1. The government is contemplating to implement actions to prevent climate change. If no action is taken then climate change will happen with a probability of 33%. There is a probability of 100%-33% that there will be no climate change. We will not be able to tell if there is climate change until 79 years from today. In 79 years, we will know if there is climate change but it would be too late to do anything about it if climate change takes place. If there is climate change, then the world will suffer a loss of $17902 a year forever starting in year 79 1. Scientists say that we can prevent climate change for sure by reducing emissions of CO2 in year 6. The cost of reducing emissions is $222 every year forever starting in year 6 1. Assuming the discount rate is 12.7%, what is the expected value of preventing climate change? (hint: your answer should be a negative number).

2. The government is contemplating to implement actions to prevent climate change.

If no action is taken then climate change will happen with a probability of 72%. There is a probability of 100%-72% that there will be no climate change. We will not be able to tell if there is climate change until 53 years from today.

In 53 years, we will know if there is climate change but it would be too late to do anything about it if climate change takes place. If there is climate change, then the world will suffer a loss of $42746 a year forever starting in year 53 +1.

Scientists say that we can prevent climate change for sure by reducing emissions of CO2 in year 5. The cost of reducing emissions is $761 every year forever starting in year 5 +1.

Assuming the discount rate is 8.1%, what is the expected value doing nothing against climate change minus the expected value of preventing climate change? (hint: this number can be positive or negative)

3. Imagine that the government imposes a regulation to improve air quality. However, there will be no benefits of this policy from today to the next nine years. From year ten and onward the benefits are calculated at $40362 every year after that.

What is the present value of the benefits assuming that the discount rate is 29%?

4. SHSU is considering installing a pedestrian walkway that would cost $94988. The walkway is expected to reduce the risk of fatality from 16.2% to 4.8%. What is the minimum VSL that would make SHSU install the walkway?

5. You are working for SHSU and they tell you that 43,000 employees face a 1/93 probability of death at work because their work at the physical plant each of them receives a yearly wage of $52,000. On the other hand, 43,000 maintenance workers face 1/469 probability of death because of their work, each maintenance worker gets paid $31,000. Assume that both kinds of job require the same level of skills, effort and that all workers have the same preferences and tastes. Using this information, what would be the value of a statistical life of SHSU workers?

6. If Maria's option value to save the Bald Eagle is $131, her willingness to pay is $410, and the non-use value is $76, what would be Maria's use value to save the Bald Eagle?

7. Imagine you are doing a hedonic analysis of different types of pollution and housing values. You have the following equation: Housing Value = B0 + B1 Rooms + B2 Distance to the city center + B3 Age of the housing unit + B4 Lot Size + B5 Traffic Noise + B6 Concentrations of PM5 + B7 Construction Size + B8 Baths Rooms = number of room of the house Distance to the city center = miles to the city center Age of housing unit = age in years of the house Lot size = square footage of the lot where the house is located Traffic Noise = NEF units of noise Concentrations of PM5 = amount of PM5 ppm Construction size = square footage of the construction Baths = number of baths in the house Where B0=24452; B1=20; B2=-55; B3=-11; B4=12; B5=-66; B6=-49; B7=58; B8=88 According to this information if amount of PM5 concentrations decreases by 199 units, what would be the change in the value of the house? (if the values of the house increases entere the number as positive if it decreases enter it as negative)

8. Imagine you are doing a hedonic analysis of different types of pollution and housing values. You have the following equation: Housing Value = B0 + B1 Rooms + B2 Distance to the city center + B3 Age of the housing unit + B4 Lot Size + B5 Traffic Noise + B6 Concentrations of PM5 + B7 Construction Size + B8 Baths Rooms = number of room of the house Distance to the city center = miles to the city center Age of housing unit = age in years of the house Lot size = square footage of the lot where the house is located Traffic Noise = NEF units of noise Concentrations of PM5 = amount of PM5 ppm Construction size = square footage of the construction Baths = number of baths in the house Where B0=27896; B1=45; B2=-23; B3=-44; B4=89; B5=-71; B6=-21; B7=11; B8=44 According to this information if amount of noise decreases by 40 units, what would be the change in the value of the house? (if the values of the house increases entere the number as positive if it decreases enter it as negative)

9. The government is considering to implement a water pollution control measure that will cost $8058821. The benefits of the policy will depend on the amount of rain that might fall on the city. There are two possible scenarios: high rain and low rain.

The probability of high rain is 20% and if there is high rain the benefits of the water pollution measure are $5043935.

The probabilityof low rain is 100%-20% and if there islowrain thebenefits of the waterpollution measure are $6609625.

What are the expected benefits of this water pollution policy?