Munich Personal RePEc Archive

A Safe Minimum Standard, an Elasticity of Substitution, and the Cleanup of the Ganges in Varanasi

Xing, Shiqi and Batabyal, Amitrajeet (2019): A Safe Minimum Standard, an Elasticity of Substitution, and the Cleanup of the Ganges in Varanasi.

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Abstract

Despite repeated calls for a thorough cleanup of water pollution in the Ganges river, there are only two papers in the social sciences by Batabyal and Beladi (2017, 2019) that have shed theoretical light on this cleanup problem and its connection to the sustainability of tourism in Varanasi. Hence, we extend the above mentioned analyses and focus on two specific questions. First, we introduce the notion of a safe minimum standard (SMS) into the study and show how to analyze a probabilistic model of the Ganges cleanup problem when the SMS is accounted for. Second, for a representative citizen of Varanasi, we study how the magnitude of the elasticity of substitution between a composite consumption good and water quality in the Ganges---modeled by the SMS---affects the tradeoff between consumption and water quality maintenance.

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