Journal of Population Economics, (2025)
Environmental and Resource Economics, (2024) EAERE Special commendation for outstanding publication in ERE.
Do religions codify ecological principles? This paper explores theoretically and empirically the role religious beliefs play in shaping environmental interactions. We study African Traditional Religions (ATR) which place forests within a sacred …
Social Science & Medicine 301, (2022)
Journal of Population Economics 34, 1355–1383 (2021).
We present a model of firm investment under uncertainty and partial irreversibility in which uncertainty is represented by a jump diffusion. This allows to represent both the continuous Gaussian volatility and the discontinuous uncertainty related to information arrival, sudden changes and large shocks. The model shows how both sources of uncertainty negatively impact the optimal investment and disinvestment policies, and how the presence of large negative jumps can drastically affect the firm's ability to recover. Our results show that the standard Gaussian framework consistently underestimates the negative effect of uncertainty on firm investment decisions. We test these predictions on a panel of UK firms - we first structurally estimate the uncertainty parameters using multinomial maximum likelihood and differential evolution techniques and subsequently study their impact on firm investment rates, validating our model predictions.