Journal of Environmental Economics and Management, Vol. 57, No. 1, pp. 21-44, 2008
Michael Greenstone and Ted Gayer, Journal of Environmental Economics and Management, Vol. 57, No. 1, pp. 21-44, 2008
This paper argues that an increased application of quasi-experimental and experimental techniques will improve understanding about core environmental economics questions. This argument is supported by a review of the limitations of associational evidence in assessing causal hypotheses. The paper also discusses the benefits of experiments and quasi-experiments, outlines some quasi-experimental methods, and highlights threats to their validity. It then illustrates the quasi-experimental method by assessing the validity of a quasi-experiment that aims to estimate the impact of the Endangered Species Act on property markets in North Carolina. The paper\'s larger argument is that greater application of experimental and quasi-experimental techniques can identify efficient policies that increase social welfare.