RT Journal Article
SR Electronic
T1 Quasi Experiments, Hedonic Models, and Estimating Trade-offs for Local Amenities
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 413
OP 431
DO 10.3368/le.89.3.413
VO 89
IS 3
A1 H. Allen Klaiber
A1 V. Kerry Smith
YR 2013
UL http://le.uwpress.org/content/89/3/413.abstract
AB This paper evaluates whether the property value capitalization effects measured with quasi-experimental methods offer reliable estimates of 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 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. (JEL Q51)