MEASURING LAND-USE EXTERNALITIES

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 0212669
• Project Start Date: Jul 1, 2007
• Project End Date: Sep 30, 2013
• Program Code: [(N/A)]- (N/A)

Recipient Organization
NORTH CAROLINA STATE UNIV
(N/A)
RALEIGH,NC 27695

Performing Department
Agricultural and Resource Economics

Non Technical Summary
Suburban flight in the twentieth century left formerly dense and vibrant urban cores in decay. Most metropolitan areas lost population in the latter half of the nineteenth century, with this trend only recently changing in a modest way (Bruegmann, 2005). For instance, in the 1990s, most southeastern cities grew heavily at their outer edges, annexing land in the process. Only Atlanta, Georgia, which undertook intensive downtown revitalization efforts, recorded growth in the urban core during this same period. While densification of urban areas is generally seen as a desired outcome (Nelson and Dawkins, 2004), there are many challenges for achieving this goal. One such challenge is the obstacle that locally undesirable land uses or LULUs present as impediments to the revitalization of urban areas. Among the list of LULUs are environmentally contaminated properties, abandoned and derelict properties, some commercial and industrial activities, and large-scaleinfrastructure such as airports, highways, and railroad and public transit corridors. To the extent LULUs hinder redevelopment of the urban core, and densification of suburban areas, sprawl at the exurban fringe leads to losses of agricultural land, forest, and natural areas at rates to satisfy increasing population. In addition, development results in simplified biodiversity, degraded natural habitats, modified watershed functioning and can result in the introduction of exotic and invasive species (Hansen et al., 2005).

Animal Health Component

(N/A)

Research Effort Categories

Basic

(N/A)

Applied

(N/A)

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
605	0120	3010	10%
605	0530	3010	10%
605	5320	3010	10%
605	6099	3010	10%
605	6110	3010	10%
608	0120	3010	10%
609	0120	3010	10%
609	5320	3010	10%
609	6099	3010	10%
609	6110	3010	10%

Knowledge Area
605 - Natural Resource and Environmental Economics; 608 - Community Resource Planning and Development; 609 - Economic Theory and Methods;

Subject Of Investigation
6110 - Economy of the United States and sectors thereof; 0120 - Land; 5320 - Houses (human residences), furniture, household equipment, non-textile furnishings; 6099 - People and communities, general/other; 0530 - Parks and urban green space;

Field Of Science
3010 - Economics;

Keywords

suburban flight

densification

lulus

open space

urban amenities

Goals / Objectives
Objectives: This research consists of several broad objectives: 1. To integrate stated and revealed preference models of housing demand in a consistent theoretical and empirical framework to better understand the impacts of locally undesirable land uses. In particular, to fully exploit the fact that choice experiment conjoint surveys and hedonic property models both reflect the same choice process. While each requires maintained assumptions to identify the demand for environmental characteristics, the structure imposed on one may be applied to the other for consistent estimation and comparison of results. 2. To pursue a variety of applications of relevance for managing urban growth in North Carolina. Examples of land uses that may be investigated as hindrances to urban redevelopment include environmentally contaminated sites, transportation infrastructure, hog farms, and commercial and industrial activities thought to be nuisances for residential neighbors. Examples ofland uses that may be investigated as stimulants for urban redevelopment are urban parks and local cultural sites such as historic buildings and arts venues.

Project Methods
Procedures: Several activities must be undertaken to achieve the objectives. The first is methodological and progress here will build on newer approaches to demand estimation in heterogeneous goods markets (e.g., Bajari and Benkard, 2005) to theoretically and empirically link the two sources of information regarding housing choice. Data collected by Braden, Taylor and Won (2006 and 2007) will be used to implement the methods in the near term within the context of hazardous wastes and their impacts on neighborhoods. The second objective requires further expansion of the applications to the valuation of other LULUs with an emphasis on North Carolina. Within the context of the regions such as the Triangle which experience the highest suburban and exurban growth, data collection continues to be necessary. A variety of data must be compiled including property transactions data, survey data, and geographical information data on properties and LULUs so spatial relationshipscan be accurately defined. Related data have been collected for the Research Triangle region within North Carolina in the past by colleagues at NCSU. Drs. Phaneuf (Agricultural and Resource Economics) and Palmquist (Economics) have collected similar data for Wake, Durham and Orange counties (and see Phaneuf et al., forthcoming). While this data can serve as a platform to begin data collection, updating and expansion of the data would be necessary to carry out the projects described in this proposal.

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Nothing Reported Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals?Continue to develop new research.

Impacts
What was accomplished under these goals? In addition to publishing, research was begun on new projects (e.g.,"Disentangling the Property Value Impacts of Environmental Contamination from Locally Undesirable Land Uses: Implications for Measuring Post-Cleanup Stigma")

Publications

• Type: Journal Articles Status: Published Year Published: 2013 Citation: Amenity Values of National Wildlife Refuges: An Analysis of Urban Residential Property Values (with Xiangping Liu*, Timothy Hamilton* and Peter Grigelis*), Ecological Economics, 94: 37-43, 2013.

Progress 10/01/11 to 09/30/12

Outputs
Target Audience: Nothing Reported Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?I supervised eight PhD dissertation committees (four as Chair, one as co-Chair, three as a member) and also supervised four PhD students on research projects that are separate from their dissertations. I co-chaired one M.A. thesis. I also co-organized a two-day workshop in August 2012, Camp Resources, which brought together 55 faculty and PhD students from around the country. Students presented their research in a conference-style format and received comments from faculty (and students) in the audience. I am co-PI on an external grant from the US EPA which provided in support for this workshop. I organized the CEnREP Luncheon Colloquium for the spring and fall semesters in 2012. Nine colloquia were held in 2012 with presentations from faculty and students from ARE, Economics and Forestry. Average attendance was approximately 20 individuals with general mix of 50% faculty and 50% graduate students. How have the results been disseminated to communities of interest?Through conference presentations including: American Economics Association Annual Meetings, January 2012. Association of Environmental and Resource Economists Annual Conference, June 2102. European Association of Environmental and Resource Economists Annual Conference, June 2012 (2 presentations). University of Stirling, Scotland, Environmental Camp (Keynote Speaker), Sept 2012. Georgia State University seminar series, October 2012. Association of Public Policy and Management Annual Conference, November 2012. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? I published and disseminated through conferences and classroom teaching new ways of modeling land use and valuing natural assets via property markets.

Publications

• Type: Journal Articles Status: Published Year Published: 2012 Citation: Hypothetical Bias in Choice Experiments: Is Cheap Talk Effective at Eliminating Bias on the Intensive and Extensive Margins of Choice?, Journal of Economic Analysis & Policy, Vol. 12: Issue 1 (Contributions), Article 1, 2012
• Type: Book Chapters Status: Awaiting Publication Year Published: 2013 Citation: Hedonics, in The Encyclopedia of Engery, Natural Resource, and Environmental Economics, ed. J. Shogren, (Elsevier, England), forthcoming. 2013
• Type: Journal Articles Status: Awaiting Publication Year Published: 2013 Citation: Combining Revealed and Stated Preference Data to Estimate Preferences for Residential Amenities: A GMM Approach (with Daniel Phaneuf and John Braden), Land Economics, 2013
• Type: Journal Articles Status: Awaiting Publication Year Published: 2013 Citation: 1. Municipal Rebate Programs for Environmental Retrofits: An Evaluation of Additionality and Cost-Effectiveness (with Lori Bennear and Jonathan Lee), Journal of Policy Analysis and Management, 2013

Progress 10/01/10 to 09/30/11

Outputs
OUTPUTS: Supervision and guidance of post-doctoral research associate, a Ph.D. dissertation, and graduate student research projects as well as collaboration with faculty and staff at NC State and other universities and research organizations contributed to furthering the methods used in producing the methods described above. A report has been constructed for the U.S. Fish and Wildlife Service on the benefits that national wildlife refuges may confer to nearby property owners as a form of open space benefits. Presentation of results to U.S. Fish and Wildlife in person at USFWS headquarters in D.C. and through telephone conferences. PARTICIPANTS: Dr. Xiangping Liu, CEnREP postdoctoral fellow (2009-2011); Timothy Hamilton, graduate students, Department of Economics; Darla Hatton-MacDonald, CSIRO, Adelaide, Australia, Peter Grigelis, U.S. Department of the Interior. TARGET AUDIENCES: U.S. Fish and Wildlife program managers. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
We have provided policy makers with information on how watering restrictions affect the value homeowners place on outdoor living spaces. During times of severe and prolonged drought, water utility managers often employ outdoor watering restrictions and even watering bans to reduce household consumption. In our study, we focus on an area that has had prolonged drought and years of severe watering restrictions. We employ hedonic property value methods, as described in this project, to estimate the change in value of a property's lot size post-restrictions. We expect that as it is harder to maintain outdoor gardens households will be willing to pay less for homes with larger and more intensive gardens. Our results confirm this hypothesis. Interestingly, households value public open spaces (e.g., parks) more as their own private open space is valued less. We have also provided U.S. Fish and Wildlife Service with important information on the property value benefits that National Wildlife Refuges may confer to nearby residential homeowners as a form of permanently protected open space. This information will be used in program evaluation work by the USFWS.

Publications

• Darla Hatton-MacDonald, Neville Crossman, Parvin Mahmoudi, David M. Summers, Laura Taylor, and Peter C. Boxall, The Value of Public and Private Green Spaces Under Water Restrictions, Landscape and Urban Planning, 95(4): 192-200, 2010.
• Laura Taylor, Timothy Hamilton, and Xiangping Liu, Amenity Values of Proximity to National Wildlife Refuges, final report to Fish and Wildlife Service, Department of Interior, 2011, 75pp.

Progress 10/01/09 to 09/30/10

Outputs
OUTPUTS: Papers have been developed and presented at scholarly conferences. A spatial database was created and disseminated to NC county extension offices and local planners that will assist them in their land-use planning. The database is available through the CEnREP website. The following message was sent out to the NCPlan listserv. This list is very popular, and approximately 1,200 planners in the state subscribe to it. A similar message was sent to all County Extension Directors in the state. Dr. Steven Smutko fielded follow-up questions. The Center for Environmental and Resource Economic Policy (CEnREP), part of the Department of Agricultural and Resource Economics at NC State University has just released an information tool for state and local planners to help manage growth and protect the natural resources and quality of life for NC residents. Researchers compiled and organized a set of rich and complex data for North Carolina that can be used to quantify trends in land-use, economics, and the environment and space. The data includes information on habitat and water quality, as well as a myriad of demographic and economic data, all of which are linked to each other spatially. All data are divided into the 17 regions defined by the North Carolina Councils of Government. The data,along with an example of how the data might be used, is on the CEnREP website at: http://www.ncsu.edu/cenrep/projects/NC_landuse.php. PARTICIPANTS: Dr. Xiangping Liu, CEnREP postdoctoral fellow; Nam Ahn Tran and Timothy Hamilton, graduate students, Department of Economics; Professor Daniel Phaneuf, Associate Director of CEnREP; Professor Steven Smutko, School of Environment and Natural Resources, University of Wyoming; Professor John B. Braden, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign; and Darla Hatton MacDonald, Policy and Economic Research Unit, CSIRO Sustainable Ecosystems, Glen Osmond, South Australia, Australia. TARGET AUDIENCES: The target audiences are government regulators, policy makers, and the entire academic community. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Supervision and guidance of post-doctoral research associate, two Ph.D. dissertations, and collaboration with faculty and staff at other universities and research organizations contributed to furthering the methods used in producing the methods described above.

Publications

• (1.) The Value of Public and Private Green Spaces Under Water Restrictions,(with Darla Hatton-MacDonald, Neville Crossman, Parvin Mahmoudi, David M. Summers, and Peter C. Boxall), Landscape and Urban Planning, 95(4), pp 192-200, 2010. (2.) Proximity as a Proxy for Exposure in Hedonic Models: Theory and Evidence, (with John Braden, Dan Phaneuf and DooHwan Won; in preparation from 2008). (3.) Combining Revealed and Stated Preference Data to Estimate Preferences for Residential Amenities: A GMM Approach, (with John Braden and Daniel Phaneuf).

Progress 10/01/08 to 09/30/09

Outputs
OUTPUTS: Papers have been developed and presented at scholarly conferences. A spatial database was created and disseminated to NC county extension offices and local planners that will assist them in their land-use planning. The database is available through the CEnREP website. PARTICIPANTS: Dr. Xiangping Liu, CEnREP postdoctoral fellow; Professor Daniel Phaneuf, Associate Director of CEnREP; Dr. Steven Smutko, Director of NRLI; Professor John B. Braden, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign; and Darla Hatton MacDonald, Policy and Economic Research Unit, CSIRO Sustainable Ecosystems, Glen Osmond, South Australia, Australia. TARGET AUDIENCES: The target audiences are government regulators, Policy makers, and the entire academic community. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
New applications of hedonic methods and land-use analysis have led to scholarly publications as well as the dissemination of a land-use database through the web.

Publications

• "Theoretical Foundations and Empirical Developments in Hedonic Modeling" in Hedonic Methods in Housing Markets: Pricing Environmental Amenities and Segregation, eds. A. Baranzini, J. Ramirez, C. Schaerer and P. Thalmann, 2008.

Progress 10/01/07 to 09/30/08

Outputs
OUTPUTS: The Braden papers and modles described in the block below continued to be refined in 2007-2008 to lay the ground work for applying models to North Carolina. Data was purchased and worked with Post-Doc (CEnREP)and Professor Dan Phaneuf to develop databases for a large metropolitan area (MN). With Professor Steven Smutko, director or NRLI applied for and received a University Extension, Engagement and Economic Development Grant (EEED) to provide seed funding for developing a program to address North Carolina's growth and resultant land-use and environmental quality changes throughout the state. A partnership between the Center for Environmental and Resource Economic Policy (CEnREP, directed by Taylor) and the Natural Resource Leadership Institute (NRLI, directed by Smutko) will be developed to build a land-use decision tool. The results were disseminated throught the Journal of Great Lakes Research, the NC State Economist, and a presentation by a coauthor at a professional conferece at the 2007 Annual Meetings of The Allied Social Sciences Associations (ASSA) in New Orleans. PARTICIPANTS: Dr. Xiangping Liu, CEnREP postdoctoral fellow; Professor Daniel Phaneuf, Associate Director of CEnREP; Dr. Steven Smutko, Director of NRLI; Professor John B. Braden, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign; and Darla Hatton MacDonald, Policy and Economic Research Unit, CSIRO Sustainable Ecosystems, Glen Osmond, South Australia, Australia. TARGET AUDIENCES: The target audiences are government regulators, Policy makers, and the entire academic community. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Supervision of post-doctoral research associate and collaboration with faculty and staff at other universities and research organizations contributed to furthering the methods used in producing the methods described above.

Publications

• Braden, John B., Laura O. Taylor, DooHwan Won, Nicole Mays, Allegra Congelosi and Arianto A. Patunru. "Economic Benefits of Remediating the Buffalo River, NY Area of Concern", Journal of Great Lakes Research,v. 34:631-648. (2008)
• Braden, John B., DooHwan Won, Laura O. Taylor, Nicole Mays, Allegra Congelosi and Arianto A. Patunru. "Economic Benefits of Remediating the Sheboygan River, WI Area of Concern",Journal of Great Lakes Research,v. 34:649-660. (2008)
• MacDonald, Darla Hatton, Neville Crossman, Parvin Mahmoudi, David Summers, Peter Boxall, and Laura O. Taylor."The Value of Private and Public Green Space in the Leafy Suburbs of Adelaide", CSIRO Land and Water Division Report, January 2008, 56 pp.
• Taylor, Laura O., "Public/Private Partnerships for Brownfiel Redevelopment", NC State Economist, Nov/Dec 2007: http://www.ag-econ.ncsu.edu/VIRTUAL_LIBRARY/ECONOMIST/novdec07.pdf.