follow the feedback and guide to get high points. do not change the main idea. you can add new information, but you also need the reference. And mark the special color on the new text you added.
FINALTERM PAPER
The simplest rule is to look at a sample of papers in our course reading list outline as guide for the components of a good paper.
1. Introduction: contains relevance of the paper, research objectives, hypothesis
2. Literature review: a narrative, not an annotated bibliography of the relevant literature
There needs to a be clear relationship between your research objectives and literature cited
You need to identify what the literature has done, and existing gaps that you will address
3. Data: If doing an empirical paper or extension of any labs or empirical paper:
What data and variables you will use to answer your objectives
How each variable attempts to proxy for what exactly you want to measure
You may use variables used in class but I will be providing extra variables
Clearly, if you use new variables, that adds value to your paper, inching you closer to A!
4. Methods: discussion of what you did: empirical analysis, comparative qualitative analysis, critical review and assessment with details on criteria used for assessment, etc
5. Results: summarize results in Table (If extending labs: see the papers we used in class as model) and how tabulated results are discussed
6. Analysis: check empirical papers we discussed in class on how to discuss results and analysis
7. Conclusions
8. References
If the final paper has to be an extension and improved version of the labs, there needs to be substantial additional content and analysis. If there is hardly any difference in the content between any of our labs and your paper, you get a zero in the final paper.
ASSESSEMENT INSTRUMENT FOR FINAL TERM PAPER
1
BEHAVORIAL ECONOMICS AND ENVIRONMENTAL POLICIES 15
Behavioral Economics and Environmental Policies
Abstract
Behavioral economics (BE) has increasingly attracted more interest in the field of economics. Unlike the conventional economic theory, BE focuses on people having cognitive limitations, which makes them arrive at irrational decisions. BE changes environmental economics because it helps policymakers to understand why people and institutions take part in unhealthy environmental behaviours. This way, they develop the required policies to help with environmental regulation after understanding their motivations. BE also states that people act in a social context, and issues, including status and social approval, are critical to human behaviour. Another critical feature of BE is that people’s behaviour is not motivated only by their material payoffs. Understanding BE is vital because the decision-making process is understood better, alongside providing the possibility of creating value propositions.
Keywords: Behavioral economics, material payoffs, environmental policy
The abstract should contain explicit statement about your research questions
Introduction
Behavioral economies (BE) refers to the study of psychology and the way it connects with the institutions and people’s decision-making processes. In an ideal universe, people arrive at optimal decisions that offer the greatest satisfaction and benefit. Whenever humans are offered with various options, they choose the one that helps them to achieve personal satisfaction. According to the rational choice theory, people make rational decisions by assessing the benefits and costs of every available alternative. BE uses economics and psychology to understand the reasons for irrational decisions among people, and how or why their behaviour does not use the economic models. BE has been used to solve environmental issues because it helps policymakers to understand why people and institutions engage in unhealthy practices. BE is related to the ideas of environmental economics. [The next sentences is unrelated to the ideas in the preceding sentences. You still have not explicly stated by BE s important for environmental policy and then you already start discussing experiments again without proper context] Experiments offer reasonably low cost and powerful methods of examining conventional issues affecting environmental policy. In the last thirty years, laboratory experiments were supported by the available high-quality information needed for assessing policy initiatives in the environmental area. Various critical information from this work area was obtained, in different areas, including complying with environmental regulations and the need for specific trading features in the environmental markets. [This next sentence should be stated earlier. Otherwise, all you have been saying so far has no meaning, as they have no context] This study explores the contributions of BE in the protection of the environment, and provides policy recommendations for governments to enact on.
Literature Review
A lot of the environmental goods and services, including rainforests, resource management, and fisheries, have elements linked with public goods and a shared pool of resources. While the pure public goods are defined by the non-rivalry and non-excludability in consumption. Various environmental public goods are regarded as impure public goods. These goods are not directly rivalrous, but the challenges of excluding people from utilizing these resources, and that consuming resource reduces its availability to other people, suggests that those who use resources encounter a social dilemma (Carlsson & Johansson-Stenman, 2012). Plans have been recommended for mitigating these issues, and some have emphasized on external interventions from the regulators while others advocate for community-led initiatives. According to Elinor Ostrom, if communities can design their usage schemes, enforce rules they form, and organist themselves, then self-governance and collective action are successful towards minimizing the effects of the social dilemmas.
I do not understand how the previous paragraph is related to your research question. You need to explicitly state the relevance of your statements. None of them are wrong, they just have no context and seem unelated to what the paper is about
[This next sentences seems to me the contextual sentence for the previous paragraph] Policymakers in the community and central levels have used various initiatives towards improving the use of community resources. Some of the use of resources emphasize on a regulatory or formal approach and use financial incentives such as penalties, audits, taxes, and subsidies for motivating people to use resources in socially optimal ways. Other approaches have focused on evoking intrinsic motivations for those who use the resources. [This next sentences seems to me a good introductory sentence for experiments that will link previous ideas to experiments] Interactions between informal and formal schemes are necessary for examination, and the field setting is an ideal environment for exploring the substitutability and complementarily between the approaches. Chen (2016) carried out an experiment in Colombia among a group of fishermen who were using regulatory and informal methods to help them cooperate with the environment in meaningful ways. The experiments were framed as a situation where every fisherman decided on whether or not to clean piers and beaches. Ensuring the beaches are clean prevents lobster migration, and this makes it beneficial for everyone involved. Chen (2016) also examined the effects of non-regulatory and non-monetary incentives on the pro-social behaviours the related to conserving the environment by using experiments with groundwater and forest resources in Bolivia. The more socially connected people make significant contributions. Therefore, non-regulatory and non-monetary incentives produce various types of motivation crowding-out impacts.
[There is no context for this next paragraph either. Why is Pigou and his work important in analyzing role of BE in environmental policy? You need to link this paragraph to the ideas of the preceding paragraphs of your litteview section] In the traditional frameworks, the Pigovian regulation establishes corrective subsidy or tax to ensure agents understand the external impacts linked with production or consumption decisions. The market-based techniques, especially Pigovian regulation, make consumers understand the external impacts linked with their decisions. Regardless, when there are behavioral agents that frame changes in prices, it could backfire. Ek & Miliute-Plepiene (2018) state that the Pigovian tax is examined against businesses or private individuals for taking part in a task that causes negative impacts for the community. The adverse side impacts are costs that are not part of the market price of the product. These include aspects such as strains on public healthcare from selling tobacco products, environmental pollution, and related side impacts that cause negative, external influence. Economists claim that the costs from the negative externalities, including pollution to the environment, are caused by society and not the producers. The Pigovian tax seeks to discourage actions that impose costs of production to third parties and the community entirely. Pigou claimed that the negative externalities prevented a market economy from attaining equilibrium whenever the manufacturers fail to factor all the production costs (Ek & Miliute-Plepiene, 2018). The adverse impacts are correctable through levying taxes that are equal to the externalized costs. In an ideal situation, the taxes are equivalent to the external damage that is caused by the manufacturers, and this reduces the external costs. BE is shown through the Pigovian tax style, especially on pollution.[I do not understand how Pigouvian tax relates to BE. Pigouvian tradition is very conventional econ. So far there is nothing BE in the discussion of Piguo here]
Method
This research was conducted using a qualitative approach to obtain an understanding of the reasons, motivations, and opinions why people and institutions engage in environmental pollution. This method was chosen because it helps us to have insights about the issue of environmental protection. We used this research method to uncover the trends in opinions and thoughts about environmental protection, and to delve deeper into the issue. Some of the research methods we used included semi-structured questions for the surveys. [Did you interview people? This is news to me. If you did, you need to include your survey instrument (questionnaire) and you need to discuss how each question is used to answer your research questions] We chose respondents based on the issues we wanted to analysed, and compared the practices used by countries such as Sweden for environmental protection. Most importantly, this research adhered to the ethical guidelines for social research because it was proven by the Ethics Committee. [What ethics committee? I don’t understand. Did you have to go through the board to get permission to do a survey? If not, this section can simply state that you reviewed the literature and provided a critical assessment of the arguments for and against BE for use in environmental policy. That means I will be looking for that critical assessment. The litreview and paraphrasing of other people’s work will not suffice. You need t show WHAT YOU CONTIRBUTED]
Results
Contributions of the Framed Field Experiments
The experimental method has been vital in the protection of the environment. [How? You need to state exactly how and why experimental method has been vital for environmental protection , not just provide examples like you do right now. That is not enough. Do not leave it to the reader to deduce that the experiments mean and how they are relevant. You need to state the idea that those papers/ experiments gave rise to help you answer your research questions] During the 1970s, scientists, including Molina, Rowland, and Crutzen, showed that chlorofluorocarbon (CFC) gases that are used in plastic foams spray bottles, and refrigerators affect the ozone layer. While their ideas were founded on theoretically understanding the modeling methods and chemical processes, the experiments identified and measured the causal effects of CFC on the depletion of the ozone layer (Carlsson & Johansson-Stenman, 2012). Causal understanding obtained from experiments is not limited to the chemical processes alone. There is also increased dependence on experiments that involve human beings towards developing new medicine and better decision-making theories. In recent years, environmental economists have used the experimental method for generating knowledge about different behaviours that affect the environment, including standard pool extraction, pollution, and the conservation of energy. Scholars have used the natural settings of decision-makers, inviting them to participate in their experiments. The innovative technology has given them the room for examining behavioural patterns in natural resources and environmental users in the field. [This section needs a concluding statement… therefore… Based from these experiments, BE can contribute to environmental policy by XXXXXX. Then you need to explain some more and develop the argument. That is your contribution not just summarizing the literature. That is where the bulk of your writing should be devoted to. This comment holds for all other sections below.]
What are the Roles of the Pigovian Regulations?
A factory causes pollution and thereby leads to negative externalities because the affected third parties bear part of production costs from the pollution. This cost is shown through health risks or contaminated property. The polluting factory only considers the private costs and not the external costs. Pigou always believed that the interventions of the state must correct the negative externalities, which is believed to be a market failure. Notwithstanding the criticism of the theories of Pigou, the Pigovian taxes are standard in modern-day society. An example of a Pigovian tax is the tax on carbon emissions. The governments have imposed a carbon emissions tax on any organization burning fossil fuels. When burned, fossil fuel produces greenhouse gases that lead to global warming and also damages the planet in various ways. The carbon tax seeks to consider the actual costs of burning fossil fuels. The end game of the carbon tax is ensuring that manufacturers of the carbon products are those who incur the external costs. An example of another Pigovian tax that is commonly used in Europe is the tax levied on plastic bags and paper bags. This has encouraged consumers to bring their reusable bags from home to prevent using plastic or paper. Plastic is an example of burning fossil fuels that cause damages to marine life, while paper bags promote deforestation. All of these examples of products lead to negative externality, whose prices fail to consider the costs incurred by society. The executed taxes are measures for redistributing costs to the manufacturers and users that produce these negative externalities. [There is nothing BE here about the Pigouvian tradition. Nothing new.]
How does BE helps to protect the Environment?
The effectiveness of BE in environmental protection can be explained through the conventional economic theory. [If it can be explained by conventional econ theory, then why study BE at all? What is the relevance of this study?] This is obtained from the standard doctrine, where a person has to pay the lowest possible taxes and wages, charge the highest rents and prices, and not give away anything unless the gift provides compensatory advantages. Through the environmental policies, four aspects are realized using the conventional economic theory, including sustained growth of the economy that is measured relative to the gross national product. The free markets that are not restricted by the government generally lead to the most effective and socially maximum resource allocation. Economic globalization is also caused by conventional economic theories, including the removal of barriers to the free goods flow and money in all places in the world, increasing economic effectiveness, creating employment opportunities, and increasing the choices for consumers. To this end, the primary duty the government is offering the necessary infrastructure for advancing and enforcing the rule of law according to contracts and property rights. Consumption of energy leads to global and domestic externalities shown through carbon emissions and air pollution, while using water reduces the available water for environmental flows, and leads to possible scarcity for future generations. There is a substantial duty for economists to determine public policy because organizations supplying water and energy to the homes are heavily regulated and public monopolies.[Nothing related to BE in this paragraph.]
A major theme is that for these markets, extrinsic and intrinsic motivations guide the final decisions about consumption. Not only do households conserve water and energy to minimize bills but also receive utility from the altruism or warm glow linked with conservation. These dual sets of motivations have opened up policies that go beyond the traditional economic incentivization, such as subsidies and prices, to tap into the moral or social motivations for reducing the consumption of resources. The availability of various incentives has added complexity to the environment of choice and making field experiments the best steps towards disentangling the causal methods that determine the behaviour of consumers. [How exactly? You need to elaborate more on how and why field experiments can help and more importantly how they can overcome the shortcomings you mentioned: bounded rationality/cognitive limitations, lack of intrinsic motivation, etc. You need to apply the BE concepts and then demonstrate how the tool you identify (field experiments) and these concepts can help environmental policy over and beyond what conventional econ can do. You mentioned a lot of concepts in your proposal but they never made their way into the annotated bibliography or here in this draft. That is surprising because you should build from each stage that I am requiring to help you write the paper] Economist has also advocated for the monetary incentives for correcting the failures within the market, including the externalities. Regardless, there is a lacking political will or concern about equity that restricts the use of financial incentives for promoting the conservation of resources. The political reality has coincided with the increased use of applied BE that has used the changes in information or architecture for modification of consumer behaviour without making significant price changes. [There is sudden introduction of the notion of “political will” but so far unrelated to the rest]
A crucial tool for reducing the energy in households and consumption of water is the social comparison. The social comparison tools are made up of information that is sent to clients to compare their energy or water use to that of the peer group. The social comparisons have led to essential treatment impacts that are efficient compared to information-based approaches, including the conservation tips. Alongside understanding the kinds of households responding to the social comparisons, the kinds of actions taken by consumers also offer insight into the methods that lead to the conservation of resources. The possible improvements in welfare from the more investments in the efficiency of energy, alongside proof that show that social norm comparisons minimize consumption but discourage new investments, have led to the use of technology in environmental protection. The standard neoclassical model argues that people take part in environmentally pro-social behaviours, including useful public contributions, lower harvesting of the pool resources, and energy conservation only when they have the extrinsic motivation of doing so. Therefore, they contribute nothing to the public good, ignore the impact of extraction of resources on other people, and are not affected by the data about energy use. Interactions of social and financial interventions with the intrinsic behavioral norms is an area of study that bears fruits. While a lot of work has been executed to understand various motivations behind conservation, a lot still needs to be done to understand the interactions of these effects.
A Case Study of Food-waste Collections in Swedish Municipalities. [This is good. You need more concepts like these and how experiments have shown that they work and what they imply for environmental policy. I suggest that for all BE concepts you listed in the proposal you define each one, provide and example of how they were examined or tested in a field experiment, summarize the result and the lessons from the experiment ten discuss how those lessons help environmental policy beyond what conventional econ does.]
The evaluations of the environmental policy must cover all the appropriate effects. The most important aspect is the future benefits and costs that are directly linked with the policy. This answers the question: Does the policy have the desired impact on the environmental variable of concern? Are there any direct costs or factors from the spillover effects? These are some of the mediated issues by financial incentives. Sweden has implemented a policy that encourages households into recycling a particular waste faction that affects readiness for recycling other waste fractions in the process. The Swedish government, in 2003, implemented a national target that by 2010, they would undergo biological treatment of around 33% of the food waste that is produced from restaurants, households, grocery stores, and catering facilities. The goal of the target was reducing waste incineration. While the goal was not met, the Swedish government refined and updated the target in 2012 (Kesternich, Reif & Rübbelke, 2017). The implementation of the policies for biological treatment happened at the local levels, where the municipalities operate waste management through a private or public contractor or directly.
By 2015, two-thirds of the Swedish municipalities have initiated systems for source separation from the food waste. Food waste is gathered from schools and restaurants. The Swedish government uses two different techniques for separating wastes from household foods from the residual wastes. The first system is where residual and food wastes are placed in various containers. In the other method, there is only one garbage container in use. However, the food and residual wastes are still separated, either into various colored bags or compartments that are subjected to automatic optical storing in a specialized facility. All the food waste that is collected is incinerated. In almost half of the municipalities collecting food waste, the households must participate. Where there is voluntary sorting, the economic incentives, including the lower waste rates for the homes that participate, are used for inducing households to get involved. Besides, municipalities have monitored the sorting initiatives to an extent, but the monitoring at household levels is not possible for multi-family housing, where the wastes have been deposited unanimously. Different methods are used for ensuring compliance. For example, single-family households are informed through mail or telephone that the sorting impacts are not satisfactory. This way, BE is crucial for environmental protection in Sweden.
[There is only one example and once concept – social comparison that is discussed at length. There should be more. One for each of the concepts you listed in the proposal.]
Conclusion
As shown, BE focuses on people having cognitive limitations, which makes them arrive at irrational decisions. Policymakers in the community and central levels have used various initiatives towards improving the use of community resources. Consumers also make decisions relying on the contributions to protecting the environment to realize the best benefits for the environment. To this end, environmental economists have used the experimental method for generating knowledge about different behaviours that affect the environment, including standard pool extraction, pollution, and the conservation of energy. Economists claim that the costs from the negative externalities, including pollution to the environment, are caused by society and not the producers. Some of the applied approaches include the Pigovian tax that discourages actions that impose costs of production to third parties and the community entirely. An example of Sweden shows how BE is used in daily practice, where it has implemented a policy that encourages households into recycling a particular waste faction that affects readiness for recycling other waste fractions in the process. On the same note, social comparisons have led to essential treatment impacts that are efficient compared to information-based approaches, including the conservation tips. This study provides policy recommendations for countries that have not realized success with better control over their environments.
[So far since the evidence presented about BE is thin, the conclusion is of course thin. You only have mentioned social comparison and extrinsic motivation and public contribution, but these concepts were not coherently discussed. It was challenging to read and it took me 14 pages to figure out that these are the 3 concepts you have There may be more that I missed but the exposition is not very clear and there is lack of lead sentences and conclusion sentences in the paragraphs. The paragraphs are also not strung along together very well. Both content and writing need a lot of work. It is still a high D or a low C. Evidence is not clearly presented and seem thin, the arguments were not very clearly stated and I had to be inferred from 14 pages, the synthesis is lacking]
Directions for Future Research
The levels of specificity at times makes it challenging to compare findings from one point to another. To have a detailed understanding of the environmental policies that work in various environments, it is necessary to combine and contrast the insight provided from the field experiments in environmental economics. Future studies should focus on understanding the connection between the field and theory is a critical consideration in environmental economics, where consumers have responded to the traditional economic incentives. Consumers also make decisions relying on the contributions to protecting the environment to realize the best benefits for the environment. Depending on the environment and context, individuals and organizations produce various volumes of pollution, use excessive water or energy, and even misreport their emissions or usage.
References
Brent, D. A., Friesen, L., Gangadharan, L., & Leibbrandt, A. (2017). Behavioral insights from field experiments in environmental economics. International Review of Environmental and Resource Economics, 10(2), 95-143.
Carlsson, F., & Johansson-Stenman, O. (2012). Behavioral economics and environmental policy. Annu. Rev. Resour. Econ., 4(1), 75-99.
Chen, J. M. (2016). Fables of the Reconstruction: Human Emotion and Behavioral Heuristics in Environmental Economics. Studia Iuridica, (63), 77-96.
Ek, C., & Miliute-Plepiene, J. (2018). Behavioral spillovers from food-waste collection in Swedish municipalities. Journal of Environmental Economics and Management, 89, 168-186.
Kesternich, M., Reif, C., & Rübbelke, D. (2017). Recent trends in behavioral environmental economics. Environmental and Resource Economics, 67(3), 403-411.
Lanz, B., Wurlod, J. D., Panzone, L., & Swanson, T. (2018). The behavioral effect of pigovian regulation: Evidence from a field experiment. Journal of Environmental Economics and Management, 87, 190-205.
List, J. A., & Price, M. K. (2016). The use of field experiments in environmental and resource economics. Review of Environmental Economics and Policy, 10(2), 206-225.
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