From a small northwestern observatory…

Having a good holiday season yet?

About 20 years ago (darn, time flies…) I wrote a paper using Monte Carlo simulation to model the potential failure rate in shopping centers. Ended up presenting it (of all places) at a major Economic Geography conference, and it got published in the proceedings of that conference.

Now fast forward to today. As regular readers know, we do a LOT of environmental valuation work. I don’t use M/C simulation, even though it has been used in the valuation literature. Well, this year, the 5th Circuit Court of Appeals was faced with an environmental case in which the testifying expert used M/C simulation to aid in allocating damages between two responsible parties, Lyondell Chemical Co. v. Occidental Chemical Corp., 608 F.3d 284 (5th Cir. 2010).

“The other side” opposed M/C, arguing that it hadn’t been applied in these cases, and that the error rate could not be determined. The Appeals Court rejected those arguments, and ruled in favor of M/C.

Neat. I need to work up a working paper on this, but I can already see some significant applications to what we do.