This paper presents a model for the evaluation of environmental and urban improvements on the islands of the Venetian lagoon. The model simulates the changes in residential real estate values using a value function integrated in a geographical database which provides spatial distributions of values changes. The fairly weak market signals, fragmented demand and strong externalities, and the scarcity of market data available do not permit the use of econometric models for value appraisal. Appropriate hedonic-hierarchical value functions are calibrated on the basis of a set of indicators of the characteristics of the buildings and the location. Some applications of the model are illustrated simulating two scenarios of future interventions which are actually being discussed or realised and involving the island of Murano, Burano and S. Erasmo in the Venice Lagoon. The interventions considered are: subway beyond the lagoon connecting Murano with Venice and the mainland, and the solution of "high water" problems on Murano, Burano and S. Erasmo.

Decision making for the management of water resources is a complex and difficult task. This is due to the complex socio-economic system that involves a large number of interest groups pursuing multiple and conflicting objectives, within an often intricate legislative framework. Several Decision Support Systems have been developed but very few have indeed proved to be effective and truly operational. MULINO (Multisectoral, Integrated and Operational Decision Support System for Sustainable Use of Water Resources at the Catchment Scale) is a project funded under the Fifth Framework Programme of the European Research and the key action line dedicated to operational management schemes and decision support system for sustainable use of water resources. The MULINO DSS (mDSS) integrates hydrological models with multi-criteria decision methods and adopts the DPSIR (Driving Force - Pressure - State -Impact - Response) framework developed by the European Environment Agency. The DPSIR was converted from a static reporting scheme into a dynamic framework for integrated assessment modelling (IAM) and multi-criteria evaluation procedures. This paper presents the methodological framework and the intermediate results of the mDSS tool through its application in a pilot study area located in the Watershed of the Lagoon of Venice.