ECO 571
ADVANCED RESOURCE ECONOMICS I
University of Maine
Spring 2010
Instructor: Robb Freeman
Contact Information: Suite 300 Winslow Hall
581-3179 (UMO)
974-4648 (EMCC)
990-3310 (Home)
Class Meeting Schedule: Tuesdays/Thursdays 8:00 – 9:20 am, Winslow 201
Office Hours: Friday 1-3pmor by appointment
Course objectives: The purpose of this course is to introduce graduate students to the
application of microeconomic theory within the field of Resource Economics. Topics covered will include the estimation of nonmarket values for environmental and natural resource issues, land economics, ecological economics, and global ecosystem valuation. We will apply these principles to real-world scenarios and datasets, and the student should leave the course with a strong understanding of the practical applications of resource valuation and land use issues in Resource Economics.
At the end of this course students will be able to:
- Apply microeconomic theory, econometric techniques, and the stated and revealed preference methods learned in class to estimate the demand for nonmarket goods and services. This includes environmental and natural resources, as well as human health.
- Explain the economic basis of nonmarket valuation methods, as well as the benefits and problems associated with their use.
- Design and implement a nonmarket valuation survey or study.
- Explain the importance of accounting for spatial autocorrelation in economic models and identify an appropriate specification for economic models involving spatial relationships.
- Explain the economic basis of land valuation and land conversion.
Students will demonstrate the above on exams, written assignments, and in oral responses in class.
Required Textbook: Champ et al. A Primer on Nonmarket Evaluation. Kluwer Academic Publishers, 2003.
Supplemental Readings:
A. Myrick Freeman III. Measurement of Environmental and Resource Values: Theory and Methods. 2nd Edition. Resources for the Future, Washington DC. 2003. (on reserve at library)
Hanley et al. Environmental Economics: In Theory and Practice. Oxford University Press, 1997. (on reserve at library)
Charles D. Kolstad. Environmental Economics. Oxford University Press, 2000. (available in my office for short loans/ photocopies)
While the required readings will come primarily from the Champ text, it is strongly recommended that you supplement your weekly readings with the others listed in the course outline. Two of these textbooks are on reserve at the Fogler Library, and the other is available in my office. Additional readings in the form of journal articles will be assigned throughout the semester, and will be distributed to students on a weekly basis prior to discussing them in class. Although the course is designed around the format of the required textbooks, some of the concepts presented in the books provide more mathematical detail than will be required for successful completion of the course. Additional readings and the class lectures/discussions are intended to supplement the mathematical rigor found in the textbook. In other words, don’t worry if you don’t understand all the math because we will go over the important material in detail during the lectures.
Prerequisites: Graduate level course in microeconomics, calculus I, econometrics (preferred but not required).
Course Outline
The format of the course is a combination of lecture and class discussions. You will be assigned
homework sets that will generally be due at the beginning of class on the Tuesday following the
week in which the assignment was given. The homeworks will be worth 20 points each and the
lowest two scores will be dropped (there will be a total of seven homework sets due throughout
the semester with a total of five counting towards your final grade). Under no circumstances will
late homework assignments be accepted since wewill go over the answers at the beginning of
class on the day they are due.
Class participation is an essential component of the course, and you are expected to have done all required readings and to attend all classes. I will typically begin discussion of new material by asking students for their reaction to the reading. Thus I recommend that you write down one or two comments or questions about everything you read. I also recommend that you do the reading once before the lecture, and once afterwards when doing the homework set. If you know you will be absent on a given day, please let me know beforehand. Your participation grade will be evaluated based on your responses to direct questions posed in class, and active participation is strongly encouraged. I will also periodically assign required readings to individual students, and they will be responsible for the in-class discussion of that material. I will remind students throughout the semester about their performance (or lack of) in the area of class participation.
You will be required to complete an applied project using concepts developed in the course, and the structure will be discussed in detail later in the semester. Finally, there will be two in-class exams worth 50 points each. There will be no cumulative final in this course, nor will there be any exam given during the final exam period. If you need course adaptations or accommodations because of a disability, please contact Disability Support Services (East Annex, 581-2319).
AssignmentPoint TotalPercent of Grade
Homework Sets (20 points each)10025
Project10025
Participation10025
Exams(50 points each)10025
Tentative Course and Reading Outline
DATES / TOPIC / READINGS / DUE1/12 & 14 / Introduction to Economic Value / Champ, Ch. 1;
Freeman, Ch.1, Ch. 2, pp. 23-42
1/19 & 21 / Theory of Value / Champ, Ch. 2, pp. 27-39
Brown et al., 2006
Freeman Ch. 3
Kolstad Ch. 15
Hanley Ch. 12 / HW #1 (1/19)
1/26 & 28 / Data Collection Methods / Champ, Ch. 3
Tversky and Kahneman, 1974 / HW #2 (1/26)
2/2 / R tutorial
2/4 / Introduction to Stated Preference Models / Champ, Ch. 4
Portney, 1994
Freeman, Ch. 6 / HW #3 (2/4)
2/9 & 11 / Contingent Valuation / Champ, Ch. 5
Kolstad, Ch. 18
Hanley, Ch. 13, pp. 383-404 Welsh and Poe, 1998
Wiser, 2007
2/16 & 18 / Land Economics/Land Use / Bockstael & Iriwin, 2001
Kline, 2003
Lewis & Plantinga, 2007
2/23 / Review for exam and discuss project / HW #4
2/25 / Exam I – Stated preferences, Land use
Spring Break
3/16 & 18 / Revealed Preference Models
Introduce Travel Cost Approach / Champ, Ch. 8
Adamowicz et al., 1994
Freeman, Ch. 4
Hanley, Ch 13, pp. 404-418 / Project Proposal
(3 paper choices or research topic)
3/23 & 25 /
Travel Cost Approach contd.
/ Champ, Ch. 9, pp. 269-296Blackwell et al. 2009
Freeman, Ch. 13, pp. 417-433
Kolstad, Ch17, pp. 344-350
3/30, 4/1 / Hedonic Models / Champ, Ch. 10, pp. 331-364
Michael et al. 2000
Hardie et al., 2007
Kolstad, Ch 16, Ch17 pp. 336-334
Freeman, Ch 11 / HW #5 (4/1)
4/6 & 8 / Spatial Econometric Issues / Holloway et al., 2007
Blackman et al., 2008
Irwin, 2002 / HW #6 (4/10)
DATES / TOPIC / READINGS / DUE
4/6 & 8 / Interdisciplinary modeling, ecological economics / Palmer et al., 2002
Jiang et al., 2007
Polasky et al., 2008
4/20 /
Global ecosystem valuation
Review for Exam II
/ Costanza et al., 1997Bockstael et al., 2000 / HW #7 (4/20)
4/22 / Exam II – Revealed Preferences
4/27 /
Presentation of Projects
4/29 /Presentation of Projects
5/4 /Final Project Due
Items in bold are required readings
1