Public Benefits of Undeveloped Lands on Urban Outskirts: Non-Market Valuation Studies and their Role in Land Use Plans

Over the past three decades, the economics profession has developed methods for estimating the public benefits of green spaces, providing an opportunity to incorporate such information into land-use planning. While federal regulations routinely require such estimates for major regulations, the extent to which they are used in local land use plans is not clear. This paper reviews the literature on public values for lands on urban outskirts, not just to survey their methods or empirical findings, but to evaluate the role they have played--or have the potential to play-- in actual land use plans. Based on interviews with authors and representatives of funding agencies and local land trusts, it appears that academic work has had a mixed reception in the policy world. Reasons for this include a lack of interest in making academic work accessible to policy makers, emphasizing revealed preference methods which are inconsistent with policy priorities related to nonuse values, and emphasis on benefit-cost analyses. Nevertheless, there are examples of success stories that illustrate how such information can play a vital role in the design of conservation policies. Working Paper 07-2

What Price Recreation in Finland?—A Contingent Valuation Study of Non-Market Benefits of Public Outdoor Recreation Areas

Basic services in Finnish national parks and state-owned recreation areas have traditionally been publicly financed and thus free of charge for users. Since the benefits of public recreation are not captured by market demand, government spending on recreation services must be motivated in some other way. Here, we elicit people’s willingness to pay (WTP) for services in the country’s state-owned parks to obtain an estimate of the value of outdoor recreation in monetary terms. A variant of the Tobit model is used in the econometric analysis to examine the WTP responses elicited by a payment card format. We also study who the current users of recreation services are in order to enable policymakers to anticipate the redistribution effects of a potential implementation of user fees. Finally, we discuss the motives for WTP, which reveal concerns such as equity and ability to pay that are relevant for planning public recreation in general and for the introduction of fees in particular

On Combining Stated Preferences and Revealed Preferences Approaches to Evaluate Environmental Resources Having a Recreational Use

This work aims at analysing the value of recreational water uses for the Idro Lake (Lombardy, Northern Italy), which has been experiencing dramatic fluctuations in its levels in recent years, due to excessive productive withdrawal that affected recreational uses. It estimates the economic benefits deriving from recreational uses, by considering the current recreational demand and the hypothetical one obtained by considering an “improved quality” scenario. Through an on-site survey, we built a panel dataset. Following Whitehead et al. (2000) and Hanley et al. (2003) we get welfare estimates by combining SP and RP responses. The present CS is estimated in €134 per individual, whilst the increase in CS is estimated in €173 per individual. These figures can be confronted with the economic value of competitive uses and with the clean up costs, respectively, to infer some policy indications

Controlling for Observed and Unobserved Site Characteristics in RUM Models of Recreation Demand

Recreation demand models are typically plagued by limited information on site attributes. If these unobserved site attributes are correlated with the observed characteristics and/or the travel cost variable, the resulting parameter estimates are likely to be biased. We develop a Bayesian approach to estimating a model that incorporates a full set of alternative-speci c constants, insulating the key travel cost parameter from the in uence of unobservables. The proposed posterior simulator can be used in the mixed logit framework in which some parameters of the conditional utility function are random. We apply the estimation procedures to data from the Iowa Lakes Project.Hatch Act and State of Iowa, the Iowa Department of Natural Resources and the U.S. Environmental Protection Agency's Science to Achieve Results (STAR) program.Grant R830818.http://ajae.oxfordjournals.org/hb201

Techno-Ecological Synergy: A Framework for Sustainable Engineering

Even though the importance of ecosystems in sustaining all human activities is well-known, methods for sustainable engineering fail to fully account for this role of nature. Most methods account for the demand for ecosystem services, but almost none account for the supply. Incomplete accounting of the very foundation of human well-being can result in perverse outcomes from decisions meant to enhance sustainability and lost opportunities for benefiting from the ability of nature to satisfy human needs in an economically and environmentally superior manner. This paper develops a framework for understanding and designing synergies between technological and ecological systems to encourage greater harmony between human activities and nature. This framework considers technological systems ranging from individual processes to supply chains and life cycles, along with corresponding ecological systems at multiple spatial scales ranging from local to global. The demand for specific ecosystem services is determined from information about emissions and resource use, while the supply is obtained from information about the capacity of relevant ecosystems. Metrics calculate the sustainability of individual ecosystem services at multiple spatial scales and help define necessary but not sufficient conditions for local and global sustainability. Efforts to reduce ecological overshoot encourage enhancement of life cycle efficiency, development of industrial symbiosis, innovative designs and policies, and ecological restoration, thus combining the best features of many existing methods. Opportunities for theoretical and applied research to make this framework practical are also discussed

Ecosystem Services in Conservation Planning: Targeted Benefits vs. Co-Benefits or Costs?

There is growing support for characterizing ecosystem services in order to link conservation and human well-being. However, few studies have explicitly included ecosystem services within systematic conservation planning, and those that have follow two fundamentally different approaches: ecosystem services as intrinsically-important targeted benefits vs. substitutable co-benefits. We present a first comparison of these two approaches in a case study in the Central Interior of British Columbia. We calculated and mapped economic values for carbon storage, timber production, and recreational angling using a geographical information system (GIS). These ‘marginal’ values represent the difference in service-provision between conservation and managed forestry as land uses. We compared two approaches to including ecosystem services in the site-selection software Marxan: as Targeted Benefits, and as Co-Benefits/Costs (in Marxan's cost function); we also compared these approaches with a Hybrid approach (carbon and angling as targeted benefits, timber as an opportunity cost). For this analysis, the Co-Benefit/Cost approach yielded a less costly reserve network than the Hybrid approach (1.6% cheaper). Including timber harvest as an opportunity cost in the cost function resulted in a reserve network that achieved targets equivalently, but at 15% lower total cost. We found counter-intuitive results for conservation: conservation-compatible services (carbon, angling) were positively correlated with each other and biodiversity, whereas the conservation-incompatible service (timber) was negatively correlated with all other networks. Our findings suggest that including ecosystem services within a conservation plan may be most cost-effective when they are represented as substitutable co-benefits/costs, rather than as targeted benefits. By explicitly valuing the costs and benefits associated with services, we may be able to achieve meaningful biodiversity conservation at lower cost and with greater co-benefits

Does the Swiss Car Market Reward Fuel Efficient Cars? Evidence from Hedonic Pricing Regressions, Matching and a Regression Discontinuity Design

To correct market failures due to the presence of negative externalities associated with energy consumption, governments have adopted a variety of policies, including taxes, subsidies, regulations and standards, and information-based policies. For example, labels that clearly convey energy consumption rates, associated costs, and emissions of conventional pollutants and CO2, have been devised and used in the last two decades in several countries. In 2003, Switzerland introduced a system of fuel economy labels, based on grades ranging from A to G, where is A best and G is worst, to assist consumers in making decisions that improve the fleet s fuel economy and lower emissions. We use a dataset documenting all passenger cars approved for sale in Switzerland each year from 2000 to 2011 to answer three key research questions. First, what is the willingness to pay for fuel economy? Second, do Swiss drivers - or Swiss auto importers on their behalf - appear to do a one-to-one tradeoff between car purchase price and savings on fuel costs over the lifetime of the car? Third, does the label have an additional effect on price, all else the same, above and beyond that of fuel efficiency alone? Hedonic pricing regressions that exploit the variation in fuel economy across make-models, and over time within make-models, suggest that there is a (modest) capitalization of fuel economy into car prices. The diesel premium, however, exceeds the future fuel cost savings made possible by diesel cars, even at zero discount rates. An alternate calculation suggests that the fuel economy premium is consistent with a very low discount rate (2.5%). We use a sharp regression discontinuity design (RDD) based on the mechanism used by the Swiss Federal Office of Energy to assign cars to the fuel economy label to see if the label has an independent effect on price, above and beyond that of the fuel economy. The RDD approach estimates the effect to be 6-11%. To broaden the fuel economy range over which we assess the effect of the A label, we also deploy matching estimators, and find that the effect of an A label on car price is approximately 5%