Question

3. Part 1: Explain how you might use the hedonic price method, and the contingent valuation method to find the civic pride-public good value of a) the Carolina Panthers b) North Carolina State State Football program

Answer 1

HEDONIC PRICE METHOD:

The hedonic pricing method is used to estimate economic values for ecosystem or environmental services that directly affect market prices. It is most commonly applied to variations in housing prices that reflect the value of local environmental attributes.

It can be used to estimate economic benefits or costs associated with:

• environmental quality, including air pollution, water pollution, or noise
• environmental amenities, such as aesthetic views or proximity to recreational sites

The basic premise of the hedonic pricing method is that the price of a marketed good is related to its characteristics, or the services it provides. For example, the price of a car reflects the characteristics of that car—transportation, comfort, style, luxury, fuel economy, etc. Therefore, we can value the individual characteristics of a car or other good by looking at how the price people are willing to pay for it changes when the characteristics change. The hedonic pricing method is most often used to value environmental amenities that affect the price of residential properties.

This section continues with an example application of the hedonic pricing method, followed by a more complete technical description of the method and its advantages and limitations.

CONTIGENT VALUATION METHOD:

Contingent valuation is a survey-based economic technique for the valuation of non-market resources, such as environmental preservation or the impact of contamination. While these resources do give people utility, certain aspects of them do not have a market price as they are not directly sold – for example, people receive benefit from a beautiful view of a mountain, but it would be tough to value using price-based models. Contingent valuation surveys are one technique which is used to measure these aspects. Contingent valuation is often referred to as a ''stated preference'' model, in contrast to a price-based revealed preference model. Both models are utility-based. Typically the survey asks how much money people would be willing to pay (or willing to accept) to maintain the existence of (or be compensated for the loss of) an environmental feature, such as biodiversity.

a.COROLINA PANTHERS:

The Carolina Panthers are a professional American football team based in Charlotte, North Carolina. The Panthers compete in the National Football League (NFL), as a member club of the league's National Football Conference (NFC) South division. The team is headquartered in Bank of America Stadium in uptown Charlotte; the stadium also serves as the team's home field. They are one of the few NFL teams to own the stadium they play in, which is legally registered as Panthers Stadium, LLC.^[9] The Panthers are supported throughout the Carolinas; although the team has played its home games in Charlotte since 1996, they played their home games at Memorial Stadium in Clemson, South Carolina during its first season. The team hosts its annual training camp at Wofford College in Spartanburg, South Carolina.

b.NORTH CAROLINA STATE FOOTBALL PROGRAM:

The North Carolina State Football team represents North Carolina State University in the sport of American football. The Wolfpack competes in the NCAA Division I Football Bowl Subdivision (FBS) of the National Collegiate Athletic Association (NCAA) and the Atlantic Division of the Atlantic Coast Conference (ACC). Prior to joining the ACC in 1953, the Wolfpack were a member of the Southern Conference. As a founding member of the ACC, the Wolfpack has won seven conference championships and participated in 31 bowl games, of which the team has won 17, including eight of their last 11. NC State is currently coached by Dave.