1. What are the ENVIRONMENTAL benefits of the policy change that I would want to measure? Please be specific, for example you may wish to estimate the benefits of cleaner air, cleaner water, etc. (2 points for each subpart for correctly identifying and explaining the benefits) 2. (i) What is the BEST estimation method that could be used to estimate these benefits and (ii) why?

There may be more than one possible method, but there should clearly be a BEST method. DONT FORGET TO SAY WHY! (3 points for each subpart, 1 for correctly identifying the method and 2 for explaining why that method is the best for this situation.) (a) Rehabilitating a superfund site. The City of Durham is considering rehabilitating an Superfund toxic waste site. The Superfund site is located near a residential neighborhood of approximately 500 houses. The City has asked you to estimate the benefits of rehabilitating the site. Someone in your office noted that the housing prices in the neighbhood near the site are lower than in similar neighborhoods elsewhere in Durham. 1. Environmental benefits I would want to measure (2 points): 2 (i).Best estimation method (1 point): 2 (i). Why? (2 points) 3 | Page (b) Banning logging The State of Maine is considering banning logging on 10,000 acres of state-owned forest. In addition to logging, the land is used for outdoor recreational activities such as hiking, camping and fishing and is also habitat for the endangered Maine Moose. While the forest is used by many local Maine residents, few tourists from out-of-state visit the forest or even are aware of the forest. 1. Environmental benefits I would want to measure (2 points): 2 (i).Best estimation method

Travel Cost Study (15 points total) A survey of all recreational fishers using Lake Chutzik in the Adirondacks (upstate New York) during the summer of 1990 produced the following information regarding their numbers and the residents (origins): Origin Per Capita Visitation Rate Total Travel Cost Numbers of Visitors 1 0.04 $20 1,000 2 0.025 $50 3,000 3 0.015 $70 2,000 (a) In Excel, use a scatter plot to show travel cost as a function of the visitation rate on a graph, label the axes and the points. Add the best fitting line to the scatter point and the formula for this line. This will be your participation function. Paste the Excel scatterplot with the line and equation below. (3 points) 5 | Page (b) Use the participation function from part (a) to derive three per-capita demand functions, one from each site. Graph the per-capita demand functions on a second graph. Label the axes and the demand functions. You can do this by hand or in Desmos.com as it is hard to do in Excel. (4 points). 6 | Page (c) Use the data in the table for part (a) to calculate population for each city. Then use population to convert the per-capita demand functions to total demand for each site. Graph these three demand functions, label the axis and functions. You may do this by hand or on desmos.com. (4 points, one each for translating per capital demand into total demand for each origin and one for graphing them correctly.) 7 | Page (d) Calculate the total benefits for users from each origin and the total benefits from all origins. (4 pts, 1 for each area and 1 for summing correctly)