Abstract
AbstractThe urban heat island (UHI) provides direct evidence of human activities contributing to a feedback loop that changes ecosystem services by creating localized warming and differences in vegetated landscapes in areas around the urban core. This paper develops a new spatial-temporal panel estimator to recover consistent estimates of households’ valuation of coupled landscape and temperature ecosystem services. Using data from Phoenix, AZ, we estimate a hedonic price function using an extension of the Hausman-Taylor model to overcome challenges associated with the varying spatial scales of capitalization of landscape and temperature variables and omitted variables. We find a positive and economically significant marginal willingness to pay (MWTP) for measures of green landscaping at multiple spatial scales and a separate MWTP for a one degree (F) reduction in outdoor temperatures of $72 monthly.
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