In order to estimate household's WTP for an urban environmental quality improvement, we apply two valuation methods: the Hedonic Price Method and the Choice Experiment Approach.
The Hedonic Price Method (HPM) assumes that housing values reflect spatial variation in environmental characteristics such as air pollution, noise or green ar-eas in the neighbourhood. It is therefore possible to estimate the impact of improvements in environmental characteristics on dwelling values and rents. The impact of the single environmental characteristics on the price can be isolated through cross-sectional analysis of the factors that determine the value of land and houses. Particular focus will lie on the impact of sources of electromagnetic pollution near dwelling locations.
In the Choice Experiment (CE) we propose to use actual and hypothetical data on housing choices and dwelling attributes. This approach involves in a first step asking respondents to reveal the attributes of their actual dwelling. Starting with questions on the actual dwelling situation puts the inquiry in a more realistic framework. In a second step, some characteristics of their dwellings are changed and respondents are asked to choose from this new hypothetical choice sets the alternative they would prefer.
Through the dwelling choices it will be possible to obtain information on the willingness to pay (or the willingness to accept, in the case of the presence of a negative characteristic) for the analyzed attributes. The presentation of different hypothetical choice sets allows to value hypothetical characteristics such as the presence or absence of electromagnetic pollution.
