Peter Abelson

The Value of Life and Health for Public Policy

Expenditure on health and safety is a substantial part of GDP, but public agencies in many countries, including Australia, have only qualitative views about the value of life and health. Also, despite considerable work by economists on the value of life and health in recent years, some important issues, such as the value of a healthy life-year, remain unresolved. This paper presents a framework for valuing life and health. It then draws on international and Australian research to estimate possible values for life, healthy life-years, and various chronic and acute health states for public policy purposes in Australia.

Property prices and the value of amenities

Abstract Implicit hedonic prices of amenities are estimated by means of a study of the variation in house prices in Sydney. The results include estimated hedonic prices for aircraft noise, road traffic, road widening, good views, spacious streets, good access to shops, and high quality neighborhoods. Since hedonic prices are the response of the market at the margin to supply as well as demand forces, they do not necessarily reflect average household willingness to pay prices. However, the paper concludes that they provide a basis from which the values of amenities to be used in benefit cost studies can be estimated.

House and Land Prices in Sydney from 1931 to 1989

This paper describes and explains house and land prices in Sydney from 1931 to 1989. Throughout this period, house and land prices fell, generally exponentially, with distance to the CBD. However, the price gradients were not constant. Between 1931 and 1968 the gradients flattened. On the other hand, between the mid 1970s and 1989 they became steeper again. The changes in the gradients were caused mainly by changes in travel times and costs by road and rail. Real travel costs fell in the early period and rose later on. Other factors that affected the price gradients were changes in car ownership and the supply of urban services in the early period and gentrification of inner-city areas and the greater increase in housing supply on the urban fringe in the later period. The paper also shows how house size and environmental factors influenced house prices in the 1970s and 1980s.

Evaluation of slum improvements: Case study in Visakhapatnam, India

Abstract The paper discusses how to evaluate slum improvement programmes and illustrates the discussion with a case study of improvements in 170 slums in Visakhapatnam, India. Valuation methods discussed include land and house prices, income changes, contingent valuation, switching values and cost-effectiveness. Drawing mostly on property prices but also on other valuation methods, the paper reports evaluations of the slum improvement programme as a whole in Visakhapatnam, improvements in 19 sample slums, and investment in health care, education and vocational training. As measured by willingness to pay values, the return on the whole programme was marginal. The results are sensitive to assumptions about recurrent maintenance expenditures. Returns to investments in individual slums showed significant economies of scale with higher returns in larger slums. There were high income returns to training and the educational courses were probably warranted on willingness to pay grounds. There was, however, little improvement in the health status of slum households. The paper concludes that notwithstanding government policies to target support to poor communities, willingness to pay valuations can usefully contribute to programme evaluations. Finally the paper suggests various areas of research that would improve evaluation procedures.

The interpretation of capitalized hedonic prices in a dynamic environment

Abstract This paper considers the biases in hedonic price estimates of environmental variables. It is shown that using the current values of such variables can seriously bias the measure of the true effect of that variable when the future is changing. Although the bias can be in either direction most plausible examples considered show that we tend to underestimate such prices. A discussion of the relation between rental and capital value of hedonic prices follows from the distinction between present and future levels of environmental effects.

New development: Smoke and mirrors--fallacies in the New South Wales government's views on local government financial capacity

As many readers of Public Money & Management know, the New South Wales (NSW) government is planning large amalgamations of councils, especially within metropolitan Sydney, motivated in large part by a quest for financial savings. The historically weak financial results of many councils in Sydney have been largely a function of the regulatory environment, notably rate-pegging, and reflect recent changes in financial accounting benchmarks. More fundamentally, the financial capacity of local councils is a function of the income level of the local community and not of its size or population. In this paper, the authors explain differences in expenditure per capita by differences in income and services. Larger councils will not improve financial capacity.

Modelling House Prices across Sydney

This article models median house prices in 626 suburbs across Sydney, using three spatial hedonic models, and obtains high overall levels of explanation. Access to the central business district and the coast, as well as house and lot sizes, are predictably positive factors. Violent crime significantly depresses house values. Access to rail and high‐frequency bus services is weakly significant only when access is generally poor. However, neither access to a sub‐centre nor housing density was found to have a separate impact on house prices. Research using unit record data could refine the findings of this suburb‐level analysis.

COST BENEFIT ANALYSIS OF PROPOSED MAJOR RAIL DEVELOPMENT IN LAGOS, NIGERIA.

Railways are often advocated, despite the high subsidies usually required, because of their carrying capacity and the perceived environmental advantages of air quality, safety, energy savings and general urban amenity. This paper reviews these issues taking Lagos as a case study. After reviewing transport issues in Lagos, the paper provides a detailed cost‐benefit analysis of the proposed metro. Special attention is paid to land take requirements, severance, air quality, traffic noise, construction impacts and various minor environmental impacts. The paper concludes that the metro (as proposed) is economically and financially a very marginal prospect. Important points that emerge are the critical importance of efficient transport management, the importance of social impacts, the relatively minor importance of environment impacts, and the need for more attention to network and land use impacts.

HOUSING IN AUSTRALIA

The Australian Bureau of Statistics (ABS) recently released data from 2017-18 Survey of Income and Housing (SIH). The SIH is a household survey which collects information on sources of income, amounts received, household net worth, housing, household characteristics and personal characteristics of persons aged 15 years and over in private dwellings throughout Australia (excluding very remote areas).

Financing Transport Infrastructure: Public Finance Issues

This chapter discusses method of financing transport infrastructure and the implication for public finance. In this chapter, “financing” refers to the raising of financial capital to fund infrastructure. However, financing infrastructure is not a self contained issue. As the chapter shows, the optimal way to raise capital cannot be separated from the question of how capital is serviced and repaid. Also, financing has implications of the ownership, organization, and management of infrastructure. This chapter takes as its starting point that the proposed transport infrastructure represents an efficient use of resources, generally as determined by cost-benefit analysis. It assumes that the expected social rate of return generated by the proposed capital formation exceeds the rate of return available from other uses of scarce capital. This is a necessary condition for the efficient allocation of publicly or privately financed resources. It is of course possible that the social viability of a project depends on how the project is delivered. However, discussion of cost-benefit analysis and related issues of resource allocation are outside the scope of this chapter.