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Measuring sustainability under regime shift uncertainty: A resilience pricing approac
Beijer Institute, KVA.
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2010 (English)Report (Other academic)
Abstract [en]

This paper is concerned with the theory of resilience pricing and sustainability measurement in the presence of risk for regime shift in a dynamic economy-environment system. Following Holling (1973), we consider resilience as the maximal perturbation that the system can absorb without .ipping into a qualitatively di¤erent state. Using a multisector growth model under uncertainty, we derive the shadow price of resilience that a¤ects the probabilities of the system to flip in the future. We also analyze the role of resilience on sustainability with both ex-ante and ex-post welfare measures.

Place, publisher, year, edition, pages
Uppsala: Department of Economics, Uppsala University , 2010. , 20 p.
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2010:16
National Category
URN: urn:nbn:se:uu:diva-161801OAI: diva2:457405
Available from: 2011-11-17 Created: 2011-11-17 Last updated: 2011-11-17Bibliographically approved

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Li, Chuan-Zhong
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