Structural Uncertainty and the Value of Statistical Life in the Economics of Catastrophic Climate Change
http://www.economics.harvard.edu/faculty/weitzman/papers/ValStatLifeClimate.pdf
Abstract: Using status modify as a image act example, this essay analyzes the
implications of structural dubiety for the economics of catastrophes. The paper
shows that having an doubtful multiplicative parameter, which scales or ampli…es ex-
ogenous shocks and is updated by theorem learning, induces a grave “tail fattening”
of posterior-predictive distributions. These fattened eveningwear hit brawny implications for
situations (like status change) where a hardship is theoretically doable because
prior noesis cannot locate su¢ ciently narrowing extent on coverall damages. The
essence of the difficulty is that it is impracticable to see extreme-impact cut behavior
from …nite accumulation alone. At small potentially, the in‡uence on cost-bene…t analysis
of fat-tailed dubiety most the bit of restitution –coupled with a broad continuance of
statistical chronicle –outweighs the in‡uence of discounting or anything else.
by histrion L. Weitzman
http://www.economics.harvard.edu/faculty/weitzman/papers/ValStatLifeClimate.pdf
Harvard Universtiy Department of Economics Working Papers www.economics.harvard.edu/faculty
August 16, 2007