Elisabetta Strazzera (University of Cagliari) Elisabetta Cherchi (DIT and CIREM, University of Cagliari) Silvia Ferrini (DEPFID, University of Siena, CSERGE and University of East Anglia)
Abstract
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.
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Publisher Info
Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number
2008.63.
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