Research Program Area: Economic Analysis
Topic Areas: Benefits
The purpose of this case study is to examine the economic impact of acid deposition damage to painted wood surfaces in the South Coast Air Basin of Southern California. The analysis brings together four types of information. Estimates of physical damage rates and the distribution of materials are obtained from recently completed studies sponsored by the California Air Resources Board. These data are combined with disaggregate aerometric parameters and survey data on individual maintenance practices. The output of the analysis is an estimate of the annual cost-savings that would be realized for a 10 percent reduction in NO, concentrations. The annual cost savings are estimated for individuals who reside in single family homes and make their own maintenance decisions. The scope of the analysis is further limited to six selected maintenance tasks that involve only painting of wood surfaces.
The data that describe individual maintenance practices are analyzed in two ways. In the physical damage function approach, results of field experiments on physical damage rates are combined with economic data to yield a best estimate of annual cost-savings for the six maintenance tasks of $0.7 million (1988 dollars). Consideration of some of the factors that contribute to uncertainty in this estimate leads to a range of values that fall between $0 and $1 million.
An alternative approach for analyzing the maintenance data is also presented. This approach relies on the estimation of economic damage directly. That is, physical damage rates are not considered. The result of the economic damage function analysis is that annual cost-savings for the six maintenance tasks are $3.6 million. The difference in the estimates of the two approaches is the result of differences in the relationship between changes in the length of the maintenance interval and changes in NO, concentrations.
For questions regarding this research project, including available data and progress status, contact: Research Division staff at (916) 445-0753
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