Jeff Lazo

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Value of Weather Information and Weather
Forecasts as Public Goods

• Jeff Lazo
• Societal Impacts Program
• WASIS
• August 13, 2008

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first apology to Edward Tufte visual display of
quantitative information Challenger disaster and
use of PowerPoint second apology to Edward
Tufte never start a talk with an apology
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Weather forecast . . .
Pair of shoes . . .
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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?
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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

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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?

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Market Failures

• Public goods
• Market power
• Externalities
• Information

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Economics

• economics (ek'?-nom'iks, e'k?-) n.
• Lionel Robbins 1932 "the science which studies
  human behavior as a relation between scarce means
  having alternative uses."
• study of the allocation of scarce resources in
  light of unlimited wants
• Morss, Miller, et al.
• Economics Primer
• Lazo paper for Madrid conference

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What is Value?

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

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Why Value Forecasts?

• program justification
• benefit analysis
• program evaluation
• benefit-cost analysis
• guidance for research investment
• any cases of true comparative analysis?
• inform users of forecast benefits
• developing end-to-end-to-end forecast and warning
  system

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What Should Be Valued?

• Weather impacts
• Dutton - 3T US
• Forecasts
• Improved forecasts
• Research to improve forecasts
• How forecasts are used

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How Should It Be Valued?
Forecasts ? Value Integrate forecasting and
valuation - Meteorology - Economics
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How Should It Be Valued?
Weather ? Observation ? Forecast ?
Communication ? Perception ? Use ? Value
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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
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Stated Choice
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