Economie

Industrialization → cities

• Transport costs of products

• Transport costs of people

Suburbanisation → cities

• Industry (space needs, congestion, environmental legislation…)
• Capital mobility
• Tertiary sectror (offices, retail, parking)
• Lower transportation costs
• …

Role of capital

 Labour/Capital ratio decreases
 Capital mobility increases
 Deserting problematic places and populations
 Deurbanization signals erosion of value of physical and human capital

Spatial relationships

f(capital, labour, companies) = formation, functioning, development of cities

Cost Benefit Analysis

the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision

Flyvbjerg effect

how large projects are approved ex-ante on overly optimistic cost and benefit estimates (due to optimism bias and strategic misrepresentation), while ex-post they systematically show cost overruns and benefit shortfalls

Net Present Value

de som van alle toekomstige kosten en baten, verdisconteerd naar het heden. Is de NPV positief, dan is het project rendabel.

IRR = Internal Rate of Return (interne rentevoet)

e disconteringsvoet waarbij de NPV precies nul is. Is de IRR hoger dan de gevraagde minimumopbrengst (de discontovoet/hurdle rate), dan is het project aantrekkelijk.

Strengths CBA

 Clear, well-known, widespread
 Gathers different dimensions (time & space)
 Considers alternatives
 Obliges decision taker to consider winners and losers
 Allows calculation of optimal scale

Methodological critique CBA

 Limited theoretical base (e.g. i & N)
 Absence of (quality) standards
 Often neglects uncertainty
 Neglects distributional aspects
 Non-convincing treatment of non-monetary impacts
 Aspect of time
 Institutional bias: insufficient attention to alternatives and excessive optimism for effectiveness measures

External critique CBA

 One person is not an isolated individual
 Preferences are endogenous
 Decision making should seek consensus
 Ethical considerations on the use environment and nature

Abatement costs

Costs to reduce environmental disturbances

Private character

Damage costs

external effect/cost the causer passes on to third parties (real costs)

public character

Optimal public choise

Main policy instruments

1. Permits free permission to emit
- q#, implies the obligation to reduce [q°-q#]
2. Taxes,
- Levies pay for every unit of emission q
3. Tradable Permits
- hybrid of permit and levy final result depends on blending doses

Urban planning

a technical and political process that is focused on the development and design of land use and the built environment, including air, water, and the infrastructure passing into and out of urban areas, such as transportation, communications, and distribution networks and their accessibility.

Hedonic pricing

Estimation of the implicit marginal price of the attributes of a property by estimating the relationship between these attributes and the property’s sale price or assessed value

Discrete choice experiment

Stated preferences method: based on preferences expressed for a good/service (new urban strategy)

Survey-based methodology

Neo-classical theory, precisely in welfare economics

Creation of a hypothetical scenario that defines the new strategy to be assessed and the institutional context in which it would be provided

Environmental scenarios are defined by attributes (characteristics), including payment (or cost)

The steps of the discrete choice experiment

•Define Hypothetical scenario

•Define attributes and levels (literature review, focus groups)

•Pilot study 

•Final survey

•Analyse the data

•Provide Recommendations to policy-makers