(WP 2007-02) Valuing Environmental Quality: A Space-based Strategy

This paper develops and applies a space-based strategy for overcoming the general problem of getting at the demand for non-market goods. It focuses specifically on evaluating one form of environmental quality, distance from EPA designated environmental hazards, via the single-family housing market in the Puget Sound region of Washington State. A spatial two stage hedonic price analysis is used to: (1) estimate the marginal implicit price of distance from air release sites, hazardous waste generators, hazardous waste handlers, superfund sites, and toxic release sites; and (2) estimate a series of demand functions describing the relationship between the price of distance and the quantity consumed. The analysis, which represents a major step forward in the valuation of environmental quality, reveals that the information needed to identify second-stage demand functions is hidden right in plain site — hanging in the aether of the regional housing market

(WP 2010-02) The Demand for Historic Preservation

Historic preservation is commonly used to protect old buildings and neighborhoods from deterioration. In 1981, the City of Milwaukee established a historic preservation commission to develop and maintain a local register of places with historical importance to the area. The commission also reviews all applications for historic status as well as any requests for exterior alterations. As such, there are numerous rules and restrictions that are imposed on property owners once it has been declared a historic site. Thus, while historic designation can serve to internalize the externalities in neighborhoods with historic buildings, it also imposes costs on homeowners who wish to make improvements to their homes. This paper uses a hedonic model to estimate the impact of historic preservation on the sale price of a single family home in the Milwaukee area. Preliminary results show that the impact of historic preservation is positive when it is significant, with the average impact at 26.6%. However, there was significant variation between districts, with the impact significantly positive in 13 of 22 districts used in the sample. Specifically, the positive impact ranged between 11% and 65%, holding other factors constant. None of the 22 districts had a negative and significant impact. An evaluation of spillover effects reveal that just over one third of them displayed positive and significant spillover effects, whereas 21% had negative and significant spillover effects. The remainder were insignificant. An important question is what factors influence this variability in historic preservation effects. The eventual goal of this research is to extend our preliminary analysis to two stages using a recently developed method that employs spatial econometric methods to solve the unique identification problems inherent in hedonic models (Carruthers and Clark, forthcoming in Journal of Regional Science). This will permit us to determine the specific factors that influence these premiums. While the spatial estimates presented in this preliminary work do not permit a two-stage model, we did explore whether implicit prices appear to be correlated with the household income and racial makeup of the neighborhoods in which they are located. The findings show little evidence that the implicit values of historic districts are correlated, but the implicit price associated with historic district spillovers was positively correlated with both neighborhood measures

Stratiform clouds and their interaction with atmospheric motions

During the 1987 to 1988 academic year, three projects were finished and plans were made to redirect and focus work in a proposal now being reviewed. The completed work involves study of waves on an equatorial beta-plane in shear flow, investigation of the influence of orography on the index cycle, and analysis of a model of cloud street development in a thermally-forced, sheared environment. The proposed work involves study of boundary layer circulations supporting stratocumulus decks and investigation of how the radiative effects of these clouds modulate larger-scale flows such as those associated with the index oscillation

The Demand for Historic Preservation

Historic preservation is commonly used to protect old buildings and neighborhoods from deterioration. In 1981, the City of Milwaukee established a historic preservation commission to develop and maintain a local register of places with historical importance to the area. The commission also reviews all applications for historic status as well as any requests for exterior alterations. As such, there are numerous rules and restrictions that are imposed on property owners once it has been declared a historic site. Thus, while historic designation can serve to internalize the externalities in neighborhoods with historic buildings, it also imposes costs on homeowners who wish to make improvements to their homes. This paper uses a hedonic model to estimate the impact of historic preservation on the sale price of a single family home in the Milwaukee area. Preliminary results show that the impact of historic preservation is positive when it is significant, with the average impact at 26.6%. However, there was significant variation between districts, with the impact significantly positive in 13 of 22 districts used in the sample. Specifically, the positive impact ranged between 11% and 65%, holding other factors constant. None of the 22 districts had a negative and significant impact. An evaluation of spillover effects reveal that just over one third of them displayed positive and signficant spillover effects, whereas 21% had negative and significant spillover effects. The remainder were insignificant. An important question is what factors influence this variability in historic preservation effects. The eventual goal of this research is to extend our preliminary analysis to two stages using a recently developed method that employs spatial econometric methods to solve the unique identification problems inherent in hedonic models (Carruthers and Clark, forthcoming in Journal of Regional Science). This will permit us to determine the specific factors that influence these premiums. While the spatial estimates presented in this preliminary work do not permit a two-stage model, we did explore whether implicit prices appear to be correlated with the household income and racial makeup of the neighborhoods in which they are located. The findings show little evidence that the implicit values of historic districts are correlated, but the implicit price associated with historic district spillovers was positively correlated with both neighborhood measures.Hedonic housing model, historic preservation district, Milwaukee

The Benefits of Environmental Improvement: Estimates From Space-time Analysis

This paper develops estimates of environmental improvement based on a two-stage hedonic price analysis of the single family housing market in the Puget Sound region of Washington State. The analysis — which focuses specifically on several EPA-designated environmental hazards and involves 226,918 transactions for 177,303 unique properties that took place between January 2001 and September 2009 — involves four steps: (i) ten hedonic price functions are estimated year-by-year, one for each year of the 2000s; (ii) the hedonic estimates are used to compute the marginal implicit price of distance from air release, superfund, and toxic release sites; (iii) the marginal implicit prices, which vary through time, are used to estimate a series of implicit demand functions describing the relationship between the price of distance and the quantity consumed; and, finally (iv) the demand estimates are compared to those obtained in other research and then used evaluate the potential scale of benefits associated with some basic environmental improvement scenarios. Overall, the analysis provides further evidence that it is possible to develop a structural model of implicit demand within a single housing market and suggests that the benefits of environmental improvement are substantial.Hedonic housing model, benefits, environmental improvement

Implications of summertime marine stratocumulus on the North American climate

This study focuses on the effects of summertime stratocumulus over the eastern Pacific. This cloud is linked to the semi-permanent sub-tropical highs that dominate the low-level circulation over the Pacific and Atlantic. Subsidence on the eastern flank of these highs creates an inversion based about 800 m above sea level that caps moist air near the surface. This air overlies cool waters driven by upwelling along the coastal regions of North America. Strong surface north-westerlies mix the boundary layer enough to saturate the air just below the capping inversion. Widespread stratocumulus is thus formed. All calculations were carried out using the GENESIS general circulation model that was run at MSFC. Among the more important properties of the model is that it includes radiative forcing due to absorption of solar radiation and the emission of infrared radiation, interactive clouds (both stratocumulus and cumulus types), exchanges of heat and moisture with the lower boundary. Clouds are interactive in the sense that they impact the circulation by modifying the fields of radiative heating and turbulent fluxes of heat and moisture in the boundary layer. In turn, clouds are modified by the winds through the advection of moisture. In order to isolate the effects of mid- and high-latitude stratocumulus, two runs were made with the model: one with and the other without stratocumulus. The runs were made for a year, but with perpetual July conditions, i.e., solar forcing was fixed. The diurnal solar cycle, however, was allowed for. The sea surface temperature distribution was fixed in both runs to represent climatological July conditions. All dependent variables were represented at 12 surfaces of constant sigma = p/p(sub O), where p is pressure and p(sub O) is surface pressure. To facilitate analysis, model output was transformed to constant pressure surfaces. Structures no smaller in size than 7.5 degrees longitude and 4.5 degrees in latitude were resolved. Smaller features of the circulation were parameterized. The model thus captures synoptic- and planetary-scale circulation features