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Valuing externalities of outdoor advertising in an urban setting – the case of Warsaw

Author

Listed:
  • Mikołaj Czajkowski

    (Faculty of Economic Sciences, University of Warsaw)

  • Michał Bylicki

    (Faculty of Economic Sciences, University of Warsaw)

  • Wiktor Budziński

    (Faculty of Economic Sciences, University of Warsaw)

  • Mateusz Buczyński

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

Outdoor advertising produces externalities, such as visual pollution, that have to be considered in cityscape planning. In recent years, opposition to excessive outdoor advertising in Poland has grown, resulting in the enactment of new regulations in 2015: The Landscape Bill. It allows local authorities to limit outdoor advertising in their municipality. We present the results of a stated preference study aimed at estimating the value that people attach to the reductions of outdoor advertising in Warsaw, the capital of Poland. We considered two types of outdoor advertising mediums: free-standing ads and on-building ads, alongside five levels of advertising reduction. We find that inhabitants of Warsaw prefer regulating and limiting the amount of outdoor advertising and we quantify their willingness to pay for such a policy. The most preferred level of free-standing ads was a 75% reduction, for which the people of Warsaw are willing to pay 5.6 million EUR annually in the form of increased prices and rents to compensate owners’ losses. For on-building ads, total ban was the most preferred, valued at 11.3 million EUR per year. Socio-demographic drivers of people’s willingness to pay are explored. Overall, our study demonstrates how stated preference methods can be used for informing urban landscape policies and adds to the ongoing debate surrounding outdoor advertising.

Suggested Citation

  • Mikołaj Czajkowski & Michał Bylicki & Wiktor Budziński & Mateusz Buczyński, 2020. "Valuing externalities of outdoor advertising in an urban setting – the case of Warsaw," Working Papers 2020-01, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2020-01
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    More about this item

    Keywords

    Outdoor advertising; public preferences; stated preference methods; discrete choice experiment; willingness to pay;
    All these keywords.

    JEL classification:

    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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