2.1 Contingent Valuation Suppose you're tasked with estimating the Willingness to Pay for shoreline erosion prevention in Far Rockaway Queens via a Contingent Valuation survey. The survey pool will be all addresses in the zip code for Far Rockaway, including businesses (excluding government offices). NOTE: The purpose of shoreline erosion prevention is to maintain the shorelines natural ability to handle tides, whereas erosion increases the chances of flooding. Other benefits of erosion prevention are habitat conservation for flora and fauna. NOTE: Erosion prevention often involves reducing both foot and vehicle traffic, and regulating/preventing certain forms of construction and demolition. Additionally, the importation of beach sand from less impacted/impactful areas to support areas with frequent erosion. NOTE: The estimated cost of beach erosion across three potential scenarios is: 1) $50 for 25% prevention. 2) $75 for 50% prevention. or 2) $100 for 75% prevention. 100% prevention is not possible given zoning constraints. NOTE: The median income for Far Rockaway is $30,000, which is right at the national average. Despite this, the median home price in 2021 was $600,000, in part due to the vacation homes/AirBnBs that drive up home prices. 1. Write 5 contingent valuation survey questions, the goal of which is to illicit Willingness to Pay (Accept) for beach erosion prevention (beach erosion). You may assume that you also collect personal socioeconomic data from each respondent. 2. Describe the biases you'd likely encounter if purusing such a study. 3. For the biases you described in part 2, suggest some ways you may be able to deal with these biases when estimating WTP/WTA.
2.1 Contingent Valuation Suppose you're tasked with estimating the Willingness to Pay for shoreline erosion prevention in Far Rockaway Queens via a Contingent Valuation survey. The survey pool will be all addresses in the zip code for Far Rockaway, including businesses (excluding government offices). NOTE: The purpose of shoreline erosion prevention is to maintain the shorelines natural ability to handle tides, whereas erosion increases the chances of flooding. Other benefits of erosion prevention are habitat conservation for flora and fauna. NOTE: Erosion prevention often involves reducing both foot and vehicle traffic, and regulating/preventing certain forms of construction and demolition. Additionally, the importation of beach sand from less impacted/impactful areas to support areas with frequent erosion. NOTE: The estimated cost of beach erosion across three potential scenarios is: 1) $50 for 25% prevention. 2) $75 for 50% prevention. or 2) $100 for 75% prevention. 100% prevention is not possible given zoning constraints. NOTE: The median income for Far Rockaway is $30,000, which is right at the national average. Despite this, the median home price in 2021 was $600,000, in part due to the vacation homes/AirBnBs that drive up home prices. 1. Write 5 contingent valuation survey questions, the goal of which is to illicit Willingness to Pay (Accept) for beach erosion prevention (beach erosion). You may assume that you also collect personal socioeconomic data from each respondent. 2. Describe the biases you'd likely encounter if purusing such a study. 3. For the biases you described in part 2, suggest some ways you may be able to deal with these biases when estimating WTP/WTA.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:2.1 Contingent Valuation
Suppose you're tasked with estimating the Willingness to
Pay for shoreline erosion prevention in Far Rockaway
Queens via a Contingent Valuation survey. The survey
pool will be all addresses in the zip code for Far
Rockaway, including businesses (excluding government
offices).
NOTE: The purpose of shoreline erosion prevention is to
maintain the shorelines natural ability to handle tides,
whereas erosion increases the chances of flooding.
Other benefits of erosion prevention are habitat
conservation for flora and fauna.
NOTE: Erosion prevention often involves reducing both
foot and vehicle traffic, and regulating/preventing certain
forms of construction and demolition. Additionally, the
importation of beach sand from less impacted/impactful
areas to support areas with frequent erosion.
NOTE: The estimated cost of beach erosion across three
potential scenarios is: 1) $50 for 25% prevention. 2) $75
for 50% prevention. or 2) $100 for 75% prevention. 100%
prevention is not possible given zoning constraints.
NOTE: The median income for Far Rockaway is $30,000,
which is right at the national average. Despite this, the
median home price in 2021 was $600,000, in part due to
the vacation homes/AirBnBs that drive up home prices.
1. Write 5 contingent valuation survey questions, the goal
of which is to illicit Willingness to Pay (Accept) for beach
erosion prevention (beach erosion). You may assume that
you also collect personal socioeconomic data from each
respondent.
2. Describe the biases you'd likely encounter if purusing
such a study.
3. For the biases you described in part 2, suggest some
ways you may be able to deal with these biases when
estimating WTP/WTA.
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