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Public Policy and Project Valuation
( Hidano Noboru  )


Thr 5-6Session W9-626

Credits  Lecture:2  Practice:0  Experiment:0 / code:68043
Update : 2012/4/8
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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. It should be noted that all students except students who are registered as part time
students, i.e. Shakaijin ,have to take normal class in English. Shakaijin students must
e-mail me by 14th of April 2012 in order to know the schedule of the class. Those who do
not attend the first class cannot get credit of this subject.
Plan of lecture
1: April 12 Introduction Chapter 1 and 2 hedonic, TCM , CVM, CE
What is willingness to pay?
Revealed preference and consumer’s surplus
Schumacher’s critics
Traditional hedonic history
Hedonic price and hedonic price function
2: April 19 Chapter 2 hedonic
Rosen’s model,His economics model,April 22 Rosen's two stages method and his followers
Brown and Rosen’s and Scotchmer’s criticism
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

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