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The Demonstration and Capture of an Ecosystem Service Value: Three Different Methodological Approaches

  • Author / Creator
    Kim, Hyun N
  • Water management can generate valuable ecosystem services but can be costly to implement. This dissertation examines this issue using irrigation water storage infrastructure which has provided desirable services to residential properties in the Town of Chestermere in Alberta, Canada. Based on concerns regarding fluctuations in water quality and quantity a Water Management Agreement (WMA) was struck between the irrigation agency and the town to stabilize lake conditions in 2005. The first study uses quasi-experimental hedonic property approaches to estimate the subsequent impact of the WMA on shoreline property values. We find that property values significantly increased as a result of the agreement and that the additional property tax revenues arising from these values are large enough to offset the annual service fees paid to the irrigation agency. The second study extends discrete residential choice models by incorporating choice set formation. In this second study we explore several formulations of endogenous choice sets in which the decision maker’s selection of a choice set is based on certain attributes and the final selection is made from this reduced choice set. The proposed approach is empirically applied to a housing transaction dataset and welfare measures are generated for non-marginal changes associated with a water management policy. We find that the models that approximate choice set formation improve the efficiency of estimation and influence estimated welfare measures suggesting the importance of choice set formation in the context of discrete housing choice models. The third study extends the stated housing choice literature by examining the issue for unobserved components of utility that may arise from use of a pivot-style dataset. The particular focus of this study is on examining the influence of experimental design methods on the variance of hypothetical choice alternatives simultaneously. We find presence of heteroscedasticity across choice alternatives. However, we do not find the evidence that design differences influence the unobserved parts of the utility function. A comparison of models across different model specifications shows that model parameters and welfare measures are sensitive to how to specify the model structures suggesting the need of precautions when dealing with the data generated by pivot-style designs.

  • Subjects / Keywords
  • Graduation date
    2015-06
  • Type of Item
    Thesis
  • Degree
    Doctor of Philosophy
  • DOI
    https://doi.org/10.7939/R39M2M
  • License
    This thesis is made available by the University of Alberta Libraries with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.
  • Language
    English
  • Institution
    University of Alberta
  • Degree level
    Doctoral
  • Department
    • Department of Resource Economics and Environmental Sociology
  • Specialization
    • Agricultural and resource economics
  • Supervisor / co-supervisor and their department(s)
    • Boxall, Peter (Resource Economics and Environmental Sociology)
  • Examining committee members and their departments
    • Mohapatra, Sandeep (Resource Economics and Environmental Sociology)
    • Adamowicz, Vic (Resource Economics and Environmental Sociology)