I am broadly interested in agri-environmental policies, natural resource economics, and environmental valuation. My current research projects include:
Flood your neighbors: Spillover effects of levee building.
Abstract: Economists have long acknowledged the problem of social cost and externalities. Without clear compensation for potential damage from extra risk exposure, self-protective actions taken by some agents may force other agents to increase their own protective actions through risk spillovers, a scenario often referred to as arms race. Levee building along the Mississippi River appears to be a case in point. To reduce flood risks, jurisdictions build levees to divert water flow which push extra water to downstream neighbors, causing downstream to build higher levees. This paper studies the spillover effects of levee building in response to rising flood risks using the Great Mississippi Flood of 2011 as a natural experiment. Using newly digitized data on levee locations and elevations, I show that a 1% increase in the upstream levee elevation increased the downstream levee elevation by 0.7%. A back-of-the-envelope calculation suggests the external costs due to upstream levee building are at least $0.2 billion, reducing the net benefits of heightened levees by 48%. A spatially explicit “levee tax” is proposed to address the externalities from upstream levee building. My results highlight the importance of regional cooperation to manage large-scale natural disasters while mitigating inter-jurisdictional spillovers.
Hot spots, cold feet, and warm glow: Identifying spatial heterogeneity in willingness to pay. NCEE Working Paper 20-01. (with Dennis Guignet and Christopher Moore) [paper available here]
Abstract: We propose a novel extension of existing semi-parametric approaches to examine spatial patterns of willingness to pay (WTP) and status quo effects, including tests for global spatial autocorrelation, spatial interpolation techniques, and local hotspot analysis. We are the first to formally account for the fact that observed WTP values are estimates, and to incorporate the statistical precision of those estimates into our spatial analyses. We demonstrate our two-step methodology using data from a stated preference survey that elicited values for improvements in water quality in the Chesapeake Bay and lakes in the surrounding watershed. Our methodology offers a flexible way to identify potential spatial patterns of welfare impacts, with the ultimate goal of facilitating more accurate benefit-cost and distributional analyses, both in terms of defining the appropriate extent of the market and in interpolating values within that market.
Outside of economics, I am interested in various land-use and urban policies using geographical information systems (GIS) and spatial modeling. Please click the links below for more details of my past research.
Haoluan Wang 