Publications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Teaching Opportunity Cost in an Emissions Permit Experiment
University of Virginia.
University of California, Berkeley.
IVL Swedish Environmental Institute.
Resources for the Future.
Show others and affiliations
2010 (English)In: International Review of Economic Education, ISSN 1477-3880, Vol. 9, no 2, 34-42 p.Article in journal (Refereed) Published
Abstract [en]

This paper describes an individual choice experiment that can be used to teach students how to correctly account for opportunity costs in production decisions. Students play the role of producers that require a fuel input and an emissions permit for production. Given fixed market prices, they make production quantity decisions based on their costs. Permits have a constant price throughout the experiment.

In one treatment, students have to purchase both a fuel input and an emissions permit for each production unit. In a second treatment, they receive permits for free and any unused permits are sold on their behalf at the permit price. If students correctly incorporate opportunity costs, they will have the same supply function in both treatments. This experiment motivates classroom discussion of opportunity costs and emission permit allocation under cap and trade schemes. The European Union Emissions Trading Scheme (EU ETS) provides a relevant example for classroom discussion, as industry earned significant 'windfall profits' from free allocation of emissions permits in the early phases of the program.

Place, publisher, year, edition, pages
2010. Vol. 9, no 2, 34-42 p.
Keyword [en]
Education, Economics, Emission, Trade, Decision process
National Category
Economics Pedagogy
Research subject
10 Road: Transport, society, policy and planning, 15 Road: Environment
Identifiers
URN: urn:nbn:se:vti:diva-351OAI: oai:DiVA.org:vti-351DiVA: diva2:667011
Available from: 2013-11-25 Created: 2013-11-25 Last updated: 2016-09-01Bibliographically approved

Open Access in DiVA

No full text

Other links

PDF

Search in DiVA

By author/editor
Mandell, Svante
By organisation
Transport economics Stockholm
In the same journal
International Review of Economic Education
EconomicsPedagogy

Search outside of DiVA

GoogleGoogle Scholar

Total: 20 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf