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Economic Insights into the Siting Problem: An Application of the Expected Utility Model

Published online by Cambridge University Press:  15 September 2016

John M. Halstead ,
Joanna L. Whitcomb  and
Lawrence C. Hamilton
John M. Halstead
Affiliation:
Department of Resource Economics and Development, University of New Hampshire, Durham
Joanna L. Whitcomb
Affiliation:
Partner with Burnt Rock Consultants, Waitsfield, Vermont
Lawrence C. Hamilton
Affiliation:
Department of Sociology, University of New Hampshire, Durham
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Abstract

Despite the generally recognized need for facilities such as power plants, landfills, prisons, and medical laboratories, finding host sites has become extremely difficult. This study uses the expected utility (EU) model to explain individuals’ preferences in the hypothetical case of siting a municipal solid waste composting facility. The three principal factors which EU theory prescribes would affect the decision process—benefits of the proposed facility, losses from the facility, and the (perceived) probability of various scenarios occurring—embodied by the variables in a multinomial logit model explain a substantial amount of the variation in siting decisions.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 28 , Issue 1 , April 1999 , pp. 65 - 75
Copyright
Copyright © 1999 Northeastern Agricultural and Resource Economics Association 

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