Exploring the Spatial Heterogeneity of Residents' Marginal Willingness to Pay for Clean Air in Shanghai

Previous studies have paid little attention to the spatial heterogeneity of residents' marginal willingness to pay (MWTP) for clean air at a city level. To fill this gap, this study adopts a geographically weighted regression (GWR) model to quantify the spatial heterogeneity of residents' MWTP for clean air in Shanghai. First, Shanghai was divided into 218 census tracts and each tract was the smallest research unit. Then, the impacts of air pollutants and other built environment variables on housing prices were chosen to reflect residents' MWTP and a GWR model was used to analyze the spatial heterogeneity of the MWTP. Finally, the total losses caused by air pollutants in Shanghai were estimated from the perspective of housing market value. Empirical results show that air pollutants have a negative impact on housing prices. Using the marginal rate of transformation between housing prices and air pollutants, the results show Shanghai residents, on average, are willing to pay 50 and 99 Yuan/m2 to reduce the mean concentration of PM2.5 and NO2 by 1 μg/m3, respectively. Moreover, residents' MWTP for clean air is higher in the suburbs and lower in the city center. This study can help city policymakers formulate regional air management policies and provide support for the green and sustainable development of the real estate market in China.

Willingness to Pay for Wine Bullshit: Some New Estimates

As part of a classic article in this journal, Richard Quandt identified 123 wine descriptors that he deemed to be bullshit. In this paper, I examine whether wine consumers are willing to pay any more (or less) for wine if it is described by one of those “bullshit” descriptors. I use three methods to examine that. The first method involves applying a hedonic regression to a dataset of prices and expert descriptions for about 50,000 wines. The second method involves applying a matching estimator to the same dataset. The third method involves a stated-preference survey of about 500 wine consumers. The three methods suggest that for most of the descriptors Quandt deemed to be bullshit, most consumers’ marginal willingness to pay for a descriptor is zero or near-zero. Yet, for some of the descriptors, some consumers do seem to have a non-zero marginal willingness to pay, perhaps because the descriptors shape a consumer's subjective experience or because they signal objective aspects of wine. (JEL Classifications: D12, D83, L66)

Investigating Consumers’ Preference for Acrylamide-Free Cassava Snacks

As potato chips are often found to contain a carcinogen, called acrylamide, less-risky chips can alternatively be made from cassava. This study aims at examining consumers’ preference and the factors determining their marginal willingness to pay for acrylamide-free cassava chips. The study is undertaken based on questionnaire surveys with 1077 respondents from all six regions of Thailand. Various socio-economic characteristics, and behavior and perception on relevant issues are included in the OLS estimations of marginal willingness, acting as independent variables. The study finds that people show their preference for acrylamide-free cassava chips, and are willing to pay a premium price of THB 5.86, on average. The results also statistically present, among others, the positive explanatory power of persons’ perception about food safety, especially the dangers of acrylamide, and the size of family on the preference of cassava chips. Adult consumers and those from the northeastern region surprisingly reveal an unfavorable willingness to pay more for non-acrylamide cassava chips. Moreover, the availability of sale promotion can encourage consumers to pay more for healthier cassava chips. The findings should allow producers to understand consumers’ buying behavior and their preference for cassava chips as a substitute product; in turn, this should help to commercialize these products in the wider market.

Estimation of the Values of Wooden Materials in Urban Regeneration: The Case of Seoullo in Korea

The importance of wooden buildings has been highlighted in recent years due to the energy-efficient and carbon storage effect of wood. This study investigates the willingness to pay for one-time tax payments of the citizens currently living in Seoul when Seoullo uses wood as a material for covering the surface of the facilities. The study examines the economic feasibility of Seoullo, which is a part of the government urban regeneration project that built a park on the desolate bridge in 2017. The result indicates that Seoul citizens who participated in the survey feel a greater preference for wood material rather than existing concrete used in Seoullo despite the tax burden. As a result, it is found that the respondents with children under the age of 8, respondents who are aware of the urban regeneration project, and respondents with respiratory disease have a lower marginal willingness to pay than those in the opposite groups. Moreover, the result shows that the respondents who consider farming or returning to rural areas, respondents in need of city improvement, respondents who chose wood as a preferred building material, and respondents with the experience of visiting Seoullo have a greater marginal willingness to pay for the wooden material than those in the opposite groups.

Modelling Students’ Preferences for Mobile Telecommunication Plans: A Discrete Choice Experiment

Aims: We employed a discrete choice experiment (DCE) to investigate students’ preferences for mobile telecommunication plans in a South African University. Study design: Locally optimal DCE were constructed for our choice sets using readily available ideas from blocked fractional factorial designs. This is in contrast to other approaches that may be more complex practically especially when the number of attributes is large. Place and duration of study: The study was conducted in August 2017 at the University of KwaZulu-Natal, Edgewood Campus, Pinetown, South Africa. Methodology: Four hypothetical mobile telecommunication companies were considered and the selected attributes were call rate, data speed, customer service, premiums and network coverage. A two-stage sampling technique was used to select 180 respondents from the student population and data were collected via face-to-face interview. A blocked fractional factorial design in blocks each of size four was used to generate the choice sets used to obtain information from the respondents. An extra choice set was included to ascertain the consistency of the choices. Proportion of rational respondents was computed. Multinomial logit model was used to analyze the data and marginal willingness to pay estimates was obtained for the attributes. Results: The proportion of “rational” respondents was 74%. At 0.1% level of significance, the students valued all the attributes except data speed in the process of choosing a particular mobile network. Furthermore, marginal willingness to pay estimates showed that students preferred to pay 51 cents more per minute to have very good customer service. They also preferred to pay extra 13 and 45 cents per minute for more premiums and better network coverage respectively. Conclusion: The results provide empirical evidence of what students perceive as the most important factors influencing their choice of mobile network service providers and these may have decision-making implications for South African-based telecommunication companies.

Using Stated Preference Valuation to Support Sustainable Marine Fishery Management

This study uses a random parameters logit (RPL) model to estimate the Taiwanese preference for northern shrimp (NS) products (NSP) with the Marine Stewardship Council (MSC) label. The estimated results show that, ceteris paribus, the marginal willingness to pay (MWTP) of Taiwanese consumers for NSP with the MSC label is up to New Taiwan dollar (NTD) 84.86 in comparison to products without the label. Moreover, the price of MSC-labeled NSP has a positive effect on the quantity demanded by Taiwanese consumers. They also prefer products in smaller packages and with shorter certification periods. The positive effect can be explained by the Veblen effect or the fact that sometimes prices are perceived as signals of product quality. However, the effects of preference for smaller packages and shorter certification periods are minimal compared with the effects of preference for MSC-labeled products. When consumers are unfamiliar with products or labels, a high price is a viable marketing strategy. However, the advantage cannot sustain the promotion of products and labels.

Estimating coastal premiums for apartment prices: Towards a new multilevel modelling approach

This article attempts to assess ‘coastal premiums’ for apartment prices in Corsica, France. The coastal premium should consist of two parts, those related to the view of the Mediterranean Sea, and those associated with living close to beaches for access purposes. Views, being a qualitative and subjective variable, are difficult to measure and quantify. Further, apartments are located in neighbourhoods and then are situated in districts or at more aggregated levels. This induces complex spatial interactions. To deal with these, we first employ a viewshed analysis implemented in geographical information systems (GIS) to generate an objective, continuous measurement. We then develop a Bayesian spatial/spatiotemporal multilevel model, which integrates Leroux’s conditional autoregressive process with multilevel modelling for conducting a hedonic analysis in the presence of multiple-scale housing data. Since the developed model pertains to latent Gaussian models, estimation is carried out by integrated nested Laplace approximations. The results demonstrate that homebuyers have a higher marginal willingness to pay for larger views of the sea, and proximity to beaches produces positive impacts on apartment sale prices. Further, strong spatial spillovers emerge among high-level units, but heterogeneity dominates among apartments. Our findings illustrate the importance of coasts to homebuyers. Further, the estimated value permits planners and policymakers to assess the trade-off between developing and preserving land along the coast.

How does air pollution affect housing rental prices in Chile? An economic assessment of PM2.5 concentration across Chilean communes

This paper addresses a serious environmental concern in Chile: PM2.5 concentration, a health threat especially affecting the population living in the central and southern communes of Chile. Using housing data for 312 spatial units, along with interpolation techniques to predict air pollution for communes with missing information, we find that, on average, 1 μg/m3 increase in PM2.5 produces a decrease of 4.1 per cent in housing rental prices. These estimates also show an important upward bias in the estimated coefficient when the endogeneity of air pollution is not addressed. An average Chilean household would be willing to pay US$12.31 per month for a one-unit reduction in PM2.5 concentration. Similar monetary values have been found in previous studies for both México and Chile. As with PM2.5 concentration, the average marginal willingness to pay exhibits marked differences across communes. From these results, the study addresses some policy implications and proposes avenues for future research.

Valuing the Impact of Air Pollution in Urban Residence Using Hedonic Pricing and Geospatial Analysis, Evidence From Quito, Ecuador

Air pollution is one of the hazardous effects of urbanization. Hereby, one the most polluted cities in Ecuador is the Metropolitan District of Quito (DMQ). This study attempts to determine the marginal willingness to pay for a cleaner air in the DMQ using the impact of air pollutants on price properties. Spatial interpolation techniques visualized pollutant concentrations in the DMQ. Additionally, a hedonic price model estimated air pollution impact on properties. Results demonstrated hazard levels for at least three pollutants, being Particulate Matter PM2.5, Nitrogen Dioxide NO2, and Sulfur Dioxide SO2. Subsequently, the economic impact on the house market was statistically significant with a decrease in property value between 1.1% and 2.8%. These drop of value between 1,846.20 up to 4,984.74 US$ (United States Dollars) represents a substantial loss in property value for the DMQ and loss of revenues for the city.