A combinatorial optimisation approach to non-market environmental benefit aggregation
AbstractThis paper considers the use of spatial microsimulation in the aggregation of regional environmental benefit values. The developed spatial microsimulation model uses simulated annealing to match the Irish Census of Agriculture data to a Contingent Valuation Survey that contains information on Irish farmers' willingness to pay (WTP) to have the corncrake restored as a common sight in the Irish countryside. We then use this matched farm survey and Census information to produce regional and national total WTP figures, and compare these to figures derived using more standard approaches to calculating aggregate environment benefit values. The main advantage of the spatial microsimulation approach for environmental benefit value aggregation is that it allows one to account for the heterogeneity in the target population. Results indicate that the microsimulation modelling approach provides aggregate WTP estimates of a similar magnitude as those produced using the usual sample mean WTP aggregation at the national level, but yields regional aggregate values which are significantly different.
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Bibliographic InfoPaper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2008-08.
Date of creation: Jun 2008
Date of revision:
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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
Phone: +44 (0)1786 467473
Fax: +44 (0)1786 467469
Web page: http://www.econ.stir.ac.uk/
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corncrake conservation; willingness to pay; aggregation spatial microsimulation; Environmental benefit value;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-11-04 (Agricultural Economics)
- NEP-ALL-2008-11-04 (All new papers)
- NEP-CMP-2008-11-04 (Computational Economics)
- NEP-DCM-2008-11-04 (Discrete Choice Models)
- NEP-ENV-2008-11-04 (Environmental Economics)
- NEP-GEO-2008-11-04 (Economic Geography)
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