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Using Contingent Valuation and Numerical Methods to Determine Optimal Locations for Environmental Facilities: Public Arboretums in South Korea

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  • Choi, Hyunhong
  • Koo, Yoonmo

Abstract

Because the social benefit generated from a public facility varies according to its accessibility, population density of location, local income level, local taste, and the existence of similar nearby facilities, the value of facilities can vary depending on their location. Therefore, determining the ideal location is an important problem. This study provides a new direction for solving this problem by combining the contingent valuation (CV) method and nested partitions (NP) algorithm using siting of public arboretums as an example. First, consumers' willingness to pay for environmental facilities considering household characteristics and distance to both newly built and existing facilities are estimated using the CV method. In this process, consumers are divided into two groups (active and passive users), assuming they have different willingness to pay for the facilities. Then, using the results of the CV, the NP algorithm, a simulation-based discrete optimization technique, is constructed to efficiently identify optimal locations that maximize social benefit considering regional characteristics. The results of the proposed algorithm exceeded the performance of the benchmark case, and this study's findings can be used to aid decisions about complicated multiple facility locations. Moreover, visualized results are provided, which can be useful for local and central decision makers.

Suggested Citation

  • Choi, Hyunhong & Koo, Yoonmo, 2018. "Using Contingent Valuation and Numerical Methods to Determine Optimal Locations for Environmental Facilities: Public Arboretums in South Korea," Ecological Economics, Elsevier, vol. 149(C), pages 184-201.
    • Handle: RePEc:eee:ecolec:v:149:y:2018:i:c:p:184-201
    DOI: 10.1016/j.ecolecon.2018.03.017
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    Cited by:

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    2. Choi, Hyunhong & Koo, Yoonmo, 2023. "New technology product introduction strategy with considerations for consumer-targeted policy intervention and new market entrant," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    3. Liu, Zhaoyang & Hanley, Nick & Campbell, Danny, 2020. "Linking urban air pollution with residents’ willingness to pay for greenspace: A choice experiment study in Beijing," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    4. Choi, Hyunhong & Lee, Jeongeun & Koo, Yoonmo, 2023. "Value of different electric vehicle charging facility types under different availability situations: A South Korean case study of electric vehicle and internal combustion engine vehicle owners," Energy Policy, Elsevier, vol. 174(C).

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