SEMINAR 25 June 2012: V. Kerry Smith, Arizona State University

Quasi Experiments, Hedonic Models, and Estimating Tradeoffs for Local Amenities

Monday, June 25, 2012 - 13:00 to 14:00

Quasi Experiments, Hedonic Models, and Estimating Tradeoffs for Local Amenities

Abstract

This paper evaluates whether the property value capitalization effects measured with quasi-experimental methods offer reliable estimates of the willingness to pay for changes in amenities. We propose the use of a market simulation as a robustness check. Two applications establish the method’s relevance. The first examines the conversion of land cover from desert to wet landscape. The second examines the cleanup of hazardous waste sites. We find that even when quasi-experimental methods have access to ideal instruments their performance in measuring general equilibrium willingness to pay cannot be assumed ideal. It needs to be evaluated considering the specific features of each application.

 Key words: Quasi-experimental methods, willingness to pay, calibration, robustness analysis

JEL Codes: C21; D61; Q51

The page was last edited by: Communications // 06/18/2012