1,720,978 research outputs found
A protocol for the estimate of the social rate of time preference: the case studies of Italy and the USA
No full textPurpose – The purpose of the paper is to characterize an evaluation protocol of the social discount rate (SDR). This is based on the social rate of time preference (SRTP) principles, according to which the investment selection process must tend to maximize the utility of the community.
Design/methodology/approach – The theoretical reference of the evaluation protocol is represented by the Ramsey formula. It is widely used in many countries with advanced economics for the SRTP estimation, through the maximization of the Social Welfare Function (SWF).
Findings – The protocol structure and the protocol applications to the Italian and US economies explain how the SDR value is influenced by the socio-economic structure of the single nation.
Research limitations/implications – The strong variability of the results of the SDR according to the theoretical approach of reference and the operating path that follows can lead to judgments decidedly divergent on the acceptability of the public project, hence, the important policy implications for the entire allocation process of public resources.
Practical implications – The applications allow to highlight the important operational problems that must be resolved with regard to the choice of the time intervals of the evaluations, as well as logical-operational tools to be used to express estimates of parameters.
Social implications – They are relevant in relation to the effects of a more equitable allocation of the resources.
Originality/value – The protocol for the SDR estimation is based both on solid disciplinary principles and on objective data of non-complex availability and representative of the economic and socio-demographic context of the country in which the decision-making process is implemented
Declining Discount Rate Estimate in the Long-Term Economic Evaluation of Environmental Projects
No full textThe decision-making processes regarding projects with long-term environmental implications are strongly influenced by the estimate of the Social Discount Rate (SDR). An economic parameter that makes it possible to compare financially the Cash Flows (CFs) that occur at different time points, in the discounting the SDR reduces excessively the costs and benefits more distant over time. If this problem is particularly marked in the Cost-Benefit Analysis (CBA) conducted with time-invariant discount rates, it can be overcome by adopting time-declining discount rates. Thus, starting from the examination of the potentialities connected with the application of hyperbolic discounting in the CBAs, the aim of the work is to characterize an innovative probabilistic model for estimating the Declining Discount Rate (DDR), able to overcome the limits of the theoretical approaches recognized in the literature. The model is implemented on the data of the Italian economy and the DDRs estimated in this way are used in the economic feasibility study of an irrigation reconversion intervention. The processing proves that the adoption of time-declining discount rate allows attributing greater "weight" to the positive long-term externalities that characterize the interventions that promote sustainable development. This with decisive repercussions on the priority order of the initiatives to be financed and therefore on the entire allocation process of resources to be used to projects with intergenerational environmental implications.(*) The contribution to this paper is the result of the joint work of the two authors, to which the paper has to be attributed in equal parts. (C)2020 L&H Scientific Publishing, LLC. All rights reserved
Economic Analysis Models for Cleaner Production Investments
No full textIn recent decades, growing environmental concerns are driving the search for new technologies, policies and projects based on Cleaner Production (CP) in order to accelerate the transition towards Sustainable Development Goals (SDGs). In this context, it becomes increasingly urgent to characterise new decision support models capable of guiding governments towards more sustainable investment choices. These models must implement tools for the
economic evaluation of actions and strategies: among them, Cost-Benefit Analysis (CBA) plays an important role.
In CBA, giving due weight to the social and environmental effects, also in the long term, of a project is essential. To
this end, it is necessary to correctly choose the Social Discount Rate (SDR), a parameter that makes it possible to
economically compare costs and benefits that occur at different times. Discountimg procedures based on constant
rates are generally used in practice. In economic analyses, such discount rates underestimate long-term impacts.
The aim of this study is to demonstrate how the use of alternative economic discounting procedures to traditional
models is a necessary step in the economic evaluation of intergenerational projects. Specifically, we propose a cost-benefit discounting approach that is: i) dual, i.e. based on the characterisation of a twofold discount rate, with the
purpose of distinctly discounting the strictly financial effects of the project and the social and environmental effects;
ii) declining, in order to give greater weight to the socio-environmental effects that are progressively more distant
in time.
The main novelties of the model concern first the introduction of the environmental quality variable into the
mathematical structure of the SDR; but also, the assessment of macroeconomic investment risk. Based on the
proposed model, we estimate for the first time declining discount rates, both economic and environmental, for
different national economies. The results highlight the ability of dual and declining SDR structures to make more
equitable judgments of economic viability for cleaner production investments, with important repercussions in terms of Economic Policy
Life Cycle Costing and BIM: An Integrated Approach for a Sustainable Construction Sector
No full textThe construction sector, responsible for 30% of global greenhouse gas emissions, plays a crucial role in land-use planning and quality of life. The integration of Life Cycle Costing (LCC) with Building Information Modeling (BIM) emerges as a promising approach to guide sustainable decisions in the construction lifecycle. Adopting a holistic approach, LCC considers the entire life cycle of the civil construction, providing a clear view of costs over time for informed and sustainable decisions. Despite the increasing use of LCC by public authorities and productive sectors, its implementation encounters challenges related to the complex management of the necessary data. The use of BIM facilitates the implementation of LCC by simplifying the collection, management and analysis of data in a unified digital environment. The automation of life-cycle costing processes reduces the complexity and time required for analysis, making it more accessible and convenient. The aim of the study is to provide an extensive analysis of LCC, outlining its limitations and examining how integration with BIM can overcome them. The synergy between BIM and LCC is not just a technological adaptation, but a key strategy to move the construction industry towards a sustainable approach, improving operational efficiency and reducing the environmental impact of construction activities
Historical heritage–MultiCriteria Decision Method (H-MCDM) to prioritize intervention strategies for the adaptive reuse of valuable architectural assets
No full textIdentifying the most suitable strategy for the adaptive reuse of historic architectural heritage is a complex challenge. This is because each rehabilitation project of an abandoned historic building must not only ensure the simultaneous pursuit of social, cultural and financial goals, but also the transmission of tangible and intangible values to future generations.In this context, the use of multi-criteria approaches helps to synthesise stakeholders' preferences based on multiple and conflicting criteria, with the aim of promoting sustainable solutions for the restoration and valorisation of valuable architectural assets. To this end, we characterise the Historical heritage -MultiCriteria Decision Method (H-MCDM), an analysis and evaluation tool aimed at identifying the best adaptive reuse of historic buildings considering the principles of architectural conservation and both economic and socio-cultural values. It is a model based on the Analytic Hierarchy Process (AHP), which employs 7 evaluation indicators, chosen after a critical and interpretative analysis of both the sustainability principles promoted by the United Nations and UNESCO, and the ICOMOS quality principles.The H-MCDM is structured on the following five logical-operational steps: (i) identification of strategies for adaptive reuse of the historic building; (ii) construction of the matrices of the pairwise comparisons of the criteria and estimation of the vector of the weights of the criteria; (iii) construction of the matrices of the pairwise comparisons of the alternatives against each evaluation criterion and estimation of the local scores of the alternatives; (iv) consistency checks of the decision matrices; (v) calculation of the total priority and ranking of the HBU strategies for historic assets. The application to a case study demonstrates that, due to its adaptability and versatility, the H-MCDM can be a valid and consistent decision support in public resource allocation processes for the rehabilitation of architectural heritage.center dot The H-MCDM is a flexible and practical tool to evaluate the best strategy for adaptive reuse of historical heritage.center dot The H-MCDM is an AHP-based model which employs 7 indicators relating to the social, cultural and economic spheres.center dot The evaluation indicators are chosen in accordance with 2030 SDGs and European Quality Principles
Infrastructure Accessibility Measures and Property Values
No full textThe aim of this paper is to investigate the relationship between accessibility to services and transport infrastructure and property prices. Empirical evidence shows that an increase in accessibility levels tends to result in a positive impact on property values. However, assessing this potential benefit is not straightforward.
In this research, we first clarify which are the methods mainly employed to measure accessibility to services and infrastructures; then, we build a dataset of indicators useful to define the price function. The output is the characterization of a Hedonic Pricing Model (HPM) able to evaluate the effect of accessibility on residential properties, seldom considered in estimates. Two main findings emerge from the study. The first is that an HPM should be a function not only of the traditional intrinsic and extrinsic characteristics generally used to explain property values, but also of specific accessibility indicators, distinguishing between local and system accessibility. The second is that HPM, generally based on the use of multiple regression models, fails to consider the spatial correlation that is often particularly significant for the accessibility variable. Therefore, in the case of high levels of spatial heterogeneity, regression models must be supported by spatial econometric models.
The study conducted represents a starting point for applications to real case studies that will allow to test the defined model
Artificial neural networks and impact of the environmental quality on urban real estate values
No full textIn recent decades, the uncontrolled expansion and increasingly rapid urbanization of cities are leading to dramatic consequences, such as the fragmentation of ecological assets, the loss of biodiversity and, more generally, the deterioration of environmental quality. Therefore, it is becoming increasingly urgent to invest in the conservation and restoration of green areas, so that the urban system itself can in turn become a provider of ecosystem services. Such initiatives, besides generating positive environmental and social benefits, can lead to significant increases in the real estate values of the area involved in urban regeneration. The aim of this paper is therefore to characterise an innovative Artificial Intelligence (AI) model to assess the incidence of urban greening on property prices. Specifically, we propose an Artificial Neural Network (ANN) that includes among its inputs also proxy variables of environmental quality. The ANN, besides being little used to predict property prices, can set up non-linear relationships between inputs and outputs, and returns results that perform better than traditional forecasting models. The critical steps of the model concern the choice of input variables and the setting of the ANN. In the second part of the work, an application to a real case study will allow the model to be tested and demonstrate how measures to preserve green areas can have an impact on both the community and urban real estate. In conclusion, the aim is to show how AI models, also by integrating them with traditional forecasting models, can: on the one hand, provide valuers with a more rigorous set of information on property performance; on the other hand, enable to appreciate the impact of environmental externalities on real estate value, with consequent effects on the whole decisionmaking process
Estimating the Declining Discount Rate for the Economic Evaluation of Projects in the Energy and Water Sectors
No full textIn the cost-benefit analysis (CBA), the declining discount rate (DDR) certainly allows to assign the right weight for the long-term effects of investment projects. The DDR gives the opportunity to properly evaluate projects for sustainable development in the water and energy sectors. The estimation model of the DDR based on probabilistic logic solves the problem of the excessive contraction of the project cash flows that occur in temporal instants that are distant from the evaluation one
Environmental reclamation of limestone mining sites in Italy: Financial evaluation, challenges and proposals for sustainable development
Get PDFCurrently the environmental restoration of former extraction sites of limestone materials to be used in construction sector is still an open issue, challenging the opportunities for a more sustainable development of local communities. The present study evaluates the multiple causes underlying the abandonment of former limestone quarries and the lack of their reclamation as well as proposals to promote their environmental restoration. We primarily frame the issue in both the European and Italian regulatory framework. Then, the present study applies an innovative Cost Revenue Analysis to a case study of a generic environmental restoration project of a former extractive limestone site. Such analysis deepens on investment and operating costs, revenues, Net Present Value and Revenue/Costs ratio. Results show that restoration activities, performed in agreement with current regulations, involving the creation of terraces in embankments by means of excavation materials from external construction sites or even acting directly on the existing quarry, are currently discouraging for entrepreneurs, since they do not generate enough revenues to cover the costs of restoration. As a result, we suggest some solutions to strengthen the current regulatory and political framework, to make the restoration activities more convenient in financial terms. Such solutions would be also beneficial for the society and environment
Intergenerational Discounting in the Economic Evaluation of Projects
No full textThe Social Discount Rate (SDR) is among the most critical parameters of the Cost-Benefit Analysis (CBA), because it strongly conditions the results. In the case of economic evaluations, that is when the analyses are conducted from the point of view of the community, the SDR allows to make financially comparable the costs and the benefits that the investment generates
over time. Thus, it influences both the “weighting” of the cash flows temporal distribution and the measure of inter-generational equity associated with the project. Extremely important issues for those interventions that display their effects on a very long time horizon. In these circumstances, the traditional discount procedures show limits because they end up excessively reducing the financial terms that occur over a certain period. A possible solution to this problem is the use of hyperbolic discount procedures through declining discount rate (DDR).
In the present paper we intend to first outline in essential terms the theoretical framework of the approaches proposed in the literature for the estimation of the DDR. It is about the Consumption-Based Approach to DDRs and the Expected Net Present Value (ENPV). In the second part of the study a critical examination of the same approaches is proposed, in order to highlight their limitations and prominent theoretical aspects. These elements are useful to outline research perspectives for the characterization of an innovative model for estimating the declining discount rate, which can reduce at the same time the theoretical problems and the operational difficulties of the estimation methods currently used
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