The Economic Theory and Measurement of Environmental Benefits

Frontmatter......Page 1
Contents......Page 5
Preface......Page 9
1 - Introduction......Page 11
1 The utility function......Page 18
2 Utility maximization......Page 21
3 Demand functions......Page 22
4 The indirect utility function......Page 24
5 The expenditure function......Page 26
6 The compensation function......Page 28
1 Money measures and areas under ordinary demand curves......Page 32
2 Path-independency conditions and the constancy of the marginal utility of income......Page 36
3 The compensating and equivalent variations......Page 40
4 Two examples......Page 45
Appendix......Page 48
1 A comparison of different money measures of utility change......Page 51
2 Aggregation over individuals......Page 56
3 Estimation of consumer surplus......Page 59
Appendix......Page 64
1 Quantity-constrained utility maximization......Page 66
2 Consumer's surplus under rationing......Page 69
3 An example......Page 71
4 Compensating and equivalent variations (surpluses) in quantity-constrained situations......Page 72
5 Some further results......Page 75
Appendix......Page 78
6 - Public goods and externalities in consumption......Page 82
1 A utility maximizing household consuming private and public goods......Page 83
2 Public goods and uncompensated money measures of utility change......Page 84
3 Compensating and equivalent variations......Page 86
4 On the properties of money measures......Page 89
5 External effects, quality changes, and market data......Page 92
Appendix......Page 96
1 Survey data......Page 103
2 A study based on the bidding technique......Page 105
3 Hedonic prices......Page 114
4 A property value study......Page 116
5 A comparison of survey and hedonic approaches......Page 121
6 Utility functions and demand equations......Page 124
7 The travel cost method......Page 125
8 Some further notes on the travel cost method and similar approaches......Page 132
8 - Discrete choice models and environmental benefits......Page 136
1 Behaviour functions when some goods are mutually exclusive......Page 137
2 Critical price levels and corner solutions......Page 141
3 Consumer surplus measures in the discrete choice case......Page 144
5 On the relevance of the travel costs method......Page 146
6 Econometric models......Page 150
7 Estimating the value of a hunting permit from discrete response data......Page 153
9 - Consumer's surplus in an intertemporal context......Page 157
1 An intertemporal model......Page 158
2 Overall versus instantaneous surplus measures......Page 160
3 A model with renewable resources......Page 163
4 The Brown--Hammack model for allocation of prairie wetlands......Page 165
5 Estimation of the Brown--Hammack model......Page 168
6 Aggregation of intergenerational welfares......Page 170
10 - Welfare change measures in a risky world......Page 173
1 Risk measures and the properties of the utility function......Page 174
2 Consumer's surplus under price uncertainty......Page 177
3 Discrete choice under uncertainty: housing tenure......Page 180
4 Intertemporal models......Page 183
5 Expected consumer's surplus, option price and option value......Page 186
Appendix......Page 192
1 On the total value of a resource......Page 193
2 Uncertain supply of an environmental asset......Page 197
3 Access value......Page 200
4 Estimating option prices for wildlife resources......Page 202
5 Quasi-option value......Page 204
6 Some concluding remarks on the choice of money measure in a risky world......Page 207
7 On directions for future research......Page 210
Notes......Page 213
Bibliography......Page 216
Index......Page 230