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You have been asked to consider two urban planning projects that directly impact nonmarket goods (project 1 and project 2). While both projects have the
You have been asked to consider two urban planning projects that directly impact nonmarket goods (project 1 and project 2). While both projects have the same costs and duration of impacts, they each impact a different urban amenity: air quality and access to public parks. Since air quality and access to public parks influences housing demand, you can use a linear regression model of housing demand to derive the unit value of the amenities (air quality and public park access). You ascertained the following regression results: q\" = 3.5 3.119Jr + 12.1141 + 14A2 + E where px is the price of housing, A1 is air quality (measured as concentration of particulate matter), A2 is individual access to public parks (measured as miles to closest park) and E is everything else. For simplicity, assume that all the regression coefficients are statistically significant and the model is robust. 3a. (4 pts) What is the unit value of A1 (air quality)? 3b. (4 pts) What is the unit value of A2 (access to public parks)? 3c. (4 pts) Project 1 would improve air quality by 3 units. What is the monetized benefit of project 1? 3d. (4 pts) Project 2 would improve average individual access to public parks by 2 units. What is the monetized benefit of project 2
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