the study area, as well as national data on the willingness-to-sell and 

 willingness-to-pay for the various activities. 



The imputed summed value for the recreational activities is about 18 times 

 greater using the willingness-to-sell concept than for the willingness-to-pay 

 approach. However, the aggregate consumer surplus estimate using the willing- 

 ness-to-pay approach is about twice as great as it would be using conventional 

 methodology because it is usually calculated as willingness-to-pay above actual 

 cash outlays; the expenditures are added to the willingness-to-pay values in the 

 Thibodeau and Ostro estimates. This is a serious conceptual error, but it would 

 have been mitigated had Ostro and Thibodeau pointed out the unorthodox nature 

 of their procedure. 



The aesthetic benefits are imputed through the estimation of hedonic 

 (location related) real estate prices; the basic technique is highly similar to 

 that employed by Abdalla and Libby ([58]) and Shabman and Bertelson ([37]). The 

 average property value of a home on a block was treated as the dependent variable 

 in a regression model in which a dummy variable was used to distinguish 

 waterfront acreage from fasti ands acreage. The waterfront amenity had a 

 significant impact on the prices of homes; the estimated impact on realty values 

 was about $150 per wetland acre. Thibodeau and Ostro correctly impute the 

 increase in property value due to the waterfront amenity as a preservation 

 benefit of the wetland; Abdalla and Libby incorrectly impute the location- 

 generated realty price differential to the development process. 



58. Abdalla, C.W., and L.W. Libby. 1982. Economics of Michigan wetlands. 

 Agricultural Economics Report No. 410, Michigan State University, East 

 Lansing. 32 pp. 



This paper deals with a problem that is the inverse of the problem of 

 assessing the nonmarket benefits provided by wetlands. Abdalla and Libby examine 

 the location value of real estate that is located in the vicinity of various 

 Michigan wetlands. As the authors point out, economic efficiency requires that 

 the wetlands be allocated so as to maximize the total social value of the 

 resource. 



The wetlands in question have frontage strips that are all suitable for 

 real estate development. The "value of development" refers to the fact that a 

 developed (improved) lot is worth more than an undeveloped lot, and the greater 

 the value of the improvement expenditures, the greater the price of the lot. 

 Conceptually, the development value of the resource can be measured as the 

 differential between the return to a given development expenditure on a lot near 

 the" wetland, and the return to the same expenditure on the next most advantageous 

 site. The marginal contribution of the wetlands to the price of the lot 

 (development versus undeveloped differential) can be rigorously determined 

 through a multi-variate regression analysis in which the price of a developed 

 lot is the independent variable and the distance between the lot and the wetland 

 and the waterfront footage of the lot are used as independent variables along 

 with the value of the improvement expenditures. 



Still, the analysis seems confused in attributing the variation in lot 

 price (as a function of distance from the wetland) as an attribute of the 



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