טכניון מכון טכנולוגי לישראל
הטכניון מכון טכנולוגי לישראל - בית הספר ללימודי מוסמכים  
M.Sc Thesis
M.Sc StudentTkach Anastasiya
SubjectUsing CVM in Economic Evaluation of Public Urban Open Spaces
DepartmentDepartment of Industrial Engineering and Management
Supervisor Dr. Mira Baron
Full Thesis textFull thesis text - English Version


Abstract

This research is dedicated to economic evaluation of public urban open spaces, specifically playgrounds. Playgrounds are one of the classical examples of public goods - goods which all enjoy in common in the sense that each individual’s consumption of such a good leads to no subtractions from any other individual’s consumption of that good. Different methods appear in economic and environmental literature, among them - contingent valuation method (CVM). In our research we examine factors that influence people’s willingness-to-pay for some aspects of playgrounds supply, like improvement, new playground construction and preservation of the playground. Contingent valuation method is a perfect tool for this purpose as it checks person’s willingness-to-pay for some hypothetical commodity based on the person’s preferences, individual approach to the playground and socioeconomic characteristics. I constructed questionnaire reflecting basic hypothesis - we asked questions about the factors that we consider being important for the playground valuation, such as satisfaction level, secureness, facilities' quality and quantity, air quality, noise level, income, number of children in the family, number of adults in the family, etc. The other hypothesis was that results obtained at playground X (study site) can be implemented for valuation of playground Y (policy site) with the same basic parameters (socioeconomic level of the neighborhood, nearness to a road and present repair condition). Results obtained after the data analysis proved that our hypotheses were correct. Among significant variables that influence willingness-to-pay for improvement, new playground construction and preservation of the playground appear immigration status, average monthly family income, gender of the interviewed person, number of cars (for payment for improvement only), number of children and satisfaction level. We’ve made econometric analyses (standard tobit, two-step tobit and ordered probit methods were used), and obtained that average predicted value for payment for playground improvement is 8.79 NIS per month, for construction of a new playground is 6.9 NIS per month, and for preservation of the playground is 5.43 NIS per month. These values were obtained using ordered probit method. Predicted values change with the socioeconomic status of the neighborhood: as income increases, willingness-to-pay increases.

We’ve got predicted values and with the help of Benefits Transfer method investigated possibility of demand function transfer between policy and study sites. Obtained transfer error rates are low, and we consider the method to be effective, i.e. results can be transferred between playgrounds with the same basic parameters.