Assignment 3 Econ260 Yueqi Luo 301441417 Canrui Luo 301313667 Puneet Puneet 301417048 Question 1 Question 2 The reason that an environmental economist could be interested in estimate of “a” could be: This number has correlated with the buyers’ own preference when they are considering the house’s utility for themselves, it is di erent between every single ff ff person but all are important as a element that could a ect the house prices. Assignment 3 Econ260 Question 3 1. Once the policy has started, rms at Vancouver will choose to move to Toronto with no migrate costs. Some of workers would also move to Toronto since they will lost their job if don’t. 2. First, the demand of house in Vancouver will rise, which could lead its price increase. Same with Toronto, since lots of workers are moving in, the demand will also increase. The question is, rich people will mitigate to Vancouver because they have higher WTP on low pollution, but both old and new workers in Toronto cannot a ord expensive houses. Which means Vancouver’s house price will be higher than fi ff Toronto.