| The first essay measures the impact of an outbreak of pediatric leukemia on local housing values. A model of residential location choice is used to describe conditions under which the gradient of the hedonic price function with respect to health risk is equal to household marginal willingness to pay to avoid pediatric leukemia risk. This equalizing differential is estimated using property-level sales records from a county in Nevada where residents have recently experienced a severe increase in pediatric leukemia. Housing values are compared before and after the increase with a nearby county acting as a control group. The results indicate that housing values decreased 15.6% during the period of maximum risk. Results are similar for alternative measures of risk and across houses of different sizes. With risk estimates derived using a Bayesian learning model the results imply a statistical value of pediatric leukemia of {dollar}5.6 million. The results from the paper provide some of the first market-based estimates of the value of health for children.; The second essay evaluates the cost-effectiveness of public incentives that encourage households to purchase high-efficiency durable goods. The demand for durable goods and the demand for energy and other inputs are modeled jointly as the solution to a household production problem. The empirical analysis focuses on the case of clothes washers. The production technology and utilization decision are estimated using household-level data from field trials in which participants received front-loading clothes washers free of charge. The estimation strategy exploits this quasi-random replacement of washers to derive robust estimates of the utilization decision. The results indicate a price elasticity, -.06, that is statistically different from zero across specifications. The parameters from the utilization decision are used to estimate the purchase decision using data from the Consumer Expenditure Survey, 1994--2002. Households consider optimal utilization levels, purchase prices, water rates, energy rates and other factors when deciding which clothes washer to purchase. The complete model is used to simulate the effects of rebate programs and other policies on adoption patterns of clothes washers and household demand for water and energy. |
