تناسب مدل های لذت باورانه برای تجزیه و تحلیل هزینه و سود: شواهدی از جریان های تخفیف

We compare two estimates of benefits arising from the construction of new bridges in south-west Norway. One estimate comes from a hedonic property value model. Rather than follow an approach which is strictly theoretically correct, we adopt Rosen’s simple first-stage approach. To investigate and validate whether this simplified approach gives a reasonable estimate, we compare it to an estimate derived from a travel demand model. We find that a variant of an ex post hedonic house price model gives very similar estimates to the estimates from the travel demand model. This supports a hypothesis that the simplistic hedonic approach is reasonable.

One important function of economists is to provide guidance to policy makers on whether a particular investment should be undertaken. Usually, this advice will be given to decision makers within the public sector. One of the main problems of appraising projects within the public sector is that many of the costs and benefits will come in the form of local public goods, which are not usually traded in markets. A number of approaches have been developed to value such costs and benefits (Haab and McConnell, 2002). However, it is difficult to be confident that reliable estimates have been obtained. Despite many of these different approaches having a sound base in theory, all of them require certain assumptions to hold. It can be difficult to know the degree to which such assumptions have been met, as well as how important any deviations might be for the final result. One way of increasing the confidence in an estimate would be to compare it to an estimate of the same quantity derived using a different method and different data. In this paper, we are concerned with capturing one of the benefits of a road investment project. In particular, we are interested in valuing the changes in labour-market accessibility brought about by the opening of two new road bridges connecting two islands. We take two different approaches to the valuation. Firstly, we use the standard approach of estimating the demand for commuting and then calculating the value of time savings for existing and new road users. Secondly, we use the hedonic property price approach to value this same public good. A similar result from both would give confidence that either method is appropriate for measuring such benefits. Obtaining a similar result from the two methods mentioned above should not be surprising from theoretical perspective. When all of the assumptions of the underlying models are met, they should be measuring the same benefit. Of course, in reality, these ideal theoretical conditions are never met exactly. This leaves practitioners facing uncertainty about the best way to proceed. Both of the approaches adopted in this paper use a very simple approach to calculating the benefit, rather than the more demanding (and potentially impracticable) theoretically robust approaches. When we find that both approaches used here give similar estimates under these conditions, it suggests that a simple approach to benefit estimation can give reasonable approximations. Surprisingly little research of this type has been undertaken to our knowledge (Kuminoff et al., 2010). Filling this gap is important, since both methods are used to help policy makers to make more informed decisions. It would be beneficial to practitioners to know how robust different valuation techniques are. It would also be useful to know when certain short-cuts can be taken with methods without compromising the results, given that such short-cuts are often taken without fully understanding their implications. It is vital to know when such short-cuts are likely to seriously undermine any estimates made. We believe our empirical approach of verifying an estimate by using two different methods is a good way to proceed in answering such questions. The paper is structured as follows. Section 2 outlines the study area and the infrastructure which we consider. Section 3 provides the theoretical foundation for the benefit estimations which we carry out. We cover travel demand and hedonic models in this section. Section 4 provides some detail on how we estimate a commuting demand function and construct a demand curve. This is then used to estimate the benefit of the infrastructure improvement. Section 5 presents the empirical hedonic model we use and the housing data used to estimate it. This section also contains details on how we estimate the relevant benefits arising from the infrastructure improvement and the estimation results. Finally, Section 6 compares the two estimates and provides some concluding remarks. In the hedonic house price literature, a local public good such as labour-market accessibility may also be called a locational attribute, characteristics or an amenity. These terms will be used interchangeably in the following sections.

We have estimated the benefits arising from the improved labour-market accessibility brought about by the opening of Trekantsambandet, using two different methods. The traditional approach, using demand curves estimated using commuting data, gave an estimate of 118,430,719 NOK (€14,871,737) in 2006 prices. The hedonic house price approach which was closest to this result gave an estimate of 100,484,404 NOK (€12,623,669) in 1998 prices. Inflating this using the harmonised index of consumer prices (HICP) to 2006 prices gives an estimate of 116,776,092 NOK. This gives a difference of 1,654,627 NOK between the two estimates. The results show that a pooled model provides results that are remarkably similar to the measures of TWTP from the commuting model. This is particularly so for the Pooled model after the realisation of the investment where we account for the fact that some parameters have changed their values over time. The Before model and the before Pooled model provide higher estimates of TWTP than the after models. This result is in line with theoretical assumptions. It should also be noted, however, that our study represents the result from one single study area and we do not account for transaction costs. In this way, the paper provides the first step in a research agenda aimed at examining empirically the impact of taking certain theoretical short-cuts. A number of short-cuts have been taken to simplify the benefit estimation process. With regard to the hedonic model, we dispense with Rosen’s second step, which is difficult to implement inter alia due to data requirements. Instead, we use only the far more convenient, and more widely applied, first step, even in a situation with non-marginal changes in an attribute affecting a relatively large number of dwellings. In the commuting model, we estimate the consumer surplus from the Marshallian demand curve. We assume, as do most applied studies, that income effects are negligible and that the Marshallian and Hicksian demand curves coincide. We find that the two methods give very similar estimates, supporting a hypothesis that the short-cuts taken may in certain situations have little practical impact. This is particularly so in housing markets that are homogeneous, such as the one considered here, and when using pooled time series and cross-sectional data stretching over a long time period. The next step in this research agenda is to replicate the study in different geographical areas. With a larger number of studies, it will be possible to do a meta-analysis and to try to understand what factors influence the results. For instance, is there something special about the rural and semi-urban region we study here which gives the results we find, or could it for instance be found in study areas that are less homogeneous? Once we understand what determines the success or failure of a particular short-cut, we can provide practical guidance to practitioners about how to proceed. Such advice can simplify the process of valuation in some cases, and prevent unjustified use of the methods in others.