Ps4 - Department of Agricultural and Resource Economics University of California at Berkeley ENV ECON 101/ECON 125 David Zilberman Homework No 4 1

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Department of Agricultural and Resource Economics ENV ECON 101/ECON 125 University of California at Berkeley David Zilberman Homework No. 4 1. Hedonic prices. Table 1 presents the prices of properties of four types of houses: Type of house Price (dollars) View Indoor space (square feet) Outdoor space (square feet) 1 300,000 No 1,000 2,000 2 500,000 No 1,500 7,000 3 360,000 Yes 1,800 2,000 4 600,000 Yes 1,200 4,000 a. Derive from these prices and properties the implicit price of indoor and outdoor space at locations with and without a view. b. What is the gain from a view for a proposed house with indoor space of 1,000 square feet and outdoor space of 1,500 square feet? Give short answers to the following questions: c. Is willingness to pay for environmental amenity greater than the willingness to accept? Why? d. What is a contingent valuation technique? Identify one of its weaknesses. 2. Prior appropriation rights. The demand for water with prior appropriation rights is: PX =- 10 where pumping costs is zero, prior approximation price is zero, and X = 10.
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This note was uploaded on 08/01/2008 for the course ECON 101 taught by Professor Wood during the Spring '07 term at University of California, Berkeley.

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Ps4 - Department of Agricultural and Resource Economics University of California at Berkeley ENV ECON 101/ECON 125 David Zilberman Homework No 4 1

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