Post on 24-Feb-2016
description
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Jeff LazoSocietal Impacts Program
WAS*ISAugust 13, 2008
Value of Weather Information and Weather Forecasts as Public Goods
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first apology to Edward Tufte
visual display of quantitative information
Challenger disaster and use of PowerPoint
second apology to Edward Tufte
never start a talk with an apology
Weather forecast . . . Pair of shoes . . .
What is a weather forecast?What is a weather forecast?
“Weather forecasting is the application of science and technology to predict the state of the atmosphere for a future time and a given location.”
What are the attributes of a forecast that create value?
What are the attributes of a forecast that determine how they are used and by whom?
What are the attributes of a forecast that determine who creates and supplies them?
Compared to a pair of shoes?
Public GoodsPublic Goods
Weather forecast characteristics• Rival: consumption by one consumer
prevents simultaneous consumption by other consumers
• Exclusive: whether or not it is possible to exclude people who have not paid for a good or service from consuming it
Public GoodsPublic GoodsWhat is the price (i.e., value) of weather
forecasts?
“Problems” of public goods• No observable price information• No provision by private markets
Weather forecasts as “quasi-public goods”?Is a weather forecast a market good?Is a weather forecast a use good?
Market FailuresMarket Failures
Public goods
Market power
Externalities
Information
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ec·o·nom·ics (ĕkec·o·nom·ics (ĕk ''ə-nŏm'ĭks, ēə-nŏm'ĭks, ē''kə-) kə-) n. n. Lionel RobbinsLionel Robbins 1932: "the science which 1932: "the science which
studies human behavior as a relation between studies human behavior as a relation between scarce means having alternative uses."scarce means having alternative uses."
study of the allocation of scarce resources in study of the allocation of scarce resources in light of unlimited wantslight of unlimited wants
Morss, Miller, et al.Morss, Miller, et al. Economics PrimerEconomics Primer Lazo – paper for Madrid conferenceLazo – paper for Madrid conference
EconomicsEconomics
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What is Value?What is Value?
Neoclassical versus other approaches?Neoclassical versus other approaches?
Economic values and societal impacts, e.g.,Economic values and societal impacts, e.g.,• lives savedlives saved• time savedtime saved• environmental valuesenvironmental values• impact on vulnerable populationsimpact on vulnerable populations
Why Value Forecasts?Why Value Forecasts?1.1. program justificationprogram justification
benefit analysisbenefit analysis
2.2. program evaluationprogram evaluation benefit-cost analysisbenefit-cost analysis
3.3. guidance for research investmentguidance for research investment any cases of true comparative analysis?any cases of true comparative analysis?
4.4. inform users of forecast benefitsinform users of forecast benefits5.5. developing end-to-end-to-end forecast and developing end-to-end-to-end forecast and
warning systemwarning system
What Should Be Valued?What Should Be Valued? Weather impactsWeather impacts
Dutton - $3T USDutton - $3T US ForecastsForecasts Improved forecastsImproved forecasts Research to improve forecastsResearch to improve forecasts How forecasts are usedHow forecasts are used
No information
Climatology Persistence Current information
Improved information
Perfect information
How Should It Be Valued?How Should It Be Valued?Forecasts
Value
Integrate forecasting and valuation- Meteorology- Economics
How Should It Be Valued?How Should It Be Valued?Weather
Observation
Forecast
Communication
Perception
Use
Value
Meteorology Risk communication
Marketing
Psychology Anthropology SociologyGeography Risk perceptions Economics
What else does economics What else does economics do?do?
Study of behavior
Problem definition“science in service to society”
Tradeoffs and decision making
Part of the overall weather forecast and warning system
StateStated d
ChoicChoicee