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Who Cares about Environmental Stigmas and Does It Matter? A Latent Segmentation Analysis of Stated Preferences for Real Estate
Author(s) -
Patunru Arianto A.,
Braden John B.,
Chattopadhyay Sudip
Publication year - 2007
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.00988.x
Subject(s) - preference , real estate , aggregate (composite) , market segmentation , perception , covariate , value (mathematics) , revealed preference , willingness to pay , segmentation , economics , econometrics , identification (biology) , psychology , actuarial science , microeconomics , statistics , computer science , mathematics , artificial intelligence , ecology , finance , materials science , neuroscience , composite material , biology
This article uses latent segmentation analysis to estimate the benefits of contaminant cleanup in Waukegan Harbor, Illinois. Survey responses to attitudinal and perception questions provide significant information about the existence of distinct preference groups. By comparison, the predictive usefulness of demographic covariates is unclear. The expected aggregate willingness‐to‐pay of Waukegan homeowners for full cleanup is approximately equivalent to a 20% increase in the market value of homes. The aggregate estimate is little affected by the identification of preference clusters.