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Valuing Local Environmental Amenity with Discrete Choice Experiments: Spatial Scope Sensitivity and Heterogeneous Marginal Utility of Income

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  • Bruno Lanz

    (Centre for Energy Policy and Economics (CEPE), Department of Management, Technology and Economics, ETH Zurich)

  • Allan Provins

    (Economics for the Environment Consultancy (eftec) ltd., London, U.K.)

Abstract

Using discrete choice experiments we examine preferences for the spatial provision of local environmental improvements in the context of regeneration policies. Amenities we consider are: improvements to areas of open space, recreation facilities and other public spaces; street cleanliness; restoration of derelict properties; and the provision of paths dedicated to cycling and walking. We include the spatial scope of the policy as an attribute, making the trade-off between environmental amenity and its spatial provision explicit. We employ a novel estimator for average willingness to pay (WTP) for mixed logit models with a random cost coefficient, which is robust to the presence of price insensitive respondents and performs well relative to mixed logit estimation in WTP space. We find that the spatial scope of the policy affects both the intensity and heterogeneity of preferences, and that these effects are of statistical and economic significance.

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Bibliographic Info

Paper provided by CEPE Center for Energy Policy and Economics, ETH Zurich in its series CEPE Working paper series with number 11-79.

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Length: 32 pages
Date of creation: Aug 2011
Date of revision:
Handle: RePEc:cee:wpcepe:11-79

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Postal: ETH-CEPE, Zürichbergstrasse 18, 8032 Zürich
Phone: +41-1-632 06 50
Fax: +41-1-632 16 22
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Web page: http://www.cepe.ethz.ch
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Keywords: Non-market valuation; Discrete choice experiments; Local environment; Spatial analysis; WTP estimation; Urban planning;

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