(Georgia Institute of Technology, 2004-11-21)
Gen, Sheldon
Cost-benefit analysis has long been a dominant method of policy analysis. When applied to policies affecting the environment, however, it faced a serious problem. Many policies exert environmental impacts that are external to market transactions, so the values of these impacts resist monetary measurement. This shortcoming in cost-benefit analysis led some researchers to develop indirect and nonmarket methods of valuing environmental goods monetarily. They include the travel cost method, hedonic pricing, and contingent valuation. The popularity of these methods has grown since their inceptions, but so have controversies over their use. Economists and others have taken all sides of the debate over the validity of the methods and their normative implications. These methods popularity and controversies necessitate their critical evaluation. This research fills this need through an extensive meta-analysis of 228 existing environmental valuation studies representing the contemporary practices in each method, and capturing varieties of environmental goods and settings. The analysis tested the convergent validity of the three valuation methods, and measured the moderating effects of select variables. The results show that effect sizes of the hedonic pricing and travel cost methods converge, but contingent valuation produces effect sizes that average 40% to 55% less than the other two methods. This difference varies significantly with the environment good being valued. Other significant moderating variables include the magnitude of the environmental change, the description of the change, and the location of the study. The year of study does not significantly moderate effect sizes. These results supplement descriptive and normative frameworks for environmental valuation described by Barbier (1994), Navrud and Pruckner (1997), and Norton (1995). When the evidence and these frameworks are considered together, the defensible uses of these three valuation methods become very limited. Valuation efforts should focus on multiple dimensions of environmental value, besides economic dimensions, that reflect ecological health and public concerns for the environment.
(Georgia Institute of Technology, 2004-07-12)
Zia, Asim
When confronted with decisions involving the provision of environmental resources, such as clean air, do individuals act cooperatively with societal regulations? This study employs a quasi-experimental design to investigate the cooperative and non-cooperative actions of high-emitting vehicle owners that arose in response to the Inspection and Maintenance (IM) program in the Atlanta airshed. The impact of cooperative and non-cooperative actions of high-emitters on vehicular tail-pipe emissions, such as carbon monoxide (CO), hydrocarbons (HC) and oxides of nitrogen (NOx), is quantified. Furthermore, the hypothesis that high-emitters have significantly higher odds of residing in lower income neighborhoods as compared to the normal emitters is also tested.
A remote sensing sample of approximately 1.42 million vehicles observed on-road between 1997 and 2001 is matched with IM program data and vehicle registration data to identify the cooperative and non-cooperative high-emitters. A mixed-pool time-series regression analysis is undertaken to estimate changes in vehicular tail-pipe emissions due to the actions of high-emitters. The information about the socio-economic and demographic contextual conditions of the sampled vehicle owners is ascertained from 2000 census data.
Approximately 42% of the high-emitting vehicle owners are found to be cooperative and 58% non-cooperative. The cooperative actions caused a decrease of 47% in HC emission factors during 1997 and 2001. There is no statistical difference between the CO and NO emission factors of vehicles owned by cooperative and non-cooperative high-emitters. Results also suggest that the high-emitters live in 4.4% lower median household income areas as compared to the normal emitters in the Atlanta airshed.
Changes in the current IM program rules and vehicle registration laws could improve air quality. Such changes include disallowing IM test failures from registering anywhere in the state of Georgia and requiring an IM test on every change of vehicle ownership inside the IM program area. Better incentive mechanisms for high-emitters can also be designed. The evidence from this study is expected to aid policy-makers to adapt the incentive mechanisms of IM programs, in particular, and environmental regulations, in general, so that public policies are both more effective and equitable in their societal impacts.