Mark Thayer

A Test of the Expected Utility Model : Evidence from Earthquake Risks

The purposes of this paper are twofold. The first is to demonstrate that the expected utility hypothesis is a reasonable description of behavior for consumers who face a low-probability, high-loss natural hazard event, given that they have adequate information. The second is to demonstrate that in California information on earthquake hazards was generated by a 1974 state law that created a market for safe housing that previously did not exist.

A Spatially Autoregressive Median Voter Model of Recreation Expenditures

This article presents a median voter model to explain the expenditures on recreation by local governments. The authors show that when the benefits of a public good provided by one community can spill over to members of other communities the correct empirical specification is a spatially autoregressive econometric model With respect to local recreation, it was found that communities with relatively high incomes and air pollution spend relatively less on provision.

Hedonic price estimation of variable urban air quality

Abstract This paper investigates the validity of the hypothesis that the appropriate specification of the hedonic function should use mean levels of environmental quality. A test of the mean specification is constructed by estimating a hedonic equation with the probabilities of various levels of environmental quality entered as independent variables. The test indicates rejection of the mean specification. The results imply that benefit estimates based on the traditional mean model are likely to be biased and that efforts to improve the accuracy of hedonic methods should consider more complete measures of environmental quality.

The Benefits of Visibility Improvement: New Evidence from the Los Angeles Metropolitan Area

This article examines the impact of a specific aspect of air quality—visibility, or the ability to clearly see distant objects—on housing values. Our analysis is based on a data set constructed by matching residential housing sales data from the Los Angeles Metropolitan Area for the period 1980 through 1995 with visibility and other air pollution data and other characteristics. We find that visibility differences are capitalized into housing values, producing a measurable hedonic price gradient. The time-series design facilitates an estimate of the demand for visibility that we use to calculate the benefits of changes in visual range.

The Impact of Natural Hazards on Housing Values: The Loma Prieta Earthquake

A large, detailed data set is used to examine the effect of the Loma Prieta (World Series) earthquake on housing prices in the San Francisco Bay area. This relationship is examined while controlling for potential confounding variables, such as location-specific risk and the timing of the earthquake. The results indicate that the Loma Prieta earthquake caused an area wide reduction in property values. In addition, it seems that individuals considered other measures of earthquake risk in their housing purchases, yielding a measurable price gradient. These results are relatively robust, remaining stable across estimated functional forms and independent variable sets. Copyright American Real Estate and Urban Economics Association.

The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis

This report uses statistical analysis to evaluate the impact of wind power projects on property values, and fails to uncovers conclusive evidence of the existence of any widespread property value impacts.

Earthquake and volcano hazard notices: An economic evaluation of changes in risk perceptions

Abstract Earthquake and volcano hazard notices were issued for the Mammoth Lakes, California area by the U.S. Geological Survey under the authority granted by the Disaster Relief Act of 1974. The effects on investment, recretion visitation, and risk perceptionsare explored. The hazard notices did not affect recreation visitation, although investment was affected. A perceived loss in the market value of homes was documented. Risk perceptions were altered for property owners. Communication of the probability of an event over time would enhance hazard notices as a policy instrument and would mitigate unnecessary market perturbations.

Urban air quality improvements : a comparison of aggregate health and welfare benefits to hedonic price differentials

Abstract A comparison of two approaches to estimating the economic benefits of improvements in air quality shows that both methods yield similar results. The first approach uses a bottom-up methodology. All of the health and aesthetic effects of small changes in air pollution are estimated individually and then aggregated to estimate the economic marginal benefits. The second, a top-down approach, uses the hedonic methodology to estimate the addition to benefits.

An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California

LBNL-4476E E RNEST O RLANDO L AWRENCE B ERKELEY N ATIONAL L ABORATORY An Analysis of the Effects of Residential Photovoltaic Energy Systems on Home Sales Prices in California Ben Hoen, Ryan Wiser, Peter Cappers and Mark Thayer Environmental Energy Technologies Division April 2011 Download from http://eetd.lbl.gov/ea/emp/reports/lbnl-4476e.pdf This work was supported by the Office of Energy Efficiency and Renewable Energy (Solar Energy Technologies Program) of the U.S. Department of Energy under Contract No. DE-AC02-05CH11231, by the National Renewable Energy Laboratory under Contract No. DEK-8883050, and by the Clean Energy States Alliance.

The benefits of reducing the incidence of nonmelanoma skin cancers: A defensive expenditures approach

Abstract A defensive expenditures approach is used to estimate the benefits of reducing the predicted increases in the rates of nonmelanoma skin cancers over the next 60 years. The defensive expenditures estimates are compared to estimates generated using a cost of illness methodology. The cost of illness estimates are found to be more than double the estimates from the defensive expenditures method.