1
Alternative methods and their reliability for
the evaluation of transport social cost an
application to an Italian medium-sized city

• Prof. Cristina Pronello, Alessia Gaia Ph.D
  student
• Politecnico of Torino
• Department of Hydraulics, Transport and Civil
  Infrastructures Italy

2
Research Objectives
The definition of an innovative methodology for
the evaluation of the good environment and
consequently people WTP for the implementation of
the environmental conditions
The evaluation of the reliability of this
methodology through its application to a
case-study
3
Research Background

• The methods for the economic evaluation of the
  good environment can be grouped in
• Revealed Preferences methods (RP) based on the
  observation of people behaviour in a real context
  of choice
• Stated Preferences methods (SP) based on
  individual response facing hypothetical
  scenarios
• Dose-response method based on a physical
  relation

4
Research Background

• Limitations of the Revealed Preferences methods
• Difficulty in the specification and inclusion of
  qualitative variables (comfort, ...)
• Impossibility of the inclusion of hypothetical
  scenarios
• The sample could be not representative
• Modest capability in describing the relations
  between the variables
• Costs of the databases could be very high

5
Research Background

• Advantages of the Stated Preferences methods
• Introduction of future alternative or scenarios
• Introduction of qualitative variables
• Possibility of variation of the attributes
  levels
• With an equal cost the sample that could be
  obtained is bigger
• The data are more easy to check.

• Limitation of the Stated Preferences methods
• Eventually presence of bias.

6
Methodology backgroud

• In this research we suggest for the evaluation of
  the good environment the possibility to
  introduce the use of
• the Stated Choices method (SC)
• In this method people are asked to choose
  which scenario, made up of a combination of
  attributes, suits the best with their
  preferences. Because of this peculiarity it seems
  that it could be broadly used in environmental
  research (also a Norwegian study has used this
  approach).

7
Methodology background

• The new approach to the environmental cost
  evaluation expects

• the use of stated preferences method
• to forecast people behaviour in hypothetical
  scenarios and consequently
• to evaluate people willingness to pay to an
  improvement in the environmental quality

8
The application of the proposed approach the
Italian case study

• To evaluate the reliability of the methodology
  presented we tested it in a real case

• We choose
• a medium sized city
• to implement a traffic policy to decrease the
  environmental pollution of the city
• to close the area of the city centre to the car
  traffic
• to evaluate this scenario through a survey
• to use two different techniques to evaluate the
  good environment and then to compare the
  results

9
The Italian case study the survey

• Area of interest of the research the city of
  Alessandria (North of Italy)
• The survey was conducted in autumn 2002 by phone
• Towns population was stratified in function of
• - zone of residence
• - type of occupation
• A sample of 823 people was extracted
• 690 people were interviewed

10
Questionnaire Design

• The questionnaire was divided into 3 sections
• Section characteristics of the mobility (origin,
  destination, frequency, purpose, etc.)
• Section socio-economic information (sex, age,
  occupation, etc.)
• Section application of the CV and the SC
  techniques to evaluate people WTP

11
Questionnaire Design 3rd Section
Application of the CV to evaluate people WTP for
the citys environmental conditions

• CV application to evaluate the WTP for air
  pollution
• How much are you willing to pay for a real
  reduction of the 30 for the city air pollution?

• CV application to evaluate the WTP for noise
  pollution
• How much are you willing to pay for a real
  reduction of the 30 for the city noise
  pollution?

12
Questionnaire Design 3rd Section
Application of the SC techniques to evaluate
people WTP for the citys environmental
conditions

• SC application
• 4 different scenarios with 2 alternatives were
  presented
• each alternative was characterized by relevant
  attributes
• - total travel cost
• - total travel time
• - proportional decrease of the air
  pollution
• - proportional decrease of the noise
  pollution

13
Questionnaire Design SC game

• Example of SC game
• Basic idea high proportional reductions in
  environmental pollution imply an higher travel
  time but a rather lower travel cost

SCENARIO 3 ALTERNATIVE A
ALTERNATIVE B
reduction noise 20
reduction noise 20
reduction air pollution 0
reduction air pollution 40
Travel time 35 min.
Travel time
50 min. Travel cost
7,5 Travel cost
4
14
WTP Evaluation

• We obtained 3 different values of WTP depending
  on the methodology used
• WTP_CV_AIR_POLLUTION expressed in /year
• WTP_CV_NOISE expressed in /year
• WTP_SC expressed in /year, it is representative
  of the quality value of the environment
  implicitly given by the interviewed

15
WTP Evaluation

• The WTP_SC was obtained through the following
  equation

• where
• Ctravel is the total travel cost
• Ttravel is the total travel time
• puntoAIR_POLLUTION is the envisaged proportional
  reduction of the air pollution
• puntoNOISE_POLLUTION is the envisaged
  proportional reduction of the noise pollution
• WED_FREQUENCY is the weekly travel frequency

16
WTP Evaluation

• The values obtained from the Contingent Valuation
  (CV) express respectively
• People WTP for a reduction in the urban air
  pollution
• People WTP for a reduction in the urban noise
  pollution.
• The value obtained from the Stated Choices method
  (SC) expresses
• WTP for the global quality of the urban
  environment without making any distinction
  between noise, air pollution and so on.

17
WTP Evaluation

• The values obtained from the statistical analysis
  from the three different WTP using the two
  different methodologies are included between
• - 47 and 277 /year for the WTP concerning the
  30 reduction of the air pollution evaluated
  using the contingent valuation (CV)
• - 31 and 243 /year for the WTP concerning the
  30 reduction of the noise pollution evaluated
  using the contingent valuation (CV)
• - 3196 and 7088 /year for the WTP evaluated
  using the stated choices method (SC)

18
Conclusions

• The values of the social cost of transport reveal
  significant differences
• The esteem obtained using the SC is considerably
  bigger than that obtained using the SC this can
  be explain with the fact that the value obtained
  through the SC gives the value assigned by people
  to the urban environmental quality. We assumed
  this value representative for the WTP to obtain
  its improvement.
• Both esteems obtained using the CV method are
  comparable and considerably smaller than that
  obtained using the SC. This is consistent with
  what is usually found in research.

19
Conclusions and future developments

• These results suggest
• With CV people show difficulties in monetary
  quantification
• SC method limits possibility of monetary
  underestimation
• Future work may lead to further investigate the
  possibility of application of SC technique and
  people way of reaction to SC application