The hpm would therefore be appropriate cv may also be

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Unformatted text preview: each problem. The data for each method are: • Damage costs (avoided): market prices or values of goods affected, relationship between pollution/damage and level of goods (dose ­response relationships). • Hedonic price method: real estate prices, measure of environmental amenity at each real estate parcel, other information on the real estate parcel. • Travel cost method: survey of visitors to the recreational site that includes cost of their visit. • Contingent valuation: survey of individuals’ willingness to pay for different levels of the environmental amenity. The advantages and disadvantages for each method are too numerous to list here. Please check the course reader or the slides. a) The governor of West Virginia has been asked to approve or deny permission for a wind farm to be built in a rural area of the state. The wind farm will disturb pretty mountain views in that part of the state. ANS: Principally, the wind farm will disturb “pretty mountain views” which are likely a feature of real ­estate values. The HPM would therefore be appropriate. CV may also be used, because we can always ask people what they think. You may also answer TCM: this method will work if a recreational site is nearby, but keep in mind that the mountain views likely have value beyond their contribution to the recreational site. No credit for damage costs avoided. b) The t...
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This note was uploaded on 01/15/2013 for the course EBF 200 at Pennsylvania State University, University Park.

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