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Valuing Access to Water- A Spatial Hedonic Approach, with an Application to Bangalore, India

Presenter: Nancy Lozano-Gracia, Finance, Economics and Urban Dept, Sustainable Development Network, World Bank
Time: Thursday, Jan. 28, 2010  from 12:30 to 2:00 PM

Location:  MC5-N300


An important infrastructure policy issue for rapidly growing cities in developing countries is how to raise fiscal revenues to finance basic services in a fair and efficient manner. This requires estimates of the potential benefits or positive welfare effects that may follow from improved infrastructure. In this paper, we take advantage of a unique geo-referenced household survey to carry out a hedonic analysis of housing values that explicitly accounts for spatial spillovers. We use this to derive an estimate of the value of improved access to water in the Indian city of Bangalore. The findings suggest that by limiting the focus to individual or private benefits only, we may underestimate the overall social welfare from investing in service supply. We further demonstrate how spatially explicit policy simulations based on these estimates provide insight into the total effects of targeted interventions.

Presenter's Bio
Nancy joined the Bank in late July 2009 as an Economist in the Urban and Local Government Unit, FEUUR. She recently graduated from University of Illinois, where she worked on models for valuation of air pollution and local amenities, using state of the art spatial econometric methods. Prior to joining the Bank she held a post doctoral position at  Arizona State University. While in Arizona, her  research focused on spatial economic analysis and spatial econometric applications to house price analysis, urban and environmental issues, and conflict-related migration, among others. She has also worked closely with local authorities from Bogotá, Colombia, as an advisor in the updating process of cadastral values in the city. 
More information
Hua Wang,, 202-473-3255

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