Abstract. The benefit transfer method was developed as an alternative way to value externalities using values from studies of similar circumstances, carried out at similar sites somewhere else, given the challenges and high costs inherent in assessing the actual cost. Specifically, in order to test the performance of the benefit transfer method, employing hedonic price models, this study focused on estimates of disamenities associated with waste transfer stations at four different cities in Israel. The sites were intentionally selected to represent a variety of circumstances. We transferred the estimated benefit function from a ''study site'' to a ''policy site''. The goodness of fit was examined by comparing the calculated value, with actual data from the policy site. To test the sensitivity of the benefit transfer function to socioeconomic and housing characteristics, it was repeatedly applied to different sets of observations. The findings suggest that a relatively large number of alternative benefit functions are transferable. Statistical inequality outcome regarding the degree of similarity between samples does not unequivocally rule out the appropriateness of transferring environmental values across studies. Transfer errors varied between )21% and +29%, and the absolute average error for all transfers was 15.4%. Errors were lower for transfer between relatively similar cities in terms of size and location and between sub-samples that were similar in socioeconomic characteristics and housing type. However, when a site with very dissimilar data was involved, the average absolute error rose to 19%.
Project Renewal, a national programme for social and physical rehabilitation of distressed neighbourhoods, was aimed at reducing inequalities in Israeli society. This study analyses the influence of Project Renewal on the status of its target neighbourhoods, by means of a before-and-after comparison of these areas with matched control neighbourhoods. An extensive analysis of the characteristics of veteran residents, in-migrants, and out-migrants ( 200 000 households) shows that improving service provision in poor areas is not sufficient to change their status. Renovated housing and improved social services are valuable, but a neighbourhood status and its attractiveness are determined more by its reputation as a place for higher-status households than by the services it offers. Adding new housing to the old neighbourhood, after improving its services, seems to be the required breakthrough, given that the new residents are moderately better-off than the veterans. The final discussion puts the results of this and former studies of Project Renewal in a general context of welfare policy.
The paper explores the performance of decentralized incentives when abatement involves technological indivisibilities. Technologically, pollution abatement is often carried out as a discrete process, if pollution reduction involves relatively large-scale investments in emission abatement equipment.Consequently, the firm's response to decentralized economic incentives for pollution abatement is affected by the indivisible property of the technology. It can be shown that in such cases efficiency may not be realized. Installing an abatement device may entail “too much” or “too little” investment compared with the eficient solution. To partially remedy this problem, an incentive scheme which incorporates a fine (penalty) on pollution-induced damages is proposed in this paper. Essentially, as in the case of the command and control approach, the mechanism imposes a fine when firms do not meet an aggregate (e.g., a “bubble”) emission level. The fine is set as a proportion of the polluting firm's share of the total excess damage inflicted when the standard has been violated. The paper explores alternative outcomes under this scheme in the framework of a non-cooperative game. The outcomes under command and control (uniform percentage reductions), taxes, pollution permits and the fine scheme are illustrated with data from the haifa area in northern Israel. They are compared with the social planner solution in terms of efficiency (achieving a given standard at minimum cost) and the volume of transfer cost. Copyright Kluwer Academic Publishers 1993
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