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Chesapeake Bay Hedonic Analysis

Chesapeake Bay Hedonic Analysis. Patrick Walsh Charles Griffiths Dennis Guignet Heather Klemick David Simpson US EPA: National Center for Environmental Economics. Introduction. Property Values in the Chesapeake Bay Two main phases First phase: county level analysis in MD along the Bay

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Chesapeake Bay Hedonic Analysis

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  1. Chesapeake Bay Hedonic Analysis Patrick Walsh Charles Griffiths Dennis Guignet Heather Klemick David Simpson US EPA: National Center for Environmental Economics

  2. Introduction • Property Values in the Chesapeake Bay • Two main phases • First phase: county level analysis in MD along the Bay • Spatial Dependence • Multiple indicators of water quality • Two stage hedonic analysis • Second phase: broader parts of MD, VA, DC, DE. • May eventually expend, depending on data availability.

  3. Background Literature • Past hedonic analyses of WQ • Brashares (1985) • Steinnes (1992) • Michael et al. (1996) • Boyle et al. (1999) • Michael et al. (2000) • Boyle and Taylor (2001) • Poor et al. (2001) • Gibbs et al. (2002) • Krysel et al. (2003) • Walsh et al. (2011) • Hedonic Analyses of WQ in Chesapeake Bay • Leggett and Bockstael (2000): Fecal Coliform • Poor et al. (2007): “Ambient” water quality : Total Inorganic Nitrogen, TSS

  4. Data • Phase I: MD PropertyView • Full set of MD parcels • 1996-2011 property sales • GIS maps, Land Use Data • Phase II: DE, DC, VA

  5. Water Quality Data • Interpolated WQ data from Chesapeake Bay Program Office • 1 km x 1 km cells • Multiple Depths • TN, TP, TSS, Chl a, DO, Clarity • Monitoring Stations • ~200 Stations throughout watershed • Watershed Model • Reach-level: larger segments of rivers/streams • Local Data • Anne Arundel County Fecal Coliform, beach closures • Montgomery County Tree Canopy • Link homes to nearest waterbodies via GIS • Control for density of water nearby

  6. Representing Water Quality • What endpoints do people care about? • Policy levers versus perceptions? • Objective versus subjective measures • Temporal range of indicator • Annual value most common • Also, trends in WQ • Similar to Michael et al. (2000). • Later link to survey data. • Ask about WQ perceptions

  7. Methods • First stage – estimate implicit prices, marginal willingness to pay • Second Stage – use implicit prices to estimate demand function • Non-marginal benefits • Spatial Econometrics to control for spatial dependence • Double Counting

  8. Benefits • Projections • Future forecasts for interpolated cells • Watershed model forecasts (at a less granular level) • Use estimated demand function to calculate benefits

  9. Extensions • University of Vermont detailed canopy analysis in Montgomery County • Increased tree planting as part of TMDL • Pfisteria outbreaks • Several highly publicized cases • Algae blooms • Fish kills • Sickness from exposure

  10. Thank You

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