Pere Riera

Is the income elasticity of environmental improvements less than one

We estimated the income elasticity of environmental improvements for a number of European data-sets. The value of this parameter is consistently found to be less than one, with few exceptions. Our findings are compared with state-of-the-art contingent valuation studies from other countries. We also compared our findings with those reported in the literature on charitable donations and corporate donations. These studies show a similar pattern; donations decrease as a percentage of income, as income increases.

Expansion versus Density in Barcelona: A Valuation Exercise

This study provides an alternative empirical approach to identify optimal urban growth when accounting for its associated environmental effects. It is assumed that preserving outer landscapes and enjoying reduced density levels are inversely related, and so households must trade them off. The exercise analyses whether more disperse urban growth would be socially desirable in a particular area, the metropolitan region of Barcelona. A contingent valuation exercise using a double-bounded format was undertaken and an extended version of the spike model was used to estimate the willingness to pay of changing to a less dense urban path. The results show that a less compact scenario would be welfare-increasing in aggregate terms. It is suggested that general proposals on compacting cities should not necessarily constitute a desirable planning goal.

Economic valuation of policies for managing acidity in remote mountain lakes: examining validity through scope sensitivity testing

Abstract.The paper introduces the reader to the contingent valuation method for monetary valuation of individuals’ preferences regarding changes to environmental goods. Approaches to the validity testing of results from such studies are discussed. These focus upon whether findings conform with economic-theoretic expectations, in particular regarding whether valuations are sensitive to the size (or ‘scope’) of environmental change being considered, and whether they are invariant to alterations in study design which are irrelevant from the perspective of economic theory. We apply such tests to a large sample study of schemes to alter the acidity levels of remote mountain lakes. Results suggest that, when presented with environmental changes which respondents are concerned about, their values exhibit scope sensitivity and conform to theoretical expectations, and therefore could be used for formulating policy. However, when presented with changes which respondents feel are trivial, their values fail tests of theoretical consistency and are not scope sensitive, and therefore cannot be used within economic appraisals. Interestingly we find that qualitative focus group analyses are good indicators of whether a given change is likely to be considered trivial or not and therefore whether scope sensitivity tests are likely to be satisfied.

New directions in management strategy evaluation through cross-fertilization between fisheries science and terrestrial conservation

On 1 and 2 June 2010, an international meeting was held at the University of Paris Sud XI, France, organized within the framework of the EU FP7 consortium project HUNT, to bring together fisheries and conservation scientists to discuss a unified framework for the future of management strategies for harvested species.

VALUATION OF CLIMATE‐CHANGE EFFECTS ON MEDITERRANEAN SHRUBLANDS

In general, the socioeconomic analysis of natural systems does not enter into the realms of natural science. This paper, however, estimates the human-welfare effects of possible physicochemical and biological impacts of climate change on Mediterranean shrublands over the coming 50 years. The contingent choice method was applied to elicit the trade-offs in perceived values for three climate-sensitive attributes of shrubland (plant cover, fire risk, and soil erosion) and for the costs of programs designed to mitigate changes. Soil erosion was found to be the attribute of shrubland that most concerned the population, followed by fire risk and then plant cover. An increase of 1% in the shrubland area affected by erosion was estimated to cost each person on average 2.9 euros per year in terms of lost welfare, a figure that is equivalent in terms of perceptions of social welfare to an increase of 0.24% in the shrub area burned annually and a decrease of 3.19% in the area of plant cover. These trade-off values may help ecologists, policy makers, and land managers to take social preferences into account.

The influence of cheap talk on willingness-to-pay ranges: some empirical evidence from a contingent valuation study

Different instruments have been developed to mitigate the hypothetical bias in contingent valuation surveys. One, labelled ‘cheap talk’, warns participants about the hypothetical bias phenomenon prior to the valuation question. This paper investigates the effects of cheap talk on willingness-to-pay ranges, in a case study on remote mountain lakes. An open-ended follow-up question is added to a payment ladder to elicit the maximum amount an individual would definitely pay and the minimum amount above which they would definitely refuse to pay. The main conclusion is that cheap talk has no influence on the width of people’s willingness-to-pay range, but is effective at lowering the mean willingness-to-pay.

A Bayesian model for benefit transfer: application to national parks in Spain

Valuing environmental goods through benefit transfer is based on information from the set of past empirical studies of similar or identical sites. This paper proposes a Bayesian approach to model prior information on mean consumer surplus. The prior distribution is defined as a convex combination of the results from past empirical studies. An advantage of the Bayesian approach is that the prior distribution could be combined with on-site sample information in order to improve predictions on the benefits of the policy site. The model is applied to data from national parks in Spain. The results show that the benefits of policy sites are more sensitive to the prior information for smaller sample sizes. This implies that the prior distribution can be seen as a substitute for on-site sample information.

Determinants of willingness-to-pay for water pollution abatement: A point and interval data payment card application

This paper shows a contingent valuation exercise of pollution abatement in remote lakes. In addition to estimating the usual interval data model, it applies a point and interval statistical approach allowing for uncensored data, left-censored data, right-censored data and left- and right-censored data to explore the determinants of willingness-to-pay in a payment card survey. Results suggest that the estimations between models may diverge under certain conditions.

The importance of urban underground land value in project evaluation: a case study of Barcelona's utility tunnel

Abstract A case study of a utility tunnel in Barcelona has shown the importance, for evaluation purposes, of taking into account the value of the underground land used by a project. In the case studied, such a variable proved to be the key determinant for the feasibility of the project. However, in the past, underground land value has been consistently ignored; as a consequence, there are no established procedures in determining such values. This article proposes a practical procedure to determine the implicit market price of a given area and applies it to a benefit-cost analysis of Barcelonas utility tunnel project.

Fixed-effects Hedonic Price Model for Statistical Value of Live Estimations

Abstract Relatively little attention has been given to the differences in value of statistical life (VSL) from developed and less developed countries. The paper derives a cross‐countries VSL estimate based on road fatality accidents and it provides a test to check for such differences. Estimations were obtained from a fixed‐effect hedonic price model applied to a panel of data using new and second‐hand car prices from 27 countries as a dependent variable. The VSL estimate of e6.63 million is in line with results from other studies; and the income elasticity of VSL between countries is close to unity, implying that VSL is approximately proportional to income.