A hybrid choice modelling approach to estimate the trade-off between perceived environmental risks and economic benefits

Hazardous facilities raise issues of public acceptance, largely driven by citizens' beliefs, which should be thor-oughly understood to inform assessment of welfare changes and possible compensation measures for local populations impacted by their presence. Modelling the socio-psychological drivers of public acceptance would help such understanding, yet this approach is seldom used in project appraisal. The current paper aims at filling this gap, in a valuation study dealing with a military facility located in Sardinia (Italy). A hybrid choice model is applied to the data, which integrates a rich socio-psychological framework with the choice model, resulting in a complex multi-layer structure. Results show that place attachment, sense of community and trust in institutions influence the perception of environmental and health risks, and the perception of economic benefits. The latter factors are negatively correlated and directly influence the utility of the attributes characterising the alternatives, driving the preference toward the proposed scenarios. These findings have important practical implications, giving guidance to calibrate welfare compensations and to define policy measures aimed at socio-economic regeneration.