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Economic Insights Into The Siting Problem: An Application Of The Expected Utility Model

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  • Halstead, John M.
  • Whitcomb, Joanna L.
  • Hamilton, Lawrence C.

Abstract

Despite the generally recognized need for facilities such as power plants, landfills, prisons, and medical laboratories, finding host sites has become extremely difficult. This study uses the expected utility (EU) model to explain individiuals' preferences in the hypothetical case of siting a municipal solid waste composting facility. The three principal factors which EU theory prescribes would affect the decision process- benefits of the proposed facility, losses from the facility, and the (perceived) probability of various scenarios occurring- embodied by the variables in a multinomial logit model explain a substantial amount of the variation in siting decisions.

Suggested Citation

  • Halstead, John M. & Whitcomb, Joanna L. & Hamilton, Lawrence C., 1999. "Economic Insights Into The Siting Problem: An Application Of The Expected Utility Model," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), pages 1-11, April.
    • Handle: RePEc:ags:arerjl:31496
    DOI: 10.22004/ag.econ.31496
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    References listed on IDEAS

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    4. Schoemaker, Paul J H, 1982. "The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 529-563, June.
    5. Mark Sagoff, 1994. "Should Preferences Count?," Land Economics, University of Wisconsin Press, vol. 70(2), pages 127-144.
    6. Kunreuther, Howard & Easterling, Douglas, 1990. "Are Risk-Benefit Tradeoffs Possible in Siting Hazardous Facilities?," American Economic Review, American Economic Association, vol. 80(2), pages 252-256, May.
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    Cited by:

    1. Kovacs, Kent F., 2005. "Amount and Spatial Distribution of Public Open Space to Maximize the Net Benefits from Urban Recreation," 2005 Annual meeting, July 24-27, Providence, RI 19206, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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