AEM_451_Problem_Set_Solutions

# AEM_451_Problem_Set_Solutions - AEM 451/Econ 409 Suggested...

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AEM 451/Econ 409 Suggested Solutions for Problem Set #6 Spring 2008 1) a) Travel Cost Method: interview visitors to Ballona Wetlands, and determine origination location/zone. Construct demand curve linking visitation rate to cost of a visit, and aggregate demand curve estimating consumer surplus. Hedonic Valuation: Construct an econometric model with housing prices around the Ballona Wetlands as the dependent variable, and exogenous variables which may affect housing prices: size, presence of a fireplace, etc. Most importantly, distance to the wetlands must be one of the exogenous variables. The coefficient on the wetlands distance can then be used to estimate revealed preferences for the wetlands. Contingent Valuation: Survey residents of Los Angeles and directly ask them WTP/WTA for Ballona Wetlands, to obtain stated preferences. b) Dichotomous choice, WTP: Suppose there was a referendum requiring you to pay an extra \$50 in taxes this year, but would preserve Ballona Wetlands and prevent development. Would you vote for it? (Circle on of the following) YES NO (Different values would be included on different surveys) Payment Card, WTP: If the passage of a law to preserve the Ballona Wetlands cost you these amounts in taxes this year, what is the highest amount you would pay and still vote for the program? (CIRLCE THE HIGHEST AMONT THAT YOU WOULD STILL VOTE FOR THE

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## This homework help was uploaded on 02/19/2009 for the course AEM 4510 taught by Professor Shawhan,d. during the Spring '08 term at Cornell University (Engineering School).

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AEM_451_Problem_Set_Solutions - AEM 451/Econ 409 Suggested...

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