ESTIMATING RESIDENTIAL FLOOD CONTROL BENEFITS USING IMPLICIT PRICE EQUATIONS1

Abstract
An implicit price model relating residential lot value to price determining characteristics of land is developed to measure the benefits of a structural flood control project. Special attention is given to the selection of relevant price determining characteristics of residential lots. An implicit price equation is estimated for both the with and without project conditions. Flood damages are quantified through the use of a dummy variable indicating a flood plain location. The analysis shows that annual flood damages were reduced by $15,275.

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