Estimating the Economic Benefits of Public Investment Projects—Case of Hua-Shan Village

• Main Authors: Huang Chin Huang, 黃錦煌
• Other Authors: Ching-Kai Hsiao
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/02778509157165301464

博士 === 國立中興大學 === 應用經濟學系 === 94 === After the 9-21 Earthquake, some areas such as Hua-Shan Village of Gu-Keng Township, Yunlin County, were more easily affected by debris flow after serious storms. To protect these areas and promote rural development, the government has designed risk management and community development plans, and spent hundreds of millions of dollars. In order to understand the value of environmental goods which public had invested projects in Hua-Shan Village. In this research, we adopt nonmarket goods evaluation methods include contingent valuation method (CVM) and travel cost method (TCM), to estimate the indirect benefits of residents, and the use and nonuse value of travelers. We analyze the differences of perception and preference among respondents by using Likert scales, analysis hierarchy process (AHP), and multi-attribute utility theory (MAUT). We then, compare these three methods according to the theoretical reasoning, simplicity, and empirical results for each one. It is found that MAUT combined with Likert scales is better than other methods for evaluating the perceptions and preferences based on theoretical reasoning, questionnaire design and field survey. We use factor analysis to analyze the residents’ perception of debris flow disaster affecting factors, and extract these factors into four component dimensions. We rename new factors and sort them by weight of factors loading, the sequential order is as follows: life and property, living and leisure, landscape and environment, tourism and industry. From the viewpoint of management, a government implements suchlike public investment projects must not only protect the residents’ life and property, but also pay attention to the quality of their leisure and living. In addition, it needs to enhance the conservation of environment and landscape, to develop the local industries, and to promote the economic prosperity. Double bound dichotomous choice model of CVM has been used in this study to estimate residents’ willingness to pay for maintaining the quality of life, conserving environment and landscape, keeping life safety, and sustaining rural culture heritage. We also evaluate the nonuse value of travelers by using the same method. An on-site Poisson model of TCM, truncated and endogenously stratified is adopted to evaluate the use value by calculating the consumer surplus. In addition, the empirical results shown that residents’ willing-to-pay, has the same sequential order for both of cardinal utility and ordinal utility. So, it is reasonable to assume the residents have the same preference, and the additive model of MAUT to aggregate the indirect benefits can be justified. If we add indirect benefits from residents and use and nonuse values from travelers together, the total benefits of public investment projects without including the direct benefits from residents in Hua-Shan Village is approximately 2.7 billions NT dollars. This is the nonmarket goods value of environmental resources. Nowadays, it is important to protect environment and ecosystem, government can no longer neglect it to implement public projects. The benefits of environmental resources should be considered, so that the optimal allocation of resources can be made, and the social welfare can be maximized.