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A choice modelling approach to investigate biases in individual and aggregated benefit estimates due to omission of distance

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  • G. Concu

Abstract

This paper describes a Choice Modelling experiment set up to investigate the relationship between distance and willingness to pay for environmental quality changes. The issue is important for aggregation and transfer of benefits. So far the problem has been analysed though the use of Contingent Valuation-type of experiments, producing mixed results. The experiment allows testing distance effects on parameters of environmental attributes that imply different trade-offs between use and non-use values. The distance covariate enters the estimated utility function in a flexible form to accommodate for several possible relationships. The sampling procedure is designed to provide a "geographically balanced" sample. Welfare analysis shows that disregarding distance produces under-estimation of individual and aggregated benefits and losses, seriously hindering the reliability of cost-benefit analyses.

Suggested Citation

  • G. Concu, 2004. "A choice modelling approach to investigate biases in individual and aggregated benefit estimates due to omission of distance," Working Paper CRENoS 200412, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    • Handle: RePEc:cns:cnscwp:200412
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    References listed on IDEAS

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    Cited by:

    1. G. Concu, 2004. "Effects of distance on non-use values," Working Paper CRENoS 200411, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    2. G. Marletto, 2006. "La politica dei trasporti come politica per l'innovazione: spunti da un approccio evolutivo," Working Paper CRENoS 200605, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    3. OA Carboni & G Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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