The Economic Value Of Weather Forecasts

Economic Value of Weather Forecasts

Outline

Economics

Neoclassical Value Theory

Consumer Utility Theory

Budget Constraint

Constrained Utility Maximization

Solution to Utility Maximization Problem

Economics of Production

Value of Increased Income

Lessons Learned So Far

Wheres the weather?

Weather and State Dependent Utility

Weather and State Dependent Utility

Risk and Uncertainty

Expected Utility (EU) Theory

Expected Utility (EU) Theory

Expected Utility and Forecast Information

Value of Information

Public Goods

Valuation Methods

Valuation Methods

Valuation Methods

Making Connections

Conclusion

Fin