PS_6_2008_Problem Set

PS_6_2008_Problem Set - Assignment#6 Environmental...

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Assignment #6 Environmental Economics ECON 409 / AEM 451 Distributed April 26, 2008;  due in person or in Dan Shawhan’s Warren room 105 mailbox by 3 pm Thursday, May  1. Reminder:  our May 1 class will be in Warren 401 starting at 2:30. You are welcome to work with others, but your write-up must be your own. You may want to do problem 2 before problem 1, so that you have a more intuitive  understanding of the hedonic approach when you discuss it in problem 1. 1.  Environmental valuation:  Three methods of valuing non-marketed goods The Dreamworks movie company is seeking to buy the Ballona Wetland from the City of  Los Angeles and replace it with a major film studio. 1   The Ballona Wetland is the only  major wetland remaining in Los Angeles.  The wetland is home to diverse aquatic and  bird life.  It is cherished by many people who live near it and it attracts visitors from all  parts of Los Angeles.  The City Council is willing to sell, but wishes to set the price  equal to the estimated net damages to all (human) parties other than Dreamworks.  That way, Dreamworks will choose to buy the land only if its private net benefit of  locating the studio there is greater than the net damages to others.  You are the chief  staff economist of the City Council.  As part of the calculation of the net damages to all  parties other than Dreamworks, you need to estimate the damage from the elimination  of the wetland.  Among the three approaches for valuing the site are the travel cost  approach, hedonic approach, and contingent valuation approach. a) For each of the three approaches just mentioned, explain in a few sentences how 
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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.

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PS_6_2008_Problem Set - Assignment#6 Environmental...

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