Knowledge that Transforms

Although the past 20 years have witnessed increasing sophistication in dealing with environmental externalities, existing programs of pollution abatement remain well behind the state of the art. One major problem is that program objectives are typically specified in terms of reductions in emissions, not in terms of attained ambient conditions.' But, even when from localized sources, emissions can have spatially differentiated effects; hence, emissions reductions often do not translate in a straightforward manner into improvements in environmental quality. With multiple sources of airborne contaminants, efficient achievement of ambient air quality objectives will depend generally not only on the cost structures of abatement at the various sources, but also on the ways in which emissions from those sources disperse into the receptor regions of interest. What is more, different geographic regions may fall under different national jurisdictions. When program objectives are formulated in terms of ambient air quality, that multijurisdictional (or 'transboundary) character may become an important feature of both the problem and its solution. Efforts to achieve domestic objectives using autarkic controls may often not even be feasible. Even when feasible, autarkic programs are likely to be inefficient when compared to multijurisdictional efforts. In this paper I exploit a recent, comprehensive inventory of North American sources of acid rain precursors, developed under the auspices of the U.S. Environmental Protection Agency (EPA), to study a program of sulfurous oxide abatement2 in the northeastern United States and eastern Canada devoted to controlling ambient levels of pollution. North American acid rain is a multijurisdictional problem characterized technically by complex relationships between emissions of acid rain precursors and ambient pollution, involving bi-directional transboundary flows. The abatement of North American acid rain thus offers an opportunity to investigate the pursuit of efficiently implemented ambient levels of pollution in a multisource, multireceptor, multijurisdictional setting. A priori one would expect, in a setting like this, opportunities for possibly significant gains from joint action. But it has proved generally difficult to arrive at international agreements for the control of transboundary pollution. In particular, despite 20 years of effort, the UJnited States and Canada have been unable to conclude an agreement for the joint abatement of North American acid rain. The resulting inefficiencies have never been quantified, and the reasons for the inability to agree are not clear. The only accounts are anecdotal: they attribute the absence of agreement, said to be desired by Canada, to U.S. apprehensions that the costs of any coordinated solution * Department of Economics, Boston University, 270 Bay State Road, Boston, MA 02215. The author would like to thank the Public Finance seminar group at MIT, seminar participants at Boston University, the University of Michigan and the University of Virginia, and Peter Diamond, Jerry Hausman, Edgar Olsen, and James Poterba for helpful comments along the way. A special thanks to the three anonymous referees for their extremely constructive suggestions, and to T. S. Sims, L. G. Sims, and S. W. Salant for guidance throughout the paper. Financial support from the Center for Energy Policy Research for obtaining the data is gratefully acknowledged. Any errors are solely the author's. ' Program objectives would ideally be specified in terms of optimized levels of ambient pollution, which would require better data about the costs of environmental externalities than in general we currently have. We are, however, developing data with which we might pursue efficient attainment of exogenously specified ambient environmental objectives, taking into account the relationships among sources of emissions and resulting ambient conditions. That is what the study reported here is about. 2 Sulfurous and nitrous oxides are the two primary precursors to acid rain, but the former historically have been of greater concern, and I focus only on sulphurous oxide emissions here.

The most recent comprehensive examination of poverty measurement in the United States was conducted by the National Academy of Sciences (NAS) Panel on Poverty and Family Assistance (Constance F. Citro and Robert T. Michael, 1995). In their report, the Panel recommended changing the definition of both the poverty thresholds and the resources that are used to measure poverty. In this paper we implement a number of the Panel's basic procedures, with slight modifications, to obtain experimental poverty rates for 1991 to 1996.' This paper presents poverty estimates using thresholds derived from the 1989-1991 Consumer Expenditure Survey (CEX), and using family resources based on the 1991 panel of the Survey of Income and Program Participation (SIPP) and the March 1992 Current Population Survey (CPS). The resulting experimental poverty rates are compared to those based on the official measure. While most previous work has examined the new poverty measure exclusively using the CPS, this paper presents, for the first time, estimates from the SIPP, the survey that the Panel recommended should become the official source of poverty resource measurement. Additional estimates from the CPS from 1992-1996 are presented in order to examine the behavior of these experimental poverty rates over time. Our findings reveal that changes in the poverty rates based on the official and the experimental measures are similar over time. We show that poverty rates using SIPP data are below those using the CPS. We also show that using the experimental poverty measure yields a poverty population that looks more like the total population in terms of various demographic and socioeconomic characteristics than does the poverty population based on the current official measure.

Everyone recognizes substantial discrepancies between the public's rankings of hazards and those of the experts. For example, experts at the Environmental Protection Agency think that hazardous-waste sites pose mediumto-low risks to the public, while indoor air pollution poses a high risk; yet public perceptions have driven policy to focus on hazardous-waste sites rather than on indoor air quality (Stephen Breyer, 1993 pp. 19-20). beliefs should determine government policy when the public's beliefs differ from those of the experts? The problem evaporates if the public, perhaps recognizing its inability to deal with complex technical issues, entrusts risk assessment to the government and its experts. But what if the public, perhaps distrusting government and experts, is unwilling to leave risk assessment to the experts?' Paul Portney (1992 p. 131) posed a version of this Whose beliefs? question succinctly in his fable, Trouble in Happyville:

Unlike most other European countries the United Kingdom's pension system is not well described by an analysis of the social-security element. For 30 years or more, around half the workforce has been covered by private occupational pensions. Something like half of the income of pensioners comes from non-socialsecurity sources, and this proportion is growing. Of the workforce in the mid-1990's, 75 percent are contracted out of the secondtier State Earnings Related Pension Scheme (SERPS) into private occupational or personal pensions.' Partly as a result of these facts the United Kingdom also differs from many other countries in one other important respect: its state pension system is solvent. Tax rates necessary to pay for it are not predicted to rise despite the fact that the number of people over state retirement age is predicted to rise from 15.7 percent of the whole population to over 24 percent in 2050.2 In this paper we begin by describing the labor-market behavior of individuals around pension age. We also consider the coverage of the various parts of the social-security system. We go on to explain the structure of state pensions in the United Kingdom and compute the incentives for retirement that the structure creates, focusing on early retirement and the role of disability benefits, which are especially relevant for lower-skilled workers. We compare these incentives with those facing workers with private occupational schemes who now make up the mnajority of older workers close to retirement. The structure of incentives is found to match well with the observed patterns of labor-market participation in the data. L. The Labor-Market Behavior of Older Persons in the United Kingdom The labor-market behavior of older persons in the United Kingdom has been characterized by a severe fall in the participation of men. The rate of participation among recent cohorts falls sharply below 80 percent after the age of 50 and declines rapidly thereafter. In contrast the secular rise in the participation of women has resulted in a small upward trend in participation among women in the 55-60 age bracket, with participation rates approaching those for men

The U.S. government established a national weather organization in 1870. Changes in Great Lakes cargo and hull losses, and shipping rates from Chicago to Buffalo, provide evidence of the value of storm warnings on the Great Lakes. Nearly half of the Great Lakes storm-warning stations were closed during the fall of 1883 because of appropriations reductions. This exogenous shock permits the econometric estimation of the value of storm-warning locations on the Great Lakes. The results indicate that the social rate of return for weather expenditures during the Weather Bureau's founding period was at least 60 percent.