Social and Behavioral Sciences Commons^™

We develop an approach for estimating individual or household level preferences for a large set of quality-differentiated goods and for constructing Hicksian welfare measures within the demand system framework. Our approach uses a maximum simulated likelihood procedure to recover estimates of the structural parameters and a multistage, Monte Carlo Markov chain algorithm for constructing Hicksian consumer surplus estimates. We illustrate our approach with a recreation dataset consisting of day trips to 62 Mid-Atlantic beaches.

We propose and apply a value capture property tax for financing beach nourishment projects. Our application is to beaches in the state of Delaware. Using a hedonic price function we estimate the implicit value ofproximity to the beach. Using these results we then infer a property tax schedule that taxes homeowners roughly in proportion to the benefits they receive from the projects. We argue that the tax is equitable in the sense that tax burden and project benefits are aligned. We argue that it is efficient in the sense that homeowners face the real cost ofmaintaining beaches that protect and …