Research Triangle Institute
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NBER Working Papers and Publications
|February 2018||Do Discrete Choice Approaches to Valuing Urban Amenities Yield Different Results Than Hedonic Models?|
with Martha L. Caulkins, Maureen L. Cropper: w24290
Amenities that vary across cities are typically valued using either a hedonic model, in which amenities are capitalized into wages and housing prices, or a discrete model of household location choice. In this paper, we use the 2000 Public Use Microdata Sample (PUMS) to value climate amenities using both methods. We compare estimates of marginal willingness to pay (MWTP), first assuming homogeneous tastes for climate amenities and then allowing preferences for climate amenities to vary by location. We find that mean MWTP for warmer winters is about four times larger using the discrete choice approach than with the hedonic approach; mean MWTP for cooler summers is twice as large. The two approaches also differ in their estimates of taste sorting. The discrete choice model implies that househ...
|December 2015||Household Location Decisions and the Value of Climate Amenities|
with Maureen L. Cropper, Martha Caulkins: w21826
We value climate amenities by estimating a discrete location choice model for US households. The utility of each metropolitan statistical area (MSA) depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household head’s birthplace. We use the estimated trade-off among wages, housing costs, and climate amenities to value changes in mean winter and summer temperatures. We find that households sort among MSAs as a result of heterogeneous tastes for winter and summer temperatures. Preferences for winter and summer temperatures are negatively correlated: households that prefer milder winters, on average, prefer cooler summers, and households that prefer colder winters prefer warmer summers. Households in the Midwest region, on ...
Published: Paramita Sinha & Martha L. Caulkins & Maureen L. Cropper, 2017. "Household location decisions and the value of climate amenities," Journal of Environmental Economics and Management, .
|February 2013||The Value of Climate Amenities: Evidence from US Migration Decisions|
with Maureen L. Cropper: w18756
We value climate amenities by estimating a discrete location choice model for households that changed metropolitan statistical areas (MSAs) between 1995 and 2000. The utility of each MSA depends on location-specific amenities, earnings opportunities, housing costs, and the cost of moving to the MSA from the household's 1995 location. We use the estimated trade-off between wages and climate amenities to value changes in mean winter and summer temperatures. At median temperatures for 1970 to 2000, a 1°F increase in winter temperature is worth less than a 1° decrease in summer temperature; however, the reverse is true at winter temperatures below 25°F. These results imply an average welfare loss of 2.7 percent of household income in 2020 to 2050 under the B1 (climate-friendly) scenario from t...
Published: Paramita Sinha & M Cropper, 2009. "The value of climate amenities: Evidence from migration decisions," IOP Conference Series: Earth and Environmental Science, vol 6(32).