eVNIROMENTAL eCON

ECO 605: Module Two Case Study Guidelines and Rubric

Overview: The case studies in this course are designed to actively involve you in environmental economics reasoning and to help you apply the course principles to complex real-world situations. In the case studies, you will use data analysis to make informed recommendations and communicate in a professional manner.

The Module Two Case Study focuses on an organization’s willingness to pay in terms of environmental impacts. In your submission, you will demonstrate the following skills:

1. Enter given data and create charts in Excel (or similar spreadsheet tool). 2. Generate graphs and tables using data. 3. Incorporate into your analysis recommendations that are designed to reduce pollution. Provide information on oil companies’ willingness

to pay and incentive-based (IB) policies, transferable discharge licenses (TDP), and similar programs that are designed to reduce pollution. Write a short summary to a target audience of policy makers with the use of data and research from the textbook, the textbook website, and the Shapiro Library.

Prompt: In this case study, you will use data, graphs, and tables to analyze an organization’s willingness to pay. The following headline is a reaction to the 2010 Gulf oil spill:

Oil Spill in the Gulf: Recommend Act to Raise Fines

This case study examines two fictitious oil companies: Brand Petrol and American Oil. These companies have released data on how much they are willing to pay in fines. The assumption is that most oil spills are accidents. Yet to prevent oil spills, companies need to put into place resources (a safe environment, training, rules, and so on) to prevent oil spill accidents. This case study narrows the oil spill focus to fines imposed as a means to deter oil spill accidents. You will be provided with data that you will analyze in order to make recommendations for policy makers by using the principles of marginal willingness to pay.

Take the following steps to complete this case study:

1. Enter the data from the table below into a spreadsheet. Label the worksheet “Marginal Willingness to Pay (WTP).”

Marginal Willingness to Pay (WTP) (cost per incident x $100,000)

Level of Incidents Tolerated

Brand Petrol

American Oil

0 5.00 6.40 1 4.00 5.20 2 3.20 4.00 3 2.60 3.00 4 2.20 2.10 5 1.80 1.30 6 1.50 0.60 7 1.30 0.30 8 1.20 0.00

2. Generate a line graph or bar graph from the data and add a trend line to the graph. Make sure the following labels are included:

a) Marginal Willingness to Pay b) Cost per Incident c) Level of Incidents Tolerated d) Brand Petrol e) American Oil

3. Create and fill in a new table to sum up the quantities of incidents tolerated by the companies for oil spills. Below is a table with starter data entered.

Price (in Millions)

Quantity Brand Petrol

American Oil Total

$7 0 0 0 $6 1 $5 $4 $3 4 $2 5 $1

4. Construct the aggregate marginal willingness to pay demand curve by graphing this new data into a line graph. Make sure the following labels are properly added:

a) Price (in Millions) b) Quantity c) Brand Oil d) American Oil e) Total

5. Write a one-page paper on your analysis and make recommendations designed to reduce pollution—for example, incentive-based (IB) policies, transferable discharge licenses (TDP), and similar programs. Write to influence policy makers with the use of the data in the tables and graphs. Focus your writing on a target audience of policy makers or those who influence policymakers.

Guidelines for Submission: The case study must follow these formatting guidelines: double spacing, 12-point Times New Roman font, one-inch margins, and APA citations. Your submission should be one to two pages in length (not including cover page and references).

Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Entering the Data Submission meets “Proficient”

and extends with compelling analysis or formulas

Enters the data into a spreadsheet; labels the worksheet correctly to complete this part of the case study

Attempts to enter the data into the spreadsheet, but two or more of the answers are incorrect

There is no data or labels to identify the marginal willingness to pay

15

Line Graph or Bar Graph

Meets “Proficient” criteria and extends the analysis of marginal willingness to pay through the use of the graph

Generates a line graph or bar graph with a trend line to analyze the marginal willingness to pay data and has all the required labels

Attempts to present a line graph or bar graph with trend line and proper label but has left out a required step or incorrectly identifies the source of the data

There is missing data, and the line graph or bar graph is not correctly used or labeled

15

New Table Meets “Proficient” criteria and extends the sums of the data by using a program such as Excel for both companies to enhance the analysis

Creates a new table of data that correctly sums up the quantities of incidents tolerated by the companies for oil spills

Attempts to create a table to sum up the quantities of incidents tolerated by the companies for oil spills, but at least one primary or secondary data source is not identified or used correctly

There are too many errors to correctly sum up the data for use in the analysis

15

Aggregate Marginal

Willingness to Pay

Meets “Proficient” criteria and extends analysis of the combined demand information by using a program such as Excel to supply correct data that identifies profit-maximizing price and quantity

Generates an accurate aggregate marginal willingness to pay demand curve line graph with the use of a program such as Excel and provides proper labels to be used for analysis

Attempts to generate a graph with proper labels, but at least one primary or secondary data source is not identified or is missing, or one or more label is not used correctly

There is no analysis or no primary or secondary data source identified that could be used correctly used in the explanation

15

Paper Meets “Proficient” criteria and extends to include additional recommendations that enhance the narrative to the policy makers and those who influence them

Analyzes aggregate marginal willingness to pay and makes recommendations designed to reduce pollution; writes to influence policy makers with the use of data

Attempts to use aggregate marginal willingness to pay and to make recommendations, but at least one primary or secondary source is not identified or a source is not used correctly

There is no analysis or valid recommendation, or primary or secondary data sources are not used or they are not used correctly

30

Articulation of Response

Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

10

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