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Appears in Collections:Economics Working Papers
Peer Review Status: Unrefereed
Title: A combinatorial optimisation approach to non-market environmental benefit aggregation
Author(s): Hynes, Stephen
Hanley, Nicholas
O'Donoghue, Cathal
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Citation: Hynes S, Hanley N & O'Donoghue C (2008) A combinatorial optimisation approach to non-market environmental benefit aggregation. Stirling Economics Discussion Paper, 2008-08.
Keywords: Environmental benefit value
aggregation spatial microsimulation
willingness to pay
corncrake conservation
JEL Code(s): Q1
Issue Date: Jun-2008
Series/Report no.: Stirling Economics Discussion Paper, 2008-08
Abstract: This paper considers the use of spatial microsimulation in the aggregation of regional environmental benefit values. The developed spatial microsimulation model uses simulated annealing to match the Irish Census of Agriculture data to a Contingent Valuation Survey that contains information on Irish farmers’ willingness to pay (WTP) to have the corncrake restored as a common sight in the Irish countryside. We then use this matched farm survey and Census information to produce regional and national total WTP figures, and compare these to figures derived using more standard approaches to calculating aggregate environment benefit values. The main advantage of the spatial microsimulation approach for environmental benefit value aggregation is that it allows one to account for the heterogeneity in the target population. Results indicate that the microsimulation modelling approach provides aggregate WTP estimates of a similar magnitude as those produced using the usual sample mean WTP aggregation at the national level, but yields regional aggregate values which are significantly different.
Type: Working or Discussion Paper
Affiliation: Teagasc

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