag., 2012. In several cases, verification analysis confirms the results and the associated economic interpretation. However, those results cannot be replicated in one out of five cases. The replication is, therefore, only partially successful: the numerical results for some sets of parameter values turn out to be overly sensitive to a variety of technical computational settings. This suggests that great caution is needed with regard to estimates and policy conclusions based on this model. A re-estimation of the model using more recent climate data, which suggests that temperature increase is now higher on average but less widely dispersed, does not lead to significant economic differences in the results.

Suggested Citation

  • Luca Gerotto & Paolo Pellizzari, 2021. "A replication of Pindyck’s willingness to pay: on the efforts required to obtain results," SN Business & Economics, Springer, vol. 1(5), pages 1-25, May.
    • Handle: RePEc:spr:snbeco:v:1:y:2021:i:5:d:10.1007_s43546-021-00069-2
    DOI: 10.1007/s43546-021-00069-2
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    More about this item

    Keywords

    Numerical replication; Numerical integration; Climate change; Economic impact; Uncertainty;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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