Browsing School of Management by Subject "Fairbanks North Star Borough"
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An exploration of own and cross-price elasticity of demand for residential heating in the Fairbanks North Star BoroughThe purpose of this study is to utilize community level household energy consumption data to determine the short-run own- and cross-price elasticity of heating oil and wood using the proportionally calibrated almost idea demand system model. Elasticity values can identify how residents of the Fairbanks North Star Borough will potentially alter home heating practices in response to a change in home heating oil price. Results indicate that values for own-price elasticity for oil is -0.259, with a 95% confidence interval of [-0.272, -0.246]. Based on predicted values a 1% increase in the price of heating oil is estimated to result in a reduction of 0.259% in the quantity of residential heating oil consumed by the average household. Cross-price elasticity estimates of wood with respect to a change in the price of oil is 0.198 with a 95% confidence interval of [0.171, 0.234]. Based on predicted values, a 1% increase in the price of oil is predicted to increase wood consumption by 0.198%. In addition, this study utilized a Monte Carlo Simulation with estimated elasticity parameters to predict the change in household level energy consumption of wood and heating oil given an increase in heating oil prices. Approximately 71% of households are predicted to decrease overall energy consumption. 83.5% of households are predicted to decrease oil consumption, and 57.3% of houses are predicted to increase wood consumption. Through evaluating household's energy consumption decisions in the face of changing prices, these results can inform effective air quality policies.
On the willingness-to-pay for Elodea removal in the Fairbanks North Star BoroughThe empirical research conducted herein addresses a public need for the funding of a project that would eradicate Elodea in the Fairbanks North Star Borough (FNSB). The eradication project has been outlined and approved by State and Federal agencies and has gathered funding to begin the eradication process. The study aims to develop a mean willingness-to-pay value for survey participants by shifting the funding burden to property tax payers. This body of work includes a primer on Elodea in the borough, an overview of contingent valuation, a parametric approach to willingness-to-pay, and results of the study conducted on Fairbanks property owners. The average willingness-to-pay per survey respondent is $50.32. In addition, 72% of survey respondents voted for the enactment of the program at their proposed cost level. These financial burdens took values of $10, $30, $60, or $120 per year for 4 years to fund the proposed program. A penalized maximum log-likelihood estimation found that the most significant predictors for the likelihood of a yes vote are the respondent's perceived risk to the ecosystem and recreational opportunities. Additionally, the respondents concern for the use of herbicides in the borough to treat the Elodea infestation is highly significant. The high level of prior knowledge throughout the survey indicates that respondents had established view on Elodea prior to the survey.