Work in progress
The relationship between environmental variability, risk preferences and institutional regimes for the extraction of renewable resources
Economics of climate gentrification
(with D. Kelly and C. Timmins)
Pricing strategic responses in real estate markets with Hedonic methods
(with D. Kelly and C. Timmins)
Species and fleet dynamics in ecosystem-based management
(with J.C. Villaseñor)
Whale dynamics and carbon sequestration potential
(with M. Savoca and J.C. Villaseñor)
Water market dynamics in the presence of environmental variability
(with A. Ayres)
Public preferences on engineered and nature-based coastal adaptation infrastructure
(with C. Dario and D. Kelly)
Adaptation Infrastructure and its Effects in Property Values in the Face of Climate Impacts
[Forthcoming at JAERE]
(with D. Kelly)
We evaluate the effect of climate adaptation infrastructure investments on property transaction prices, using data on over four hundred thousand property transactions and nearly two hundred adaptation infrastructure projects in the Miami-Dade county, an area that is highly vulnerable to sea level rise due to climate change. Exploiting the timing and sitting of different adaptation projects in the County, we are able to identify significant gains in property values after completion of adaptation infrastructure projects. These gains are concentrated in areas 0-200 meters from the boundary of the project polygon. Our results suggest an aggregate mean benefit net of adaptation cost of about $0.68 million per project, and almost $300 million in aggregate net benefits for all projects in our sample. Most projects generated positive net benefits, indicating that the vast majority of adaptation efforts are being placed in areas of need passing a benefit-cost test.
Global Effects of MPAs on Food are Unknown
[R&R at Nature Matters Arising]
(with D. Ovando, O. Liu, A. Parma and C. Szuwalski)
The Social Value of Predicting Hurricanes
(with I. Rudik) Link
Hurricanes are among the costliest natural disasters in the world, with a significant portion of their impact linked to whether forecasts can accurately predict hurricanes’ intensity and path. In this paper, we estimate the economic impacts of the official hurricane forecasts in the US and the value of improving them. We reconstruct county-level forecasts of storm track, wind speed, and precipitation for all major hurricanes in the US from 2005 to 2021, and we link them with data on hurricane damages and federal emergency expenditures to either protect or recover from hurricanes. We find that protective expenditures exponentially increase with the forecast wind speed and with the degree of uncertainty about the forecast. Correspondingly, we find that forecast errors are costly: underestimating wind speed can result in damages up to an order of magnitude larger than if the forecast had been accurate. Finally, we estimate the marginal social value of improving forecasts and find that for the average county, a reduction in forecast uncertainty by one standard deviation would reduce total protective expenditures and subsequent damages by over half a million dollars. This value is larger for higher-intensity storms or when conditions make forecasts more uncertain. Our results suggest that forecast improvements since 2009 have generated benefits that are orders of magnitude greater than the cumulative budget for operating and improving the hurricane forecast system.
Sharing and Expanding the Co-Benefits of Conservation
[R&R at Ecological Economics]
(with C. Costello and D. Kaffine)
Conservation actions typically focus on securing public goods, but they often also create private spillover co-benefits. For example, protecting open space may increase the values of adjacent properties and protecting a coral reef may increase fishing opportunities outside. These privately-captured co-benefits can be substantial, but are rarely tapped to help lower the overall cost of the original conservation intervention. One reason, we argue, is that doing so is difficult: While co-beneficiaries are easily convinced of the benefits of the conservation intervention, they are not obliged to pay for it, and so usually free-ride and enjoy these benefits gratis. We propose an approach called the Co-benefits Coordination Device (CCD), which allows the conservationist to capture some of these co-benefits. This approach can dramatically lower the cost of conservation while being incentive compatible for all parties involved, effectively allowing the co-benefits of conservation to be shared between the conservationist and co-beneficiaries. Under incomplete information – for example if the conservationist does not know the private co-benefits to adjacent landowners with certainty – the CCD can still lower the cost of conservation, but a trade-off emerges between reducing the cost of conservation and the risk of a conservation project not going forward. As this risk is tied to scientific uncertainty, our results highlight that reducing scientific uncertainty can benefit conservationists when they are bargaining with private property owners. We illustrate the use of this mechanism in a simple terrestrial wetlands conservation example and discuss its application in several other conservation settings.
The Economic Impact of Modern Piracy on Global Shipping
(with G. McDermott and G. McDonald)
Maritime transport has been historically susceptible to piracy. Rough assessments of the impact of modern piracy point to significant losses per year, with most encounters taking place in some of the most important shipping routes globally. In this paper, we unify the sparse theoretical literature with data available for both shipping voyages and pirate encounters to credibly assess the effect of piracy on the shipping industry. We explore theoretical insights to account for strategic behavior based on observed pirate encounters, then compile and analyze a unique geospatial dataset to test those insights. The dataset includes high spatial and temporal resolution information on pirate encounters, individual vessel tracks, and weather at sea. Our results establish the response of the shipping industry to pirate encounters, showing how the reported presence of pirates along a given route increases both the individual and aggregate cost of transportation, as well as its environmental impact, with major implications for the shipping industry at a global scale.
Pearson, H.C., Savoca, M.S., Costa, D.P., Lomas, M.W., Molina, R., Pershing, A.J., Smith, C.R., Villaseñor-Derbez, J.C., Wing, S.R. and Roman, J., 2022. Whales in the carbon cycle: can recovery remove carbon dioxide?. Trends in Ecology & Evolution [in Press]. Link
Coverage: Bloomberg CNN Washington Post Business Insider Fast Company
Wintergalen, E.W., Oyanedel, R., Villaseñor-Derbez, J.C., Fulton, S. and Molina, R., 2022. Opportunities and challenges for livelihood resilience in urban and rural Mexican small-scale fisheries. Ecology and Society, 27(3), p.46. Link
Molina, R., 2022. The lack of property rights can make natural disasters worse: The case of small-scale fisheries in Chile. Ecological Economics, 200, p.107540. Link
Liu, O.R. and Molina, R., 2021. The persistent transboundary problem in marine natural resource management. Frontiers in Marine Science, p.1292. Link
Molina, R., Letson, D., McNoldy, B., Mozumder, P. and Varkony, M., 2021. Striving for Improvement: The Perceived Value of Improving Hurricane Forecast Accuracy. Bulletin of the American Meteorological Society, 102(7), pp.E1408-E1423. Link
Ovando, D., Liu, O., Molina, R. and Szuwalski, C., 2021. Models of marine protected areas must explicitly address spatial dynamics. Proceedings of the National Academy of Sciences, 118(23), p.e2025958118. Link
Costello, C. and Molina, R., 2021. Transboundary marine protected areas. Resource and Energy Economics, 65, p.101239.
Palacios-Abrantes, J., Herrera-Correal, J., Rodríguez, S., Brunkow, J. and Molina, R., 2018. Evaluating the bio-economic performance of a Callo de hacha (Atrina maura, Atrina tuberculosa & Pinna rugosa) fishery restoration plan in La Paz, Mexico. PloS one, 13(12), p.e0209431. Link
Liu, O.R., Molina, R., Wilson, M. and Halpern, B.S., 2018. Global opportunities for mariculture development to promote human nutrition. PeerJ, 6, p.e4733. Link
Molina, R., Cerda, R., González, E. and Hurtado, F., 2012. Simulation model of the scallop (Argopecten purpuratus) farming in northern Chile: some applications in the decision making process. Latin American Journal of Aquatic Research, 40(3), pp.679-693. Link
Norambuena, R., González, E., Molina, R. & Gomez, A. 2017. Impacts of Climate Change on Marine Fisheries and Aquaculture in Chile (Chapter 10 – Aquaculture). In: Phillips, B. & Pérez, M. (eds) The Impacts of Climate Change on Fisheries and Aquaculture. John Wiley & Sons, Inc., Hoboken, NJ, USA.
González, E., Norambuena, R., Molina, R. & Thomas, F. 2013. Evaluación de potenciales impactos y reducción de la vulnerabilidad de la acuicultura al cambio climático en Chile [Potential Impacts and Reduction of the Aquaculture Vulnerability to Climate Change in Chile]. In: Cambio climático, pesca y acuicultura en América Latina: Potenciales impactos y desafíos para la adaptación. Taller FAO/Centro de investigación Oceanográfica en el Pacifico Sur Oriental (COPAS), Universidad de Concepción, Concepción, Chile. FAO Actas de Pesca y Acuicultura. No. 29. Roma, FAO, 275-335p. Link