ECONOMIC INSIGHTS INTO THE SITING PROBLEM: AN APPLICATION OF THE EXPECTED UTILITY MODEL

Abstract

Despite the generally recognized need for facilities such as power plants, landfills, prisons, and medical laboratories, finding host sites has become extremely difficult. This study uses the expected utility (EU) model to explain individiuals' preferences in the hypothetical case of siting a municipal solid waste composting facility. The three principal factors which EU theory prescribes would affect the decision process- benefits of the proposed facility, losses from the facility, and the (perceived) probability of various scenarios occurring- embodied by the variables in a multinomial logit model explain a substantial amount of the variation in siting decisions.Public Economics,