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Some Like It (Less) Hot: Extracting Trade-Off Measures for Physically Coupled Amenities

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  • H. Allen Klaiber
  • Joshua K. Abbott
  • V. Kerry Smith

Abstract

The urban heat island (UHI) provides direct evidence of human activities contributing to a feedback loop that changes ecosystem services by creating localized warming and differences in vegetated landscapes in areas around the urban core. This paper develops a new spatial-temporal panel estimator to recover consistent estimates of households' valuation of coupled landscape and temperature ecosystem services. Using data from Phoenix, AZ, we estimate a hedonic price function using an extension of the Hausman-Taylor model to overcome challenges associated with the varying spatial scales of capitalization of landscape and temperature variables and omitted variables. We find a positive and economically significant marginal willingness to pay (MWTP) for measures of green landscaping at multiple spatial scales and a separate MWTP for a one degree (F) reduction in outdoor temperatures of $72 monthly.

Suggested Citation

  • H. Allen Klaiber & Joshua K. Abbott & V. Kerry Smith, 2017. "Some Like It (Less) Hot: Extracting Trade-Off Measures for Physically Coupled Amenities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(4), pages 1053-1079.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/692842
    DOI: 10.1086/692842
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    Cited by:

    1. Brelsford, Christa & Abbott, Joshua K., 2021. "How smart are ‘Water Smart Landscapes’?," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    2. Jesse Burkhardt & Nathan W. Chan & Bryan Bollinger & Kenneth T. Gillingham, 2022. "Conformity and Conservation: Evidence from Home Landscaping and Water Conservation," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 228-248, January.
    3. Hua Zhong & Michael H. Taylor & Kimberly S. Rollins & Dale T. Manning & Christopher G. Goemans, 2019. "Who pays for water scarcity? Evaluating the welfare implications of water infrastructure investments for cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 559-600, December.
    4. Jacob Fishman & V. Kerry Smith, 2017. "Latent Tastes, Incomplete Stratification, and the Plausibility of Vertical Sorting Models," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 339-361, February.
    5. Daniel A. Brent, 2016. "Estimating Water Demand Elasticity at the Intensive and Extensive Margin," Departmental Working Papers 2016-06, Department of Economics, Louisiana State University.
    6. Lydia Cheung & Mario Andres Fernandez, 2021. "Changes in Amenity Values after COVID‐19 Lockdowns in Auckland, New Zealand," Economic Papers, The Economic Society of Australia, vol. 40(4), pages 331-350, December.
    7. Ulrich B. Morawetz & H. Allen Klaiber, 2022. "Does housing policy impact income sorting near urban amenities? Evidence from Vienna, Austria," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 411-454, October.

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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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