Green landscaping in an arid, urban environment requires considerable water usage.  In addition, recent research has demonstrated linkages between green landscape and reductions in nighttime temperatures helping to offset the effects of urban heat island.  For policymakers concerned with the continued, inexpensive access to water needed to maintain such landscapes understanding the values households place on landscape and cooler nighttime temperatures provide important insights into the challenges and opportunities facing policymakers seeking to manage water resources. Using Phoenix, Arizona as a case study, we adapt the Hausman-Taylor panel data model to recover these valuations and control for omitted variables across spatial scales.  Exploiting variation in temperatures across time and special scales, we find a positive and economically significant willingness to pay for lower nighttime temperatures and green landscaping that is an order of magnitude larger at the neighborhood scale than the comparable measure at a parcel scale.

Joint with V. Kerry Smith (Arizona State University, United States)
Keywords:  Hausman-Taylor; Heat Island; Green Landscape; Hedonic