Localization The Usage of Cadastral Information for the Formulation of nvironmental Policies: ocial valuation of elfare s Losses and Profits due to xternalities Mid point between orth and outh America asy access to all markets Jose Antonio Pinzón Bermúdez. Athens, May of 2004 Geographic and environmental diversity Localization Formulation Policies Basic Information Area: 1.141.748 km 2 Population: 42.321.361 Political ocial Currency: Capital: Peso Bogotá nvironmental Official Languages: Castellan Departments: Municipals: 32 1.094 Fiscal conomics nvironmental Policies nvironmental Policies ocial Benefits Housing Formulation Policies oil oil ocial Cost ocial elfare ater Agricultural 1
hy Appraisal? Consumers Consumption Health Human oil How Appraisal? Different methods Direct methods: Indirect methods: Firms Housing atural Resources nvironmental Productivity xternalities PAY Contingent Valuation Travel Cost Household Function Avoid Cost Health Function, Production Hedonic Prices Method Price Hedonics The basic premise is that the price of a marketable good is related to its characteristics or with the services that it provides By the intrinsic characteristics generally it is applied to the housing market Value of Housing (eighbourhood) (+) ear to: (-) ear to: Beautiful Landfills afe eighbourhood Industrial areas Beautiful Landscapes Pollution air Good routes of access Bad smell chools Unsafe eighbourhood Markets oisy eighbourhood Value of Housing (eighbourhood) Formulation Model Z = ( z1, z2, z3,..., zn ) tructural Characteristics here Zi: building area, land area, construction materials, bedrooms, etc A = ( a1, a2, a3,..., an ) eighbourhood Attributes here Ai: parks, shopping centers, safe, environmental characteristics, etc P = P( Z, A). Hedonic Function 2
Principles Microeconomics (Consumers) Max Z, X U ( Z, X ; α) Principles Microeconomics (Firms) Max Z, π = P( Z, A) C( Z, ; β ). s.t. olving P ( Z, A) + X = Y. olving ρ( Z, ; β ).T.A. φ( Z, Y, U; α ).T.P. here: Z tructural characteristics, A surrounding attributes, Y home income level, X represent consumption of other goods and services, α socioeconomic characteristics. here: C( Z, ; β ) Producer s cost function, is quantity of produced units, β technology and price factors. Principles Microeconomics (Firms and Consumers) Colombian Cadastre in umbers upply Function ntity IGAC Total Lands* 7.851.306 67 Urban 5.025.619 59 Rural 2.825.687 86 Price Hedonic Price Function Antioquia 984.873 8 588.242 7 396.631 12 Bid Function Medellin Cali Bogota 663.239 537.980 1.725.162 6 5 15 632.213 513.396 1.708.852 7 6 20 31.026 24.584 16.310 1 1 0 Characteristics Total 11.762.560 100 8.468.322 100 3.294.238 100 * Artículo 6 de la Ley 242 de 1995 ource: IGAC Decentralized cadastral Offices. stimated DP-DDPR. *stablished Land Case tudy Methodology i) the sample was calculated and chose in a random way Distribution Random ample ii) inconsistent data were eliminated iii) tests of statistical validation were elaborated iv) using GI to evaluate the consistency of the sample from the point of view of space v) econometric models were constructed and, vi) analysis of results was done 3
Case of Atmospheric Pollution pollution (by suspended particles), being a negative externality, leads to a loss of value in the houses of Bogotá As a logical consequence it produces a loss in welfare of society To prove this hypothesis and to estimate loses of welfare of society; we need several sources of information, primarily on cadastral information Case of Atmospheric Pollution stimated econometric model using Box-Cox transformation ( θ) Avaluo= β0 + β1 punt + β2arte + β3 arco + β4uso + β5 via + β6 dust + β7agua + β8 parc + β estr + ε 9 i Maintain and conserve park and public spaces has a positive impact on the welfare of society. and spaces public near increasing to value of housing. To prove this hypothesis and to estimate benefits of welfare of society; we need several sources of information, primarily on cadastral information. stimated econometric model using Box-Cox transformation ( θ) Avaluo = β0 + β1 Ac + β2 Capto + β3 Th + β4 pl + β5 st 3 + β6 st 4 + β7 st 5 + β8 st 6 + β orte + β Tip3 + ε 9 10 i Case of oil rosion Inadequate use of soil promotes an increment in erosion rates. o has a negative impact on the welfare of society rosion of soil decreasing to value of land To prove this hypothesis and to estimate losses of welfare of society; we need several sources of information, primarily on cadastral information 4
10 0 10 Kilometers 46642-376242 378210-1579753 1583882-7311019 7311587-9500000 9500001-177759377 1 0 0 1 0 Kilometers 10 0 10 Ki lometer s 0 1-61 62-107 110-277 283-818 Case of oil rosion Case of oil rosion Mapa 2 Tasas de rosión Predios de l a muestra stimated econometric model using autoregressive models AR ln P = α + n i= 1 β Z P = * i i + ρ P P + ε here is a matrix of weights constructed the inverse value of the distance between the centroids of lands Mapa 1 Pr e cio un ita rio d e la tie rra Pr ed io s de la mu e str a Precio por Hectárea Predialf.shp Mapa 3 Tasa de erosión (Ton/Ha-año) Predialf1.s hp Grados de salinidad Predios de la muestra Grados de salinidad Predialf1.shp sin salinidad salinidad severa Case Conclusions Pollution by particles represents a negative externality, which generates a loss of welfare in society. The importance is that the losses in welfare can be quantified in monetary units. The presence of urban parks in Bogotá influences in a positive way Bogotá s society because they are perceived as positive externalities, since they increase the value of housing. The importance is give the quantitative evidence (monetary) of losses of welfare on individuals. In the last case by cause of erosion, using for it the consumption of a private good like the property and based on hedonic models. General Conclusions The cadastral information and the modern Land Information ystems developed by the cadastral authorities in Colombia must serve the academic community constructs development models as well as local and national authorities use them for the formulation of environmental and social policies. patial conometrics is contributing to tests and spatial models every time with greater capacity of prediction and would be important that the cadastral authorities modernize their methodologies Finally, it is important study the economic valuation, especially of nonmarketable goods (environmental goods) because only of this form the public administration can calculate the social s profits or costs that the implementation of any public policy and estimate the impact that this can have in the welfare of society. Thank you The Usage of Cadastral Information for the Formulation of nvironmental Policies: ocial valuation of elfare s Losses and Profits due to xternalities Jose Antonio Pinzón Bermúdez. Athens, May of 2004 5