Model Uncertainty

Uncertainty in environmental economics: The problem of entropy and model choice. Economic Analysis and Policy

In this paper the appropriate background in mathematics and statistics is considered in developing methods to investigate the uncertainty problem associated with environmental economics. A new generalized measure of uncertainty is introduced and a number of sources of uncertainty are discussed and presented. The causes of uncertainty are recognized and an examination is made of how they affect the adopted policies and how important their management is in any decision-making process, either under the introduced generalized normal distribution or the model choice.