A Choice Modelling Approach for Assessment of Use and Quasi-Option Values in Urban Planning for Areas of Environmental Interest

This study adopts a discrete choice modelling methodology to evaluate individuals’ preferences over planning alternatives for an urban site of environmental interest. Since such projects involve some uncertainty and irreversibility, a special attention is devoted to the estimation of the quasi-option values which are associated to project development. Two distinct measures for the quasi-option value are estimated, and both coefficients indicate that the public places a significant value on reduction of the possibility of adverse irreversible effects: a more prudent development strategy is valued about four times more than a procedure that provides a lesser hedge against undesired outcomes. Furthermore, the study involved elicitation of intertemporal preferences over projects with different time spans, and estimation of the implicit discount rates: the values obtained seem high if compared to standard discount rates applied to public projects, but not far from current interest rates on consumption.

[1]  Ralph L. Keeney,et al.  Wise choices : decisions, games, and negotiations , 1996 .

[2]  Kenneth E. Train,et al.  Discrete Choice Methods with Simulation , 2016 .

[3]  K. Arrow,et al.  Environmental Preservation, Uncertainty, and Irreversibility , 1974 .

[4]  Juan de Dios Ortúzar,et al.  On fitting mode specific constants in the presence of new options in RP/SP models , 2006 .

[5]  Michael Finus,et al.  Coalition Formation and the Ancillary Benefits of Climate Policy , 2008 .

[6]  D. McFadden,et al.  URBAN TRAVEL DEMAND - A BEHAVIORAL ANALYSIS , 1977 .

[7]  Anna Vári,et al.  Public participation in environmental decisions , 2000 .

[8]  K. Arrow,et al.  Is There a Role for Benefit-Cost Analysis in Environmental, Health, and Safety Regulation? , 1996, Science.

[9]  R. Lind,et al.  Reassessing the government's discount rate policy in light of new theory and data in a world economy with a high degree of capital mobility , 1990 .

[10]  L. Robin Keller,et al.  Examining Predictive Accuracy Among Discounting Models , 2002 .

[11]  Katrin Millock,et al.  The Factors Behind CO2 Emission Reduction in Transition Economies , 2008 .

[12]  Angelo Antoci,et al.  Structural Change, Environment and Well-Being: Interactions Between Production and Consumption Choices of the Rich and the Poor in Developing Countries , 2008 .

[13]  Jasone Cenoz,et al.  Language Diversity in Urban Landscapes: An Econometric Study , 2008 .

[14]  Pietro Caratti,et al.  Analysing Regional Sustainability Through a Systemic Approach: The Lombardy Case Study , 2008 .

[15]  Elena Bellini,et al.  Measuring the Impact of Tourism Upon Urban Economies: A Review of Literature , 2008 .

[16]  Federico Dini,et al.  The Determinants of Suppliers' Performance in E-Procurement: Evidence from the Italian Government's E-Procurement Platform , 2008 .

[17]  Michele Moretto,et al.  Managing Migration Through Quotas: An Option-Theory Perspective , 2008 .

[18]  Catherine L. Kling,et al.  Willingness-To-Pay, Compensating Variation, and the Cost of Commitment , 2004 .

[19]  Anthony C. Fisher,et al.  Investment under uncertainty and option value in environmental economics , 2000 .

[20]  Eduardo S. Schwartz,et al.  Investment Under Uncertainty. , 1994 .

[21]  Thomas C. Beierle.  Democracy in Practice: Public Participation in Environmental Decisions , 2010 .

[22]  Helena Catt,et al.  Democracy in practice , 1999 .

[23]  Elena Bellini,et al.  Effects of Tourism Upon the Economy of Small and Medium-Sized European Cities: Cultural Tourists and 'The Others' , 2008 .

[24]  Gideon Kruseman,et al.  Institutions and Forest Management: A Case Study from Swat, Pakistan , 2008 .

[25]  Jay R. Corrigan,et al.  Willingness to Pay and the Cost of Commitment: An Empirical Specification and Test , 2008 .

[26]  C. Manski.  The structure of random utility models , 1977 .

[27]  Benno Torgler,et al.  Corruption and Political Interest: Empirical Evidence at the Micro Level , 2009 .

[28]  Xavier Pautrel,et al.  ENVIRONMENTAL POLICY, EDUCATION AND GROWTH: A REAPPRAISAL WHEN LIFETIME IS FINITE , 2008, Macroeconomic Dynamics.

[29]  G. Loewenstein,et al.  Time Discounting and Time Preference: A Critical Review , 2002 .

[30]  T. Requate,et al.  The Dixit-Pindyck and the Arrow-Fisher-Hanemann-Henry Option Values are Not Equivalent , 2003 .

[31]  W. Michael Hanemann,et al.  Information and the concept of option value , 1983 .

[32]  Anna Alberini,et al.  Redeveloping derelict and underused historic city areas: evidence from a survey of real estate developers , 2008 .

[33]  Riccardo Scarpa,et al.  Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study , 2007 .

[34]  V. Bosetti,et al.  The Value of Flexibility: Preservation, Remediation, or Development for Ginostra? , 2004 .