Value of Weather Information and Weather Forecasts as

Value of Weather Information and Weather Forecasts as Public Goods Jeff Lazo Societal Impacts Program WAS*IS August 13, 2008

first apology to Edward Tufte visual display of quantitative information Challenger disaster and use of Power. Point second apology to Edward Tufte never start a talk with an apology

Weather forecast. . . Pair of shoes. . .

What is a weather forecast? “Weather forecasting is the application of science and technology to predict the state of the atmosphere for a future time and a given location. ” What are the attributes of a forecast that create value? What are the attributes of a forecast that determine how they are used and by whom? What are the attributes of a forecast that determine who creates and supplies them? Compared to a pair of shoes?

Public Goods Weather forecast characteristics • Rival: consumption by one consumer prevents simultaneous consumption by other consumers • Exclusive: whether or not it is possible to exclude people who have not paid for a good or service from consuming it

Public Goods What is the price (i. e. , value) of weather forecasts? “Problems” of public goods • No observable price information • No provision by private markets Weather forecasts as “quasi-public goods”? Is a weather forecast a market good? Is a weather forecast a use good?

Market Failures § Public goods § Market power § Externalities § Information

Economics ec·o·nom·ics (ĕk'ə-nŏm'ĭks, ē'kə-) n. n Lionel Robbins 1932: "the science which studies human behavior as a relation between scarce means having alternative uses. " n n study of the allocation of scarce resources in light of unlimited wants Morss, Miller, et al. Economics Primer Lazo – paper for Madrid conference

What is Value? Neoclassical versus other approaches? Economic values and societal impacts, e. g. , • lives saved • time saved • environmental values • impact on vulnerable populations

Why Value Forecasts? 1. program justification n 2. program evaluation n 3. 5. benefit-cost analysis guidance for research investment n 4. benefit analysis any cases of true comparative analysis? inform users of forecast benefits developing end-to-end forecast and warning system

What Should Be Valued? n n n Weather impacts Dutton - $3 T US Forecasts Improved forecasts Research to improve forecasts How forecasts are used No informati on Climatolo Persistenc gy e Current informati on Improved informati on Perfect information

How Should It Be Valued? Forecasts Value Integrate forecasting and valuation - Meteorology - Economics

How Should It Be Valued? Weather Observation Forecast Communication Perception Use Value Meteorology Psychology Risk communication Anthropology Marketing Sociology Geography Risk perceptions Economics

What else does economics do? Study of behavior Problem definition “science in service to society” Tradeoffs and decision making Part of the overall weather forecast and warning system

Stated Choice