Estimating Benefits for Effective Enforcement of Speed Reduction from Dichotomous-Choice CV

ISSN： 0924-6460

Source： Environmental and Resource Economics, Vol.20, Iss.4, 2001-12, pp. : 281-304

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Abstract

We present an empirical estimation of the distribution of WTP for effective speed restriction via implementation of local traffic calming schemes. Random samples are drawn from the populations of households (henceforth HHs) of three centres intersected by main trunk roads with varying through traffic conditions. We estimate the underlying WTP distributions from discrete-choice responses to site-specific referendum contingent valuation studies accounting for zero-bidders. We then test the hypothesis of different distributions across villages. The statistical analysis consists first of a parametric specification and then of a totally non-parametric one. Stated welfare changes for effective speed reduction are found to be sizeable and the parameters of the random utility models are plausibly related to differences in objective speed measures across centres. The results appear to encourage the use of the referencum-CV method in the estimation of local public goods. In this case study the proposed public project would seem to pass the Kaldor-Hicks potential compensation test.