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A Stated Preference Case Study on Traffic Noise in Lisbon The Valuation of Environmental Externalities: A stated preference case study on traffic noise in Lisbon by Elisabete M. M. Arsenio Submitted in accordance with the requirements for the degree of Doctor of Philosophy University of Leeds Institute for Transport Studies August 2002 The candidate confirms that the work submitted is his own and that appropriate credit has been given where reference has been made to the work of others. Acknowledgments To pursue a PhD under a part-time scheme is only possible through a strong will and effective support. I thank my supervisors at the ITS, Dr. Abigail Bristow and Dr. Mark Wardman for all the support and useful comments throughout this challenging topic. I would also like to thank the ITS Directors during my research study Prof. Chris Nash and Prof A. D. May for having supported my attendance in useful Courses and Conferences. I would like to thank Mr. Stephen Clark for the invaluable help on the computer survey, as well as to Dr. John Preston for the earlier research motivation. I would like to thank Dr. Hazel Briggs, Ms Anna Kruk, Ms Julie Whitham, Mr. F. Saremi, Mr. T. Horrobin and Dr. R. Batley for the facilities’ support. Thanks also due to Prof. P. Mackie, Prof. P. Bonsall, Mr. F. Montgomery, Ms. Frances Hodgson and Dr. J. Toner. Thanks for all joy and friendship to Bill Lythgoe, Eric Moreno, Jiao Wang, Shojiro and Mauricio. Special thanks are also due to Dr. Paul Firmin for the friendship and precious comments towards the presentation of this thesis. Without Dr. Firmin I probably would not have resisted the exhaustive period of compressing the work. I thank the LNEC Directors and the Head of the Department of Transportation, Eng. Antonio Pinelo for all the strategic guidance, support and motivation. I also thank Prof. Pedro Martins da Silva and Dr. Jorge Patricio of the Acoustics Division, and to Mr. Carvalho and Mr. Mateus. I thank my co-supervisor at the Technical University of Lisbon (1ST), Prof. Fernando Nunes da Silva for all the strength, interest and useful discussions. Special thanks are due to my friend Dr. Manuel Tao who helped me for free during the data collection in Lisbon. Thanks are also due to my step-sisters Iris and Winnie, my step brother Alejandro, my friends Attila, Nicu, Rui, Eiji, Marisa, Kumi, the Luso-Brasilian society in Leeds and to my soccer team of the Department of Mathematics for the strength and support. In USA, special thanks are due to Prof. Daniel Sperling, Dr. Mark Delucchi and Prof. Patricia Mohktarian for their motivation and support during the research study period at the University of California, ITS-Davies. I would like also to thank Dr. Amit Bando at the Hagler Bailly International. I would like to thank Prof. Ann Carlos, Prof. N. Flores and Prof. D. Waldman of the Department of Economics of the University of Colorado at Boulder for the useful discussions, and to Professor Kenneth Train at the University of California at Berkeley for the GAUSS programs and further guidance. I thank M. Sillano for all the support on simulation. I thank the Portuguese Foundation for Science and Technology for the award of my PhD grant in the UK. I am indebted to my parents especially to Nuno the strongest care and love. The navigation to the ex ante “(un)exploited World” would not have been possible without their guiding starlight. Thanks also to God who always followed my steps in “noisier” and “quieter” navigations through this immense Ocean. Abstract This research study was motivated by the need to valuing environmental externalities from road transport. The main objective was to develop a methodology centered on the Stated Preference-choice (SP-choice) method for valuing traffic noise when individuals are in their homes. The aim was to assess the nature and extent of households’ heterogeneity of preferences for quiet. For this purpose, two different metrics of the noise variable were used to estimate the marginal values of quiet, ratings based on household’s perceptions and the physical noise measures in Leq dB(A). An innovative computer survey model was developed and administered to more than 400 households in a residential area in Lisbon with high-rise residential buildings in the vicinity of mam roads. The experimental design explored respondents’ familiarity and experience with perceived noise levels indoors in various apartment situations and at different floors of the block (lot). Lower and upper floors and their exposure to road traffic (fronting the main road or located at the back fa?ade) played a central role in the experimental design. A range of situational, socio-economic, behavioral and attitudinal variables relating to each household were collected. Physical noise measurements were taken at each apartment (indoors and at the exterior fa?ade) and related to respondents’ perceptions. Complementary methods such as the revealed preference (RP) data on apartment purchases and the open- ended contingent valuation method (CVM) were also included. The issue of convergent validity of noise value estimates for the same sample of respondents was explored. Multinomial Logit models including additional effects (MNL-INT) of a wide range of variables were explored, as well as combined MNL-INT with additional variables with random parameters’ logit specifications (Mixed Logit, ML). In brief, the study found that models based on respondent’s perceptions outperformed those based on physical noise measures. A range of other influential variables were found to interact with householders’ preferences such as adjusted household income per person, sign of noise changes (improvements or deterioration in the levels), floor number, base noise level experienced, and others. The ML specifications gave a better fit with the data. The income elasticity of marginal values of quiet was of similar magnitude in the SP-choice and RP methods, but a weak income effect was detected when using the CVM data. Nevertheless, the strategic bias may have affected both the SP-choice and CVM experimental markets. The noise value estimates were in the range of estimates found in other studies. Ill Table of Contents Acknowledgements i Abstract ii Table of Contents iii List of Tables xi List of Figures xv CHAPTER 1: INTRODUCTION 1 1.1 SETTING THE CONTEXT: THE NEED FOR VALUING ENVIRONMENTAL EXTERNALITIES FROM TRANSPORT 1 1.2 VALUING TRANSPORT EXTERNALITIES: DIFFICULTIES TO OVERCOME 3 1.3 OPPORTUNITIES FOR RESEARCH: A CASE FOR VALUING TRAFFIC NOISE EXTERNALITIES IN THE LISBON CONTEXT 4 1.4 OBJECTIVES OF THE STUDY 6 1.5 THESIS STRUCTURE 7 CHAPTER 2: THEORY AND METHODS FOR VALUING ENVIRONMENTAL EXTERNALITIES FROM ROAD TRANSPORT 10 2.1 INTRODUCTION 10 2.2 TAXONOMY OF THE VALUATION METHODS 10 2.3 MONETARY VALUATION METHODS 12 2.3.1 The Travel Cost Method 12 2.3.2 The Hedonic Pricing Method 19 2.3.3 Other Revealed Preference Methods on Market Decisions 24 2.3.4 The Contingent Valuation Method 25 2.3.5 The Stated Preference Method 32 2.4 SUITABILITY OF THE EXISTING METHODS FOR VALUING TRAFFIC NOISE EXTERNALITIES: SWOT ANALYSIS 39 2.5 CONCLUSIONS 40 IV CHAPTER 3: REVIEW OF VALUATION STUDIES ON TRAFFIC NOISE EXTERNALITIES USING STATED PREFERENCES METHODS 42 3.1 INTRODUCTION 42 3.2 REVIEW OF SP VALUATION STUDIES ON TRAFFIC NOISE 42 3.2.1 Australian Studies 43 3.2.2 Canadian Studies 44 3.2.3 Finnish Studies 45 3.2.4 German Studies 46 3.2.5 Norwegian Studies 46 3.2.6 Spanish Studies 49 3.2.7 Swiss Studies 50 3.2.8 UK Studies 52 3.3 CONCLUSIONS 58 CHAPTER 4: DEVELOPMENT OF SURVEY 61 4.1 INTRODUCTION 61 4.2 CONTEXT OF VALUATION 61 4.3 THE DEVELOPMENT OF THE SURVEY 62 4.3.1 Contributions from Psychoacoustics and Psychophysics 62 4.3.1.1 Sound and noise 62 4.3.1.2 Intensity of sound and loudness 62 4.3.1.3 Relation between different stimuli 63 4.3.1.4 Reference stimuli 64 4.3.1.5 Noise emitted by road traffic 65 4.3.1.6 Annoyance from road traffic 66 4.3.2 Contributions from Combined Social and Acoustical Noise Surveys of Community Reactions to Traffic Noise 67 4.4 MAIN FEATURES OF THE SP DESIGN 69 4.4.1 Experimental Context 69 4.4.2 Type of Choice Experiment: Repeated Binary Choices 70 4.4.3 Presentation of Noise to Respondents 71 4.4.4 The Experimental Design: Selecting the Attributes and their Levels 73 4.4.5 Data Collection Strategy and Selection of a Computerized Survey 75 4.5 STRUCTURE OF THE COMPUTER SURVEY 76 4.5.1 Complementary Valuation Methods to the SP-choice 77 4.6 CONCLUSIONS 78 V CHAPTER 5: THE PILOT AND MAIN SP SURVEYS 80 5.1 INTRODUCTION 80 5.2 THE DATA COLLECTION METHODOLOGY 80 5.2.1 The Study Area, Sampling Strategy and Desired Sample Size 80 5.2.2 The Overall Data Collection Methodology 82 5.2.3 The Computer Aided Personal Interviews at the Home of the Household 83 5.2.3.1 Duration and acceptability 83 5.2.3.2 Implementation constraints 84 5.2.3.3 Data Collection, monitoring and data screening 84 5.2.3.4 Household interviewee 84 5.3 THE NOISE DATA COLLECTION 84 5.3.1 The Portuguese Noise Regulatory Framework and the Noise Metric in Leq dB(A) 84 5.3.2 Measurement Inside Apartments and at the Exterior Fa(?ade 84 5.3.3 Instrumentation and Procedures 85 5.3.4 The Traffic Data 86 5.4 TESTING THE QUESTIONNAIRE DESIGN: PILOT STUDY 87 5.5 THE MAIN SP SURVEY 89 5.5.1 Logistics and Monitoring of the Data Collection 89 5.5.2 Data Screening Process 89 5.6 CONCLUSIONS 90 CHAPTER 6: ANALYSIS OF THE SITUATIONAL, SOCIO-ECONOMIC, BEHAVIOURAL AND ATTITUDINAL DATA 91 6.1 INTRODUCTION 91 6.2 CHARACTERISTICS OF THE STUDY AREA 92 6.2.1 Apartments’ Characteristics 92 6.2.2 Households Location Choice
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