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Environmental and Resource Economics

, Volume 14, Issue 1, pp 75–94 | Cite as

Parameter Uncertainty in CGE Modeling of the Environmental Impacts of Economic Policies

  • David G. Abler
  • Adrián G. Rodríguez
  • James S. Shortle
Article

Abstract

This study explores the role of parameter uncertainty in CGE modeling of the environmental impacts of macroeconomic and sectoral policies, using Costa Rica as a case for study. A CGE model is constructed which includes eight environmental indicators covering deforestation, pesticides, overfishing, hazardous wastes, inorganic wastes, organic wastes, greenhouse gases, and air pollution. The parameters are treated as random variables drawn from prespecified distributions. Evaluation of each policy option consists of a Monte Carlo experiment. The impacts of the policy options on the environmental indicators are relatively robust to different parameter values, in spite of the wide range of parameter values employed.

CGE Costa Rica environmental indicators Monte Carlo parameter values trade policy uncertainty 

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Copyright information

© Kluwer Academic Publishers 1999

Authors and Affiliations

  • David G. Abler
    • 1
  • Adrián G. Rodríguez
    • 2
  • James S. Shortle
    • 1
  1. 1.Agricultural EconomicsPennsylvania State UniversityUniversity ParkUSA (e-mail
  2. 2.University of Costa RicaU. S. A

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