- Lecturer
- Hidano Noboru
- Place
- Thr5-6(W9-626) Intensive
- Credits
- Lecture2 Exercise0 Experiment0
- Code
- 68043
- Syllabus updated
- 2010/4/7
- Lecture notes updated
- 2010/4/7
- Access Index
-
- Semester
- Spring Semester
Outline of lecture
I intend to offer you the essence of cost benefit analysis and valuation methods for public policy and projects including revealed preference techniques for non-market goods, ordinal estimations for market goods and stated preference methods, such as contingent valuation, in environmental and ecological economics.
Purpose of lecture
I intend to offer you the essence of cost benefit analysis and valuation methods for public policy and projects including revealed preference techniques e.g. hedonic approach for non-market goods, ordinal estimations for market goods and stated preference methods, such as contingent valuation, in environmental and ecological economics. The basic microeconomics knowledge is required such as utility functions, optimization with constraints, i.e. LaGrange multiplier.
But the students who really want to study the foundations of economics are welcome and can get the methods to analyze human and economic behaviors by the help of mathematical modeling.
Plan of lecture
1: April 8 Introduction Chapter 1 and 2 hedonic, TCM , CVM, CE
What is willingness to pay?
Revealed preference and consumer窶冱 surplus
Schumacher窶冱 critics
Traditional hedonic history
Hedonic price and hedonic price function
2: April 15 Chapter 2 hedonic
Rosen窶冱 model
His economics model
3: April 22 Rosen's two stages method
and his followers
Brown and Rosen窶冱 and Scotchmer窶冱 criticism
4: May 6 Chapter 3 valuation measure, such as EV and two region general equilibrium model, Kanemoto窶冱 overestimation and equality theorem
capitalization, overestimation theorem
5: May 13 Chapter 4,5 equality theorem and Hidano窶冱 overestimation ratio
6: May 20 Specification of the model and its ranges
7: May 27 Large national project and overestimation ratio
8: June 3 Midterm exam and review
9: June 10 Several valuation examples in environmental economics
10: June 17 Chapter 6: CVM Contingent valuation methods and incentive compatibility
CVM Contingent valuation methods and incentive compatibility
History of stated preference
Incentive compatibility and referendum format
Green et al 窶s critics
Reciprocity in answering deliberate and truthful WTP
11: June 24
Development of hedonic method, spatial and Heckman nonparametric approach
12: July 1 Report making
13: July 8 Cost benefit
Fundamentals of cost benefit analysis
Utility functions, An assessment of river water quality improvement project in Sapporo city
14: July 15 Test and review
Textbook and reference
Hidano N (2002&2009) The Economic Valuation of the Environment and Public
Policy: A Hedonic Approach, Edward Elgar, 2nd print in 2009
CVM and compatibility
Donald Green, Karen Jacowitz, Daniel Kahneman, Daniel McFadden (1998) Referendum Contingent Valuation, Anchoring, and Willingness to Pay for Public Goods, Resource and Energy Economics, vol 20, issue 2, 85-116
Carson,Groves,List,Machina (2004) Probabilistic Influence and Supplemental Benefits: A Field Test of the Two Key Assumptions Underlying Stated Preferences, A paper presented at 13th European Conference of Environmental and Resource Economists, Budapest Pere Riera(2004)Incentive Compatibility in Stated Preference Valuation Methods: Some Positive Results, A paper presented at 13 th Annual Conference of European Association of Environmental and Resource Economists
CVM
Hidano,Kato,Izumi (2005) Reciprocity, Consequentiality and Willingness-to-Pay in Contingent Valuation: An Experimental Panel Analysis on Climate Changes. European Association of Environmental and Resource Economists (EAERE) 14th Annual Conference, June 23-26,
Bremen, Germany, pp.1-22.
Brookshire, D.S., Thayer, M.A., Schulze, W.D. & D'Arge, R.Cshire, (1982), Valuing Public Goods: A Comparison of Survey and Hedonic Approaches, American Economic Review, Vol.72, 165-193.
Hedonic approach : capitalization
Starrett, DA (1981), Land Value Capitalization in Local Public Finance; Journal of Political Economy, Vol.89, No.2, 306-327.
Kanemoto, Y (1988), Hedonic Prices and the Benefits of Public Projects, Econometrica, Vol.56, 981-989.
Hidano,N (2005) Estimating the Benefits of the Non-marginal Provision of Environmental Goods by Hedonic Measures, DP05-3, Department of Social Engineering, Tokyo Institute of Technology.
Scotchmer, S (1985), Hedonic Prices and Cost/Benefit Analysis, Journal of Economic Theory, Vol.37, 55-75.
Scotchmer, S (1986), The Short Run and Long Run Benefits of Environmental Improvement, Journal of Public Economics, Vol.30, 61-81.
Traditional hedonic
Sheppard, S (1999), Hedonic Analysis of Housing Markets, In Cheshire, P, E. Mills ed. Applied Urban Economics, Handbook of Regional and Urban Economics, Vol.3, Elsevier, 1596-1669.
Rosen, S (1974), Hedonic Prices and Implicit Markets, Product Differentiation in Pure Competition, Journal of Political Economy, Vol.82, 34-55.
Epple, D and H Sieg (1999),Estimating Equilibrium in Models of Local Jurisdictions, Journal of Political Economy, Vol.107, No.4, 645-681.
New development:
Sieg, H, VK Smith, HS Banzhaf, and R Walsh (2000), Estimating the General Equilibrium Benefits of Large Policy Changes: The Clean Air Act Revisited, NBER Working Paper 7744, NBER.
Ekeland, Ivar, James Heckman, and Lars Nesheim (2004)Identification and Estimation of Hedonic Models, The Journal of Political Economy, v.112, 2004, p. S60-S109.
Related and/or prerequisite courses
it is important for students who take this lecture to have basic knowledge
about undergraduate micro-economics.
Evaluation
Test
Comment from lecturer
Comments from lecturer
Office: W9-628 Office hours: about 30 minutes after each lecture
