Browsing by Author "Millock, Katrin"

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    Migration as an Adaptation Strategy to Weather Variability: An Instrumental Variables Probit Analysis
    (2016-06) Alem, Yonas; Maurel, Mathilde; Millock, Katrin; Dept. of Economics, University of Gothenburg
    There is solid scientific evidence predicting that a large part of the developing world will suffer a greater incidence of extreme weather events, which may increase the incidence of displacement migration. We draw on the new economics of migration to model migration decisions of smallholder and rain-dependent farm households in rural Ethiopia and investigate both the ex-ante and ex-post impacts of climate variables. Using detailed household survey panel data matched with rainfall data, we show that weather variability - measured by the coeffcient of variation of rainfall - has a strong positive impact on the probability of sending a migrant. This implies that households engage in migration to cope with risk ex-ante. We also find evidence suggesting that rainfall shocks have ex-post impact on households' likelihood of migration, but the effect is not statistically significant at the conventional levels. Instrumental variables probit regression results also show that controlling for endogeneity of income using a credible instrument is important to identify its impact on the decision to send a migrant. Our findings have important implications for policies aiming to improve the capacity of vulnerable households to adapt to climate change.
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    Using Ex Post Data to Estimate the Hurdle Rate of Abatement Investments - An Application to the Swedish Pulp and Paper Industry and Energy Sector
    (2007-03-21T14:56:51Z) Löfgren, Åsa; Millock, Katrin; Nauges, Céline
    We propose a method for estimating hurdle rates for firms’ investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The econometric procedure is illustrated using a panel of firms from the Swedish pulp and paper industry, and the energy and heating sector from 2000 to 2003. The results indicate a hurdle rate of investment of almost 3 in the pulp and paper industry and almost 4 in the energy and heating sector.