The application of compensatory rules to model private sector and land use investment

Abstract

Paper presented at the 22nd Annual Southern African Transport Conference 14 - 16 July 2003 "National issues affecting the movement of people and goods - strategic approaches", CSIR International Convention Centre, Pretoria, South Africa. ABSTRACT: There is a belief that private sector investment occurs in non-optimum locations in terms of the development of the city. If urban planners were able to understand private sector decision-making, they could plan to change investors current behaviour into investing at locations that are considered more optimal in terms of the city as a whole rather than the individual investor. This creates a need to predict the probability of private sector investment in a proposed development location, node or corridor. Decisions may be made in two stages: in the first stage, alternatives are screened by some non-compensatory process, and in the second stage, the remaining alternatives are evaluated in more detail, perhaps with a compensatory decision rule. In compensatory decision-making, the favoured option is selected by optimising a single objective function. It is reflected by multi-attribute utility models and is widely accepted as reflecting a rational procedure of choice This paper investigates the use of compensatory rules to model private sector land use investment. Stated preference interviews were used to collect data. Logit modeling was used to set up a model. It was found that developers have a specific mind-set on where they want to develop. It is however possible to change their location decisions by providing certain incentives. The study has been successful in providing guidelines as to the change and the amount of change needed in existing attributes to induce that the investment be made in specific areas.