Environmental impacts of mining on Green Valley, Arizona.

Abstract

The purpose of this dissertation is to estimate an empirical model of demand for environmental characteristics for the Green Valley community and to evaluate environmental impacts of mining on the community. Environmental impacts are estimated by two different methodologies: An hedonic price model for housing and a contingent valuation based upon a sample survey of Green Valley residents. Variables that serve as proxies for environmental characteristics in hedonic prices and willingness to pay equations are distance from mining complex and orientation of house (viewscape). These variables are proxies for environmental air quality and scenic quality. Inverse demand equations for environmental variables are derived from the hedonic and contingent valuation analysis. Using these demand relations, environmental impact of mining is estimated as the consumers surplus from environmental quality improvements in Green Valley. In this dissertatlon, consumer surplus is an approximation to the sum of individual surpluses, which allows for variations in specific levels of the specific variables across the individual household. Based upon the number of detached single family homes, the environmental impact of mining on the Green Valley community is estimated by the contingent valuation approach to be approximately $44,000,000 and by the hedonic price approach to be approximately $94,000,000. When impact is based upon total units (detached and nondetached), the environmental impact is estimated by contingent valuation to be approximately $88,000,000 and by the hedonic price approach to be approximately $191,000,000. Perhaps, these estimates bound the actual impact.