Economic activity produces good and bad outputs. Whilst good output enhances quality of life, bad outputs generate negative externalities. Negative externalities can arise from, for example, pollution, noise and environmental degradation. Such production systems are inefficient, but continue to endure despite the costs.
Economists (and social scientists) have begun to develop socio-economic models and use valuation techniques to understand the socio-economic issues related to negative externalities. However, such work remains scattered and the existing literature reveals that modelling techniques can be further enhanced to capture the magnitude of these externalities better. Data limitations also present problems in undertaking relevant econometric modelling.
The main objective of this project is to undertake a systematic review of economic models that are available and the types of models that have been used to capture the costs of negative externalities. This will identify the main research gaps in the modelling literature and identify data constraints when formulating future research projects. A good understanding of the relevant research could also be used to undertake a meta-analysis of the studies that have already been undertaken. A survey of the literature of negative externality modelling will also help in formulating relevant public policy to internalise negative externalities.
The student will learn how to organize ideas into a draft paper that contains different arguments for and against the ideas.The work will be published as a literature survey in an economics journal. Skills employed are:
- Using a research database
- sorting materials for a focused research project
- thinking critically
- writing following a structure
- undertaking a literature review.
Contact the supervisor for more information.