Recent Publications By Year

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The Department of Environmental Economics and Management

The Robert H. Smith Faculty
of Agriculture, Food and Environment
The Hebrew University of Jerusalem

PO Box 12, Rehovot 76100
Fax: 08-9466267

Department Head:
Prof. Ayal Kimhi, Tel: 08-9489376, email: ayal.kimhi@mail.huji.ac.il

Secretary: 
Miri Arazi, Tel: 08-9489230, email: miriguy@savion.huji.ac.il
 

Publications

2019
Elimelech, E. ; Ert, E. ; Ayalon, O. Bridging the gap between self-assessments and measured household food waste: A hybrid valuation approach. Waste Management 2019, 95, 259 - 270. Publisher's VersionAbstract
Great effort is invested in mapping the extent of household food waste and its main determinants. However, food waste valuation remains a challenging task. Valuation methods can be divided roughly into objective measurements that are based on physical waste surveys, and subjective self-assessments that are based on diaries or questionnaires. Self-assessment methods have been more popular than food waste measurement because they are less costly. The goal of this paper is to empirically test whether self-assessments can accurately reflect objective measurement. To answer this question, we implemented a hybrid valuation approach by integrating and comparing three methods: a self-assessment questionnaire, a physical waste survey, and a food expenditure survey. Self-assessments slightly underestimated measured food waste proportion (13.7% vs. 16.3%, respectively). The results also show a positive, yet, not very strong correlation between the measures and the self-assessments of unconsumed and partly consumed avoidable food waste in most food categories. Self-assessments of monetary losses were €42.07 per household per month on average, overestimating calculated losses of €25.74 on average. Our findings question the validity of self-assessments. The current paper demonstrates the questionable nature of the implicit assumption that self-assessment reflects the true level of food waste and suggests a rigorous method for exploring this relation.
Elimelech, E. ; Ert, E. ; Ayalon, O. Exploring the Drivers behind Self-Reported and Measured Food Wastage. Sustainability 2019, 11. Publisher's VersionAbstract
Understanding households’ food waste drivers is crucial for forming a coherent policy to meet the sustainable development goals. However, current studies have documented mixed evidence regarding food waste determinants. Most studies have relied on self-reports, assuming they reflect actual behaviors. This study applies a structural equation model that evaluates both self-reported and measured food wastage, and how they are affected by different households’ attributes, attitudes, and behaviors. As such, it also provides a test for the underlying logic that self-reports are a proxy for actual food waste. Results show that measured food wastage is, at best, weakly correlated with self-reports. Moreover, drivers affecting self-reported and measured food wastage are not necessarily the same. Household size affects only measured food wastage. Source separation behavior negatively affects self-reported and measured food wastage, while environmental attitudes have a negative effect only on self-reports. Meal planning, unplanned shopping, and food purchased have no impact on self-reported and measured food wastage. The relation between self-reported and actual food waste and their drivers are even less understood than we thought. The distinction between self-reports and actual waste is crucial for follow-up research on this subject as well as assessing policy measures.
Perez-Sebastian, F. ; Raveh, O. Federal tax policies, congressional voting and natural resources. Canadian Journal of Economics/Revue canadienne d'économique 2019, 52, 1112-1164. Publisher's VersionAbstract
Abstract Can abundance of natural resources affect legislators' voting behaviour over federal tax policies? We construct a political economy model of a federalized economy with district heterogeneity in natural resource abundance. The model shows that representatives of natural resource-rich districts are more (less) willing to vote in favour of federal tax increases (decreases). This occurs because resource-rich districts are less responsive to federal tax changes due to the immobile nature of their natural resources. We test the model's predictions using data on roll-call votes in the US House of Representatives over the major federal tax bills initiated during the period of 1945–2003, in conjunction with the presence of active giant oil fields in US congressional districts. Our identification strategy rests on plausibly exogenous giant oil field discoveries and exploitation and narrative-based aggregate federal tax shocks that are exogenous to individual congressional districts and legislators. We find that: (i) resource-rich congressional districts are less responsive to changes in federal taxes and (ii) representatives of resource-rich congressional districts are more (less) supportive of federal tax increases (decreases), controlling for legislator, congressional district and state indicators. Our results indicate that resource richness is approximately half as dominant as the main determinant, namely party affiliation, in driving legislators' voting behaviour over federal tax policies.
Perez-Sebastian, F. ; Raveh, O. ; Reingewertz, Y. Heterogeneous vertical tax externalities and macroeconomic effects of federal tax changes: The role of fiscal advantage. Journal of Urban Economics 2019, 112, 85 - 110. Publisher's VersionAbstract
How do state tax rates respond to federal tax shocks? This paper presents a novel mechanism of heterogeneous vertical tax externalities across state-levels of fiscal advantage, showing that tax increases can be expansionary – even without their reinvestment. States rich in natural resources have a fiscal advantage in the inter-state competition over production factors which allows them to respond better to increases in federal taxes and, consequently, attract capital from other parts of the nation. We add heterogeneity in fiscal advantage levels to an otherwise standard model of vertical tax externalities and horizontal tax competition. The model shows that, irrespective of federal redistribution, the contractionary effect of a federal tax increase can be overturned in fiscally advantaged states, through an increase in their tax base. Using the case of the U.S., and narrative-based measures of federal tax shocks a-la Romer and Romer (2010), we provide empirical evidence for the various aspects of this mechanism. Specifically, our baseline estimates indicate that, controlling for federal transfers, a 1% increase in the GDP share of capital-related federal taxes at the beginning of a year increases the growth rate of the per capita tax base by approximately 0.7% in high fiscal advantage states at the end of it.
Kimhi, A. ; Hanuka-Taflia, N. What drives the convergence in male and female wage distributions in Israel? A Shapley decomposition approach. The Journal of Economic Inequality 2019, 17, 379–399. Publisher's VersionAbstract
We examine the drivers of the convergence of the hourly wage distributions of males and females in Israel between 1995 and 2008. Israel is an interesting case study in this respect, since it experienced declining wage inequality in recent decades, as opposed to most developed countries. We found that the gender differences in both average wages and wage inequality declined over time. In particular, average wages increased faster for females than for males, while wage inequality declined faster for males than for females. We decomposed these distributional changes into the contributions of worker and job attributes, the returns on these attributes and residuals using a Shapley approach applied to counterfactual simulated wage distributions. We found that most of the increase in male wages was due to the increase in wages of workers in high-wage occupations and industries, while female wages increased mostly due to the increase in the returns to experience. The decline in wage inequality was driven mostly by changes in attributes, the decline in the returns to education, and the catching-up of immigrant workers, and each of these components was stronger for males than for females. We conclude that the convergence of the male and female wage distributions was due to both changes in the supply of labor, especially among females, and changes in the demand for labor leading to changes in the returns to various skills.
Reitan, A. ; Rubin, O. D. ; Rubin, A. ; Kimhi, A. Privatization, demographic growth, and perceived sustainability: Lessons from the Israeli renewing kibbutzim. Sustainable Development 2019. Publisher's VersionAbstract
Abstract In 2005, the State of Israel established a new classification?renewing kibbutzim. This study examines the relationship between the extent of privatization and the various forms of demographic growth that were permissible under the new classification and their impact on the perceived sustainability of the kibbutz in these communal communities. We collected data at the kibbutz level via interviews with community managers and at the individual level through questionnaires among community members in 19 kibbutzim. We employed the ?nearest neighbor? methodology to create pairs who were demographically eligible for a before and after comparison. Although our results about perceived sustainability suggest that kibbutzim across the board have overcome the struggle to survive and have been able to recover, unlike commonly assumed, changes they adopted in the direction of more privatization and diversified statuses are clearly correlated with smaller increases in levels of perceived sustainability. Our findings may offer lessons for wider sociological questions concerning processes of privatization and stratification.
Zelingher, R. ; Ghermandi, A. ; De Cian, E. ; Mistry, M. ; Kan, I. Economic Impacts of Climate Change on Vegetative Agriculture Markets in Israel. Environmental and Resource Economics 2019. Publisher's VersionAbstract
We integrate the combined agricultural production effects of forecasted changes in CO2, temperature and precipitation into a multi-regional, country-wide partial equilibrium positive mathematical programming model. By conducting a meta-analysis of 2103 experimental observations from 259 agronomic studies we estimate production functions relating yields to CO2 concentration and temperature for 55 crops. We apply the model to simulate climate change in Israel based on 15 agricultural production regions. Downscaled projections for CO2 concentration, temperature and precipitation were derived from three general circulation models and four representative concentration pathways, showing temperature increase and precipitation decline throughout most of the county during the future periods 2041–2060 and 2061–2080. Given the constrained regional freshwater and non-freshwater quotas, farmers will adapt by partial abandonment of agriculture lands, increasing focus on crops grown in controlled environments at the expense of open-field and rain-fed crops. Both agricultural production and prices decline, leading to reduced agricultural revenues; nevertheless, production costs reduce at a larger extent such that farming profits increase. As total consumer surplus also augments, overall social welfare rises. We find that this outcome is reversed if the positive fertilization effects of increased CO2 concentrations are overlooked.
Heiman, A. ; Gordon, B. ; Zilberman, D. Food beliefs and food supply chains: The impact of religion and religiosity in Israel. Food Policy 2019, 83, 363 - 369. Publisher's VersionAbstract
This paper demonstrates that religion and religiosity affect norms, which affect food consumption patterns and production. Heterogeneity and asymmetric information lead to multiple certification channels as well as multiple supply chains. Major supply chains may address multiple constituencies that are secular or less religious. Technological change affects norms and thus the food system. We obtain these results by analyzing the food systems for meat products in Israel where there are three religions – Jews, Muslims, and Christians – and people assign themselves three levels of religiosity – secular, conservative, and orthodox. Israel has multiple Kosher and Halal certifiers and several specialized supermarket chains for orthodox groups. Its main supermarket chains serve secular and some conservative segments. The immigration of secular Jews from Russia led to the proliferation of non-Kosher supply chains and products, and increased consumption of pork. New technologies and higher incomes led to emergence of fast food chains serving orthodox Jews that had previously tended to eat at home.
Ert, E. ; Fleischer, A. The evolution of trust in Airbnb: A case of home rental. Annals of Tourism Research 2019, 75, 279 - 287. Publisher's VersionAbstract
Airbnb, a leader of P2P accommodation markets, has acknowledged that “trust is what makes Airbnb work” and has implemented several trust indicators over the years: reputation system, impression formation, and certification. We evaluate the changes in these indicators over time: 1. the modification of the reputation system, 2. the removal of hosts’ photos from the main search screen, and 3. the introduction of the Superhost program. We find that the change of the rating system was associated with a small, yet significant, reduction in ratings, that the removal of the hosts’ photos might have eliminated the price premium of trustworthy images, and that Superhost certification involves a price premium, but does not seem to compensate for established reputation. This article also launches the Annals of Tourism Research Curated Collection on Peer-to-peer accommodation networks, a special selection of research in this field.
Ert, E. ; Cohen-Amin, S. ; Dinar, A. The effect of issue linkage on cooperation in bilateral conflicts: An experimental analysis. Journal of Behavioral and Experimental Economics 2019, 79, 134 - 142. Publisher's VersionAbstract
Bilateral conflicts, e.g., common pool resource allocation, pollution prevention, collusion of markets, or share transboundary water, often involve more than one issue that requires solution. The theoretical literature suggests that linking conflictive issues opens new opportunities for cooperation. We present a new experimental setting of bilateral conflicts, in which each issue is modeled as a separate Prisoner's Dilemma game. In two experiments, the effect of issue-linkage on cooperation is evaluated by comparing a treatment in which the two games are played sequentially (isolated treatment) with one where they are played simultaneously (linked treatment). Specifically, in the linked treatment each agent observes the payoffs from playing the different paths across games (e.g., cooperate in game1 but defect in game2) and then acts accordingly by committing to one of these paths. We differentiate the case where issue linkage implies symmetrical payoffs across games (Experiment 1), from the asymmetric case where one agent receives higher benefits from issue-linkage (Experiment 2). We find that issue linkage increases mutual cooperation and decreases mutual defection. Asymmetry reduces the level of cooperation in both isolated and linked games, yet issue linkage facilitates cooperation even when payoffs are asymmetric.
2018
Tsur, Y. ; Zemel, A. Water policy guidelines: A comprehensive approach. Water Resources and Economics 2018, 23, 1 - 13. Publisher's VersionAbstract
We study water management in the context of a prototypical water economy containing the main water sources and user sectors. A water policy consists of water allocation from each source to each user sector at each point of time as well as the capital investments needed to carry out these allocations. We show that the optimal policy brings the water capital stocks (infrastructure and equipment) to well-specified turnpike processes as rapidly as possible and evolves along these turnpikes thereafter, eventually converging to a unique steady state. Implications for water pricing, as well as for the timing and extent of recycling and desalination activities, are discussed.
Perez-Sebastian, F. ; Raveh, O. What drives vertical fiscal interactions? Evidence from the 1980 Crude Oil Windfall Act. Regional Science and Urban Economics 2018, 73, 251-268.Abstract
In economies with multi-level governments, why would a change in the fiscal rule of a government in one level lead to a fiscal response by a government in a different level? The literature focused primarily on the standard common-pool problem, while giving little attention to the potential role of complementarity or substitutability (CS) between the public goods supplied by the two governments. This paper fills this gap by focusing on the latter channel. First, we illustrate its potential key role in determining the sign of the vertical reaction through a generic model of vertical fiscal interactions. Second, we propose a novel strategy for identifying it, by considering an empirical design that confines the common-pool channel to specific locations. We implement this design through a quasi-natural experiment: the 1980 U.S. Crude Oil Windfall Act, which increased federal tax collections from sale of crude oil, thereby affecting the tax base of oil rich states specifically. This latter feature enables attributing the vertical fiscal reactions of the remaining states to the CS channel. Following this strategy, via a difference-in-differences approach, we decompose the sources of the vertical fiscal reactions arising from this federal tax change and find that those attributed to the CS channel: (i) account for approximately 38% of the overall vertical fiscal response; (ii) point at complementarity between state and federal public goods, most notably in transportation and welfare expenditures; (iii) are manifested primarily via changes in states' sales and income taxation.
Tsur, Y. ; Zemel, A. Water policy guidelines: A comprehensive approach. Water Resources and Economics 2018, 23, 1 - 13. Publisher's VersionAbstract
We study water management in the context of a prototypical water economy containing the main water sources and user sectors. A water policy consists of water allocation from each source to each user sector at each point of time as well as the capital investments needed to carry out these allocations. We show that the optimal policy brings the water capital stocks (infrastructure and equipment) to well-specified turnpike processes as rapidly as possible and evolves along these turnpikes thereafter, eventually converging to a unique steady state. Implications for water pricing, as well as for the timing and extent of recycling and desalination activities, are discussed.
Fishman, A. ; Finkelstein, I. ; Simhon, A. ; Yacouel, N. Collective brands. International Journal of Industrial Organization 2018, 59, 316 - 339. Publisher's VersionAbstract
We analyze the effect of a shared brand name, such as geographically designated agricultural brands, on incentives of otherwise autonomous firms of the same type to establish a collective reputation for product quality. When firms of the same type share the same brand name, consumers have more observations of past quality and are able to predict quality with greater precision than if brands are private. This effect increases firms’ incentive to invest in quality. On the other hand, a shared brand name may motivate free riding on the group’s reputation, reducing incentives to invest. We identify conditions under which the former effect is dominant and leads to higher quality than stand alone firms can achieve.
Raviv, O. ; Broitman, D. ; Ayalon, O. ; Kan, I. A regional optimization model for waste-to-energy generation using agricultural vegetative residuals. Waste Management 2018, 73, 546 - 555. Publisher's VersionAbstract
The spatial distribution of vegetative agricultural residuals (VAR) implies that any waste treatment system (WTS) designed to manage VAR is particularly sensitive to transportation costs. Additionally, a wide range of treatment technologies is potentially available for VAR treatment, but some of them lack a well-developed market for their output products. This study develops a method to design an economically feasible VAR treatment system, analyzing the profitability of the system as a function of logistics and uncertain market prices of the available treatment technologies' products. The design method includes an economic optimization model followed by a sensitivity analysis of the potential changes in the system’s profitability. The results show that the market price of the treatment technologies' products has a larger impact on the system’s profitability than transportation costs. Specifically, if biochar prices reach the level forecasted by experts, pyrolysis will become the dominant technology of the WTS. The research highlights the importance of the treatment technology selection and the location of treatment facilities in the design of an optimal WTS for VAR.
Broitman, D. ; Raviv, O. ; Ayalon, O. ; Kan, I. Designing an agricultural vegetative waste-management system under uncertain prices of treatment-technology output products. Waste Management 2018, 75, 37 - 43. Publisher's VersionAbstract
Setting up a sustainable agricultural vegetative waste-management system is a challenging investment task, particularly when markets for output products of waste-treatment technologies are not well established. We conduct an economic analysis of possible investments in treatment technologies of agricultural vegetative waste, while accounting for fluctuating output prices. Under a risk-neutral approach, we find the range of output-product prices within which each considered technology becomes most profitable, using average final prices as the exclusive factor. Under a risk-averse perspective, we rank the treatment technologies based on their computed certainty-equivalent profits as functions of the coefficient of variation of the technologies’ output prices. We find the ranking of treatment technologies based on average prices to be robust to output-price fluctuations provided that the coefficient of variation of the output prices is below about 0.4, that is, approximately twice as high as that of well-established recycled-material markets such as glass, paper and plastic. We discuss some policy implications that arise from our analysis regarding vegetative waste management and its associated risks.
Castillo, F. ; Gilless, J. K. ; Heiman, A. ; Zilberman, D. Time of adoption and intensity of technology transfer: an institutional analysis of offices of technology transfer in the United States. The Journal of Technology Transfer 2018, 43, 120 - 138. Publisher's VersionAbstract
This paper considers the adoption of institutional innovations by not for profit organizations, an issue that can be considered in the context of the extensive literature on the adoption of technological innovation by firms. The specific institutional innovation considered is the offices of technology transfer (OTT)—the organization that assemble and disclose university innovations and negotiate and enforce licenses with users of these innovations. We propose a theoretical framework that depart from previous studies by focusing on the timing decision of institutions rather than on the percentage of institutions that adopt at each point in time. Our theoretical framework also incorporates organization theory via imitation effects on the timing of adoption. We find that number of adopters has an S-shape function of time, which may indicate a strong element of imitation led universities to create OTTs. We also find that universities with higher research incomes and rankings were earlier adopters of the OTT model and that universities with medical schools were generally late adopters. Finally, we find that the number of universities who have already adopted the OTT model increases the speed by which other non-adopters make their OTT adoption decisions and that the number of invention disclosures, a primary indicator of output of OTTs, increases with the size of research budget, is smaller for those with medical schools, and larger for those that were earlier adopters of OTT. Section 1 of the paper discusses the recent trends in technology transfer while Section 2 reviews the advent of OTTs as facilitators of technology transfer activities. Section 3 reviews the relevant technology and institutional innovation literature. Section 4 develops a conceptual framework that links Sections 2 and 3 to analyze the advent and timing of the establishment of OTTs. Section 5 estimates the time of adoption of the OTT working model on the part of major research universities in the US, and analyzes the impact of time of adoption of the OTT model on the intensity of the technology transfer process. Section 6 presents empirical results while the conclusions and policy implications are discussed in Section 7.
Chakraborty, P. ; Raveh, O. Input-trade liberalization and the demand for managers: Evidence from India. Journal of International Economics 2018, 111, 159 - 176. Publisher's Version
Heiman, A. ; Hildebrandt, L. Marketing as a Risk Management Mechanism with Applications in Agriculture, Resources, and Food Management. Annual Review of Resource Economics 2018, 10, 253 - 277. Publisher's VersionAbstract
Marketing tools, in addition to their role in persuasion and serving as a bridge between production and consumers, reduce prepurchase risks. This role has received less attention in the literature. This review highlights marketing's role in reducing consumers? purchasing risk. We present our approach, backed up with extensive literature review, beginning with a description of advertising, branding, and pricing that may serve as a signal of a product's quality. We then describe and analyze the role of product demonstrations, free product samples, and money-back guarantees (MBGs), which enable consumers to acquire direct experience before a final decision is made, in reducing risks. We briefly discuss product warranties and their relationship to MBGs. We demonstrate how marketing tools can help reduce the risk associated with the consumption of food products that contain genetically modified organisms, as well as help in marketing of agricultural products that vary in their levels of risk to buyers.Marketing tools, in addition to their role in persuasion and serving as a bridge between production and consumers, reduce prepurchase risks. This role has received less attention in the literature. This review highlights marketing's role in reducing consumers? purchasing risk. We present our approach, backed up with extensive literature review, beginning with a description of advertising, branding, and pricing that may serve as a signal of a product's quality. We then describe and analyze the role of product demonstrations, free product samples, and money-back guarantees (MBGs), which enable consumers to acquire direct experience before a final decision is made, in reducing risks. We briefly discuss product warranties and their relationship to MBGs. We demonstrate how marketing tools can help reduce the risk associated with the consumption of food products that contain genetically modified organisms, as well as help in marketing of agricultural products that vary in their levels of risk to buyers.
Elimelech, E. ; Ayalon, O. ; Ert, E. What gets measured gets managed: A new method of measuring household food waste. Waste Management 2018, 76, 68-81.Abstract
The quantification of household food waste is an essential part of setting policies and waste reduction goals, but it is very difficult to estimate. Current methods include either direct measurements (physical waste surveys) or measurements based on self-reports (diaries, interviews, and questionnaires). The main limitation of the first method is that it cannot always trace the waste source, i.e., an individual household, whereas the second method lacks objectivity. This article presents a new measurement method that offers a solution to these challenges by measuring daily produced food waste at the household level. This method is based on four main principles: (1) capturing waste as it enters the stream, (2) collecting waste samples at the doorstep, (3) using the individual household as the sampling unit, and (4) collecting and sorting waste daily. We tested the feasibility of the new method with an empirical study of 192 households, measuring the actual amounts of food waste from households as well as its composition. Household food waste accounted for 45% of total waste (573 g/day per capita), of which 54% was identified as avoidable. Approximately two thirds of avoidable waste consisted of vegetables and fruit. These results are similar to previous findings from waste surveys, yet the new method showed a higher level of accuracy. The feasibility test suggests that the proposed method provides a practical tool for policy makers for setting policy based on reliable empirical data and monitoring the effectiveness of different policies over time.