Environmental Engineering Reference
In-Depth Information
Fig. 2 Part-worth utilities
for PLUBF
Table 5 WTP estimates with
delta-method (based on M1)
Variable
Coefficient
St.Err.
T-Stat
LUB/EF
0.362
0.064
5.64
PLUBF/EF
0.496
0.066
7.47
is large relative to its mean and this is not the case for our results given that the
cost coefficient is strongly significant and no skewness risks are incurred.
13
Table
5
and
6
report the WTP estimates respectively for M1 and M2. In both
cases all the reported estimates are statistically significant and, with reference to
M2, non-linear effects are clearly evident.
To interpret the meaning of coefficients' estimates one has to recall that for
estimation purposes and in order to avoid measurement unit effects (e.g. LUB
absolute numbers -400, 800, 1.200-; PLUBF PBP -10, 20, 30-; EF Euros -200€,
400€, 600€, 800€, 1,200€-), it is advisable to normalize all the variables so to
sterilize the unit of measurement effect.
Notwithstanding the considerations above we deem useful to explain in detail
how the monetary WTP were calculated so to facilitate interpretation. For instance
(with reference to M1), as it is for LUB, departing from a normalized WTP of
0.362 and wanting to know the amount of money the interviewees are willing to
pay for an additional LUB one has to perform the following calculations: 0.362 *
(200€/400LUB) = 0.18€/LUB
whereas
for
PLUBF
we
have
0.496
*
(200€/
10PBP) = 9.93€/PBP.
At this point from a policy perspective it is interesting to compare two different
policies that guarantee, in alternative ways, equal results. In more detail, one can
compare how much people are willing to pay to have an extra LUB free either via
additional LUB construction or via increased probability of finding a LUB free. In
order to perform the comparison one has to recall that, taking the SQ as a
13
Notwithstanding the above made considerations we think it would be interesting to test under
which conditions each of the three methods provides the best results. We are presently working
on a paper specifically addressing this issue using both simulated as well as real data.
Search WWH ::
Custom Search