EVIDENCE OF THE EFFECTS OF WATER QUALITY ON RESIDENTIAL LAND PRICES

We use hedonic techniques to show that water quality has a significant effect on property values along the Chesapeake Bay. Mindful of the limitations of using hedonic methods for welfare analysis, we calculate the potential benefits from an illustrative (but limited) water quality improvement. Past hedonic studies have almost entirely ignored the potential for omitted variables bias -- the possibility that pollution sources, in addition to emitting undesirable substances, are likely to be unpleasant neighbors. We discuss the implications of this oversight, and we provide an application that addresses the problem head-on.water quality, hedonic models, residential land prices, Environmental Economics and Policy,

Behavioral Modeling and Fisheries Management

Because of the extreme uncertainty in fisheries biology, efforts to determine a stock-recruitment relationship have not been entirely successful. In the face of this certainty, this paper argues for a change in focus for fisheries economics from bioeconomic optimization toward goals which are more modest and more easily achievable. In particular, a satisficing approach to management is advocated, whereby efforts are made to reallocate some porportion of effort from overutilized to underutilized fisheries, with no attempt to determine the optimum. In order to achieve such a solution efficiently, managers must accurately predict the response of fishermen to public policy. This paper reports on a study which develops a discrete choice model to predict fishermen's supply response. Fishermen are shown to respond to economic incentives of expected returns and variability of returns, but only after these incentives surpass a substantial threshold.Institutional and Behavioral Economics,

PRESERVATION OR DEVELOPMENT: COMPETING USES OVER THE FUTURE OF FARMLAND IN URBANIZING AREAS

Land use, farmland preservation, competing risks models, multinomial logit models, Resource /Energy Economics and Policy,

A Random Utility Model for Sportfishing: Some Preliminary Results for Florida

The gray literature in the field of nonmarket benefit measurement has made extensive use of the random utility (or discrete choice) model in recent years, but few applications appear in the literature. This article provides such an application, illustrating the technique with preliminary results from a regional study modeling east cost sportfishing behavior. The article discusses some of the strengths and weaknesses of the random utility model. It also illustrates how data regularly collected by the National Marine Fisheries Service can be supplemented with economic survey data to estimate these discrete choice behavioral models.Random utility, discrete choice, sportfishing, nonmarket benefits, environmental quality, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Measuring the Benefits of Improvements in Water Quality: The Chesapeake Bay

Federal, state, and local government agencies have joined forces in the ambitious and expensive task of improving the water quality of the Chesapeake Bay. Clean-up efforts will be devoted to three major problems: nutrient over enrichment, toxic substances, and the decline of submerged aquatic vegetation. Although the beneficiaries are ultimately human, criteria for judging the Bay's water quality have been primarily biological and physical. This paper addresses the question of the human values from the Bay. How do people use the Bay and how much are they willing to pay for the changes in water quality that improve their use? With a variety of methods and data sources, we estimate the annual aggregate willingness to pay for a moderate improvement in the Chesapeake Bay's water quality to be in the range of $10 to$100 million in 1984 dollars.Community/Rural/Urban Development, Environmental Economics and Policy, Resource /Energy Economics and Policy,

Pulsed Generic Advertising: The Case of Common Property

Regulation of fisheries production together with public promotion of fisheries products offer a potentially profitable environment for fishermen. Yet production restrictions are usually insufficient to prevent entry, causing depletion of the resource base and dissipation of long-run profits from promotion. Shorter run gains may be possible, providing producer response to advertising is not instantaneous. Lagged biological and economic responses appear to provide a rationale for pulsed advertising. Moreover, a pulsed advertising policy is shown to mitigate the adverse effects on the resource base which would normally accompany expansion of consumption without direct production control.generic promotion, oysters, common property, pulsed advertising, Environmental Economics and Policy, Resource /Energy Economics and Policy,

PREFERENCES FOR FOOD LABELS: A DISCRETE CHOICE APPROACH

Nutritional labels, label formats, consumer preferences, Food Consumption/Nutrition/Food Safety,

An Empirical Examination of Real Options and the Timing of Land Conversions

Many studies have examined the effects of land use regulations on land prices and urban spatial form. Increasingly, jurisdictions have adopted incentive based mechanisms, such as purchase of development rights (PDR) programs, to manage the pace and pattern of urban growth and the conversion of agricultural land. PDR programs provide a third option to landowners in urbanizing areas: in addition to deciding whether to develop or not, landowners can decide whether to preserve their land. To our knowledge no studies have explored how the existence of an option to participate in a PDR program affects landowners' development decisions. This research provides empirical evidence of a previously untested prediction of real options theory: that additional options increase the value of waiting to make irreversible decisions. Our paper considers how an additional land use alternative, preservation, conveys a different type of option value and how that option affects the optimal conversion time. We estimate a hazard model and find significant evidence that the option to enter an easement decreases the hazard rate of development by about 40%. The results suggest that PDR programs can provide additional open space and amenity values beyond what is provided on preserved parcels, by delaying development (by at least a few years) of parcels that are not actually preserved.agricultural preservation programs, real options, land conversion, Land Economics/Use,

NUTRITION LABELING: DOES THE MESSAGE REACH THE CONSUMER?

Nutrition labeling does not necessarily lead to healthier diets. Consumers may substitute away from unhealthy products in food categories where differences in other quality characteristics (e.g., taste) are relatively small and towards unhealthy products in categories where differences may be large. The effects are largest among less-educated and younger individuals.Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,