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Urban greenery management problem

Tomasz Zylicz

No 2019-21, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: I look at the urban greenery management as a principal-agent (PA) problem. In the case analysed in this paper the city mayor (the higher level) wants to maximize the pollution-mitigation capacity of trees planted, while the greenery manager (the lower level) wants to maximize the municipal budget devoted to planting trees subject to some constraints on the outcome of this activity. While the higher level wants certain services to be delivered in the future actually, the lower level is interested in potential benefits provided by the most attractive tree species, even though they will be delivered only partially and probably not in the long run. As a result, the theoretical "residual claimancy" condition required for so-called incentive compatibility does not hold, and the species composition of trees planted is different from what it would have been if the PA model implemented was incentive compatible.

Keywords: Principal-agent models; urban trees (search for similar items in EconPapers)
JEL-codes: H49 Q53 Q57 R59 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2019
New Economics Papers: this item is included in nep-env, nep-ore and nep-ure
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https://www.wne.uw.edu.pl/index.php/download_file/5264/ First version, 2019 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2019-21

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