the effects of induced mood on bidding in random nth price auctions we investigate the effects of mood on decisions in random nth price auctions there are two possible ways in which mood can affect behavior 1 mood can affect the valuation of the object being auctioned or the willingness to pay wtp and 2 mood can affect the bidding behavior itself to identify these two possible effects we study decisions with induced values and with homegrown values our data show that positive mood generates an upward bidding bias in the induced value condition however only under certain conditions do we observe weak mood effects on wtp

extended producer responsibility for waste televisions and computers a regulatory evaluation of the australian experience abstract high annual volumes of television and computer waste presents a challenge to australian communities resulting in the development of extended producer responsibility epr legislation this study aims to establish through the use of public interest theory whether epr legislation in australia was in the public interest using a regulatory analysis the results show that during the first 3 years of the scheme over 130 liable parties joined co regulatory arrangements each year to fund upstream recycling services for television and computer waste in program terms the scheme has been highly successful recycling over 130 000 tonnes of metals leaded and non leaded glass plastics and other materials while limiting landfill transfers to approximately 6900 tonnes all at a cost of a 50 60 million per annum to producers the scheme has also seen a range of upstream recycling partnerships established between the co regulated administrators and formal technical and social enterprise waste management organizations however while the upstream material recovery rate is steady at approximately 95 the results suggests that exporting waste for downstream processing will continue in the future analysis also points to substantial funding for over target collections downstream recycling infrastructure and landfill diversion strategies as critical for averting severe environmental impacts from e waste dumping the study concludes by suggesting that while the successes of epr scheme are in the public interest its potential deficiencies could limit such benefits and therefore need to be addressed notably the scheme could be enhanced through the application of improved recycling target methodologies including the estimation and forecasting of domestic waste electrical and electronic equipment weee stock levels

estimating the public good value of preserving a local historic landmark the role of non substitutability and citizen information this study applies stated preference methods to estimate the public good values of preservation and restoration of a local historic landmark in a medium sized us city the survey device centres on

firm behavior under quantity controls the theory of virtual quantities the theory of virtual quantities the dual to virtual prices provides a framework to analyze competitive multiproduct firm behavior under multiple quantity controls on inputs and outputs including command and control quotas and transferable property rights the framework addresses the firm s reactions to regulatory controls impacts of adding or dropping quantity controls inferring unrationed from rationed production and conversion from command and control quotas to cap and trade systems with transferable property rights and secondary market behavior the paper develops reasons for failure of quasi concavity of technology extends the elasticity of intensity s properties and integrates the virtual price and virtual quantity frameworks virtual quantities are applied to assess potential firm responses to quantity controls and a potential transferable property right in a malaysian fishery

estimating willingness to pay for improved water quality in the presence of item nonresponse bias this article deals with the problem of item nonresponse in contingent valuation surveys using a payment card method by applying a grouped data sample selection estimation technique that is capable of imputing the missing values conditional upon a respondent s decision to answer a willingness to pay question the advantage of the technique lies in its ability to utilize all of the information in the sample permitting a more efficient estimation in the presence of item nonresponse bias the major determinants of willingness to pay appear to be household income number of children education perception of existing water quality and identification with environmental issues copyright 2003 oxford university press

a test of the theory of reference dependent preferences eight alternative methods of eliciting preferences between money and a consumption good are identified two of these are standard willingness to accept and willingness to pay measures these methods differ with respect to the reference point used and the dimension in which responses are expressed the loss aversion hypothesis of tversky and kahneman s theory of reference dependent preferences predicts systematic differences between the preferences elicited by these methods these predictions are tested by eliciting individuals preferences for two private consumption goods the experimental design is incentive compatible and controls for income and substitution effects the theory s predictions are broadly confirmed

divergence in alternative hicksian welfare measures the case of revealed preference for public amenities this paper investigates the divergence between the two hicksian welfare measures of non traded amenity improvement associated with housing first the hicksian surplus measures for amenity changes are analytically developed based on explicit specification of utility structures a hedonic two stage approach is then applied to empirically show that for quantity changes in contrast to hypothetical markets divergence in real market is small the paper also analytically develops expressions for the income and substitution effects and empirically shows that for a given income effect the greater the substitution effect the smaller the divergence between the two measures copyright 2002 john wiley sons ltd

pigou s law and the proportionality of income and price elasticities of demand abstract pigou s law states that for preferences characterized by additively separable utility and constant marginal utility of income and goods with a negligible budget share there is a proportional relationship between the income and uncompensated own price elasticities of demand the factor of proportionality being the income elasticity of the marginal utility of income we derive a general version of pigou s law that relaxes these assumptions we then show that several published variants of pigou s law are special cases of the general version for the additional restrictions on preferences and budget shares they impose

status quo maintenance reconsidered changing or incomplete preferences after reviewing the evidence for status quo maintenance sqm i consider how to reconcile sqm with traditional consumer theory behavioural economists usually let agents preferences change as a function of their endowments treating the same person with different endowments as a set of distinct agents many properties of preferences then become immune to empirical test and it becomes impossible to judge whether an agent s decisions make the agent better or worse off this impedes prediction of when decision rules are likely to change sqm can alternatively be explained with unchanging preferences if preferences are incomplete sqm is then consistent with self interest and there is no reason why it should not persist

incorporating discontinuous preferences into the analysis of discrete choice experiments data from a discrete choice experiment on improvements of rural landscape attributes are used to investigate the implications of discontinuous preferences on willingness to pay estimates using a multinomial error component logit model we explore differences in scale and unexplained variance between respondents with discontinuous and continuous preferences and condition taste intensities on whether or not each attribute was considered by the respondent during the evaluation of alternatives results suggest that significant improvements in model performance can be achieved when discontinuous preferences are accommodated in the econometric specification and that the magnitude and robustness of the willingness to pay estimates are sensitive to discontinuous preferences

complementarity and the measurement of individual risk tradeoffs accounting for quantity and quality of life effects this paper considers the factors responsible for differences with age in estimates of the wage compensation an individual requires to accept increased occupational fatality risk we derive a relationship between the value of a statistical life vsl and the degree of complementarity between consumption and labor supplied when health status serves as a potential source of variation in this relationship our empirical analysis finds that variations in an individual s health status or quality of life and anticipated longevity threats lead to significant differences in the estimated wage risk tradeoffs we describe how extensions to the specification of hedonic wage models including measures for quality of life and anticipated longevity threats help to explain the diversity in past studies examining how the estimated wage risk tradeoff changes with age

on inferring individual behaviour from market behaviour in a predetermined quantities model this article develops the theoretical basis of individual behaviour recovered from market behaviour in a predetermined quantities model as applied economists argue an inverse demand system may be empirically sound within the framework of classical demand theory however it should not lead to the conclusion that the market responses for changes in quantity should be used to see welfare effects instead of the individual responses by price changes as far as the market is concerned it shows theoretically and empirically how individual responses can be recovered from market responses in a predetermined quantities model it suggests that the fundamental results of this article should be used on interpreting empirical results from the predetermined quantities models

determinants of participation in accelerated vehicle retirement programs one potential way to reduce hydrocarbon emission is through accelerated vehicle retirement programs however it is difficult to forecast participation rates in these programs because the number and characteristics of participants are likely to vary with the price offered to attract old cars this paper presents a theoretical model of the owner s car tenure and scrappage decision an econometric model of participation is then developed and estimated using data from a recent old vehicle scrap program in delaware participation rates at different possible offer prices are then predicted

the scope trials variation in sensitivity to scope and wtp with directionally bounded utility functions abstract sensitivity to scope refers to the property that willingness to pay for an environmental amenity is an increasing function of the scope of the amenity measurements of the degree of sensitivity to scope are commonly proposed as a test for the reliability of contingent valuation studies we evaluate the traditional scope test using neoclassical utility functions that are directionally bounded we provide a formal definition of sensitivity to scope and show that directionally bounded utility functions can produce arbitrarily small degrees of sensitivity to scope we conclude that a failure to satisfy existing scope tests should not be used as a prima facie basis for rejecting contingent valuation studies this does not imply that small degrees of sensitivity to scope should always be viewed as acceptable rather the results of scope tests should be considered more carefully with attention given to the substitutability of market and non market goods

gender specific starting point bias in choice experiments evidence from an empirical study abstract in this paper we test whether preferences and willingness to pay estimates obtained in a choice experiment study are susceptible to starting point bias as is often the case in dichotomous choice contingent valuation studies on the basis of a multinomial probit model we find that preferences are indeed susceptible to starting point bias in a split sample design our results suggest that varying the price levels displayed in a so called instructional choice set presented prior to the actual preference eliciting choice sets significantly impacts respondents preferences and willingness to pay for protecting danish nature areas from new motorway development in particular our results show that the bias is gender specific only female respondents are significantly affected results further reveal that the impact of the starting point bias decays as respondents evaluate more and more choice sets this supports the discovered preference hypothesis and on the basis of this we suggest a number of ways to potentially mitigate the starting point bias

what do income tests tell us about the gap between wta and wtp for public goods abstract theory relates the gap between wta willingness to accept compensation and wtp willingness to pay to the income elasticity of wtp it has been suggested that empirical estimates of the income elasticity of wtp can therefore be used to test whether an observed gap between wta and wtp is consistent with rational behavior we examine this issue for the case of non market public goods we identify the theoretically appropriate tests of income sensitivity and examine conditions for valid income sensitivity tests we show that income tests may provide false signals in common settings indicating an inconsistency where none exists

how do landowners price their lands during land expropriation and the motives behind it an explanation from a wta wtp experiment in central beijing compensation paid to property owners for land expropriation is always a controversial topic partly due to the difficulty in revealing households true valuation of their housing this paper estimates and discusses the widely observed willingness to accept willingness to pay wta wtp gap for surveyed residents of their own houses during land expropriation by testing several hypotheses interpreting the wta wtp disparity from previous studies the paper tries to establish the incentive for households decision making the paper employs a contingent valuation method with data from 315 household interviews in central beijing china the paper reports an average wta wtp ratio of 3 74 and reaches the conclusion that in our case the high compensation required by property owners largely derives from opportunistic pricing behaviour rather than sentimental attachment to the dwellings that is unobservable in the market price and that the wta of the residents is intentionally overpriced

a new explanation for the wtp wta disparity abstract we propose a new explanation for the wtp wta disparity in experiments and surveys uncertainty irreversibility and limited learning opportunities can generate commitment costs driving a wedge between wtp and wta we present experimental evidence that supports our hypothesis

exploring preference anomalies in double bounded contingent valuation double bounded dichotomous choice dbdc contingent valuation offers increased efficiency of willingness to pay wtp estimates compared with the single bounded format however evidence suggests dbdc generates anomalous respondent behaviour this paper provides the first investigation and explanation of these anomalies in health results suggest the incentives for truthful preference revelation are altered in the presence of a follow up question this result is found using both regression techniques and analysis of raw responses although findings suggest very certain respondents exhibit less anomalous behaviour inconsistencies remain across bounds the results of this study question the use of iterative valuation formats

on the measurement of welfare for market and nonmarket goods a numerical approach extending vartia s 1983 framework the paper presents a simple numerical approach to the measurement of welfare for market and nonmarket goods on the basis of an incomplete mixed demand system the method allows the determination of exact welfare measures it provides a flexible and well founded alternative to ad hoc methods based on consumer surplus

understanding how income influences willingness to pay for joint programs a more equitable value measure for the less wealthy the preponderance of evidence from many studies is that less wealthy households are subjected to greater exposure per capita and in aggregate to air pollution water pollution and toxic wastes it also is the case that the less wealthy are provided with a disproportionately low amount of other programs to enhance amenities provided by the natural environment such as recreational resources and high quality esthetic opportunities both quality and quantity however to date no study has quantified the scale of this effect on the less wealthy as compared to their more wealthy counterparts when it comes to policy choices made on the basis of benefits analysis this study provides a new equity adjustment method to measure quantitatively the effect of this inequity in the case of public goods

biased valuations damage assessments and policy choices the choice of measure matters abstract damages from for example an oil spill can be measured by how much people are willing to pay to avoid them or by the minimum compensation they demand to accept them and decisions to clean up can be justified by the willingness to pay to do it or by the compensation necessary to forgo it contrary to the usual official and unofficial conventions that the choice of measure is of no matter the empirical evidence and intuitions of most people strongly suggest otherwise the appropriate choice of measure appears to turn not on legal entitlements but on the reference state people use to judge negative and positive changes a criteria that is likely to call into question most estimates of the damages of increased health risks and the value of environmental mitigation efforts

willingness to pay and willingness to accept some evidence of an endowment effect the source of the disparity between willingness to pay wtp and willingness to accept wta measures of value has been the subject of recent debate in the literature this paper presents the results of a pilot experiment designed to test whether contrary to the findings of shogren et al 1994 the endowment effect might be a significant source of the wtp wta divergence the results are a direct contradiction of what the substitutability argument would predict and thus indicate that the endowment effect cannot yet be dismissed as a possible driving force behind the disparity

consistency between contingent valuation estimates a comparison of two studies of uk national parks bateman i willis k and garrod g 1994 consistency between contingent valuation estimates a comparison of two studies of uk national parks reg studies 28 457 474 recent years have seen a significant increase in the application of the contingent valuation method to the evaluation of environmental preferences in the uk recent theoretical and methodological developments suggest that this increase is likely to be sustained for the foreseeable future this paper examines the issue of consistency across studies carried out to date in the uk attention is initially focused upon two major studies which allow the comparison of a number of findings analysis is then extended to a large number of smaller studies these comparisons suggest that the results obtained to date are both consistent and logically ordered with reference to the environmental good and the change in provision under consideration across studies bateman i willis k et garrod g 1994 la coherence des estimations contingentes une

approximating wtp and wta for environmental goods from marginal willingness to pay functions abstract willingness to pay wtp and willingness to accept wta for a change in the quantity of an environmental good can be represented by corresponding hicksian welfare measures the paper suggests a simple method of approximating wtp and wta given the information about the marginal willingness to pay mwtp for it it demonstrates that a polynomial based on the mwtp function allows to approximate the hicksian measures which may differ considerably much better than consumer s surplus in quantity space

a review of wta wtp studies abstract willingness to accept wta is usually substantially higher than willingness to pay wtp these constructs have been studied for roughly 30 years and with a wide variety of goods this paper reviews those studies we find that the less the good is like an ordinary market good the higher is the ratio the ratio is highest for non market goods next highest for ordinary private goods and lowest for experiments involving forms of money a generalization of this pattern holds even when we account for differences in survey design ordinary goods have lower ratios than non ordinary ones we also find that ratios in real experiments are not significantly different from hypothetical experiments and that incentive compatible elicitation yields higher ratios

electricity outages in ghana are contingent valuation estimates valid african countries experience persistent and serious energy outages but while multiple valuation studies provide estimates of the costs of electricity outages in high income countries evidence is scarce for lower and middle income countries the few studies that assess the value of reliable energy supply rely on the contingent valuation method that is under wide scrutiny this paper aims to provide new estimates of households willingness to pay to reduce electricity outages for ghana and contributes to the debate on the validity of contingent valuation results for energy reliability our results suggest that households are willing to pay ghs 67 17 per month for reliable electricity supply equivalent to 7 of respondents income the results of tests for hypothetical bias wtp wta disparity and income effects suggest that the contingent valuation estimates from this study are robust and can support decision makers in prioritizing energy policies and investments

precision of dichotomous choice contingent valuation welfare measures some simulation results the purpose of this research is to examine the roles of individuals heterogeneous economic factors and model misspecification in dichotomous choice contingent valuation welfare measurement willingness to pay for an improvement of environmental quality is studied simulation results indicate that the precision of welfare estimates increases with individuals income levels and decreases with the price of the quality related good the dependence of the consumption of the quality related good on the environmental quality also affects the reliability of welfare estimates

experiments on the difference between willingness to pay and willingness to accept comment reply willingness to pay wtp and willingness to accept wta measures of welfare change have been found to differ substantially when elicited from surveys or experimental market transactions conventional economic theory suggests that the difference between wtp and wta should be smaller than those observed in empirical tests this study focuses on the hypothesis that the availability of substitutes for the good being evaluated affects the difference between the two measures the results suggest that the existence of a substitute does reduce the difference between wtp and wta however the difference between these two measures is significant with or without substitutes

contingent valuation a practical alternative when prices aren t available a person may be willing to make an economic tradeoff to assure that a wilderness area or scenic resource is protected even if neither that person nor perhaps anyone else will actually visit this area this tradeoff is commonly labeled passive use value contingent valuation studies ask questions that help to reveal the monetary tradeoff each person would make concerning the value of goods or services such surveys are a practical alternative approach for eliciting the value of public goods including those with passive use considerations first i discuss the exxon valdez oil spill of march 1989 focusing on why it is important to measure monetary tradeoffs for goods where passive use considerations loom large although discussions of contingent valuation often focus on whether the method is sufficiently reliable for use in assessing natural resource damages in lawsuits it is important to remember that most estimates from contingent valuation studies are used in benefit cost assessments not natural resource damage assessments those working on benefit cost analysis have long recognized that goods and impacts that cannot be quantified are valued implicitly by giving them a limitless value when government regulations preclude certain activities or giving them a value of zero by leaving certain consequences out of the analysis contingent valuation offers a practical alternative for reducing the use of either of these extreme choices i put forward an affirmative case for contingent valuation and address a number of the concerns that have arisen

the ecosystem services framework and natural capital conservation work at the interface of ecology and economics has inspired a major transformation in the way people think about the environment increasingly ecosystems are seen as capital assets with the potential to generate a stream of vital life support services meriting careful evaluation and investment we first present the concepts underpinning the ecosystem services framework esf laying out the scope and limitations of the approach we then describe the major challenges in making the esf operational i detailed information at scales relevant to decision making ii practical know how in the process of institutional design implementation and iii compelling models of success in which economic incentives are aligned with conservation we close with a brief review of pioneering experiments now underway worldwide which illustrate how these challenges can be overcome

understanding the disparity between wtp and wta endowment effect substitutability or imprecise preferences abstract although it is now generally accepted that willingness to accept exceeds willingness to pay disagreement remains as to why this disparity is shown to persist even when controlling for learning substitutability and respondents imprecision thus lending further support for the endowment effect

valuing cultural heritage in developing countries comparing and pooling contingent valuation and choice modelling estimates a substantial part of the united nation s world heritage sites whss can be found in developing countries but many of them are in a bad state thus there is a need to document the social benefits of these global goods in order to justify the costs of restoration and preservation programmes rpps this study adds to the scarce literature on economic benefits of whss in developing countries and reduces the need to perform very uncertain benefit transfers from european or us valuation studies we apply contingent valuation cv and choice modelling cm to estimate the social benefits of rpps for the my son world cultural heritage site in vietnam both to foreign visitors and the local residents we then compare the estimates from the cv and cm methods and pool the results from the two methods the results show that both cv and cm are suited to estimating the economic benefits of preserving cultural heritage of my son the two methods produce very similar results which can be interpreted as a test of convergence validity the pooling results give evidence to show that the cv and cm models have the same underlying preference structures thus these valuation models can be successfully used in cost benefit analyses to assess the benefits to cultural heritage of measures to reduce air pollution soil erosion climate change and other causes to deterioration of cultural heritage sites

willingness to pay for gains and losses in visibility and health two different willingness to pay responses are compared willingness to pay to avoid loss of air quality and willingness to pay to obtain gains in air quality contingent valuation data were used to estimate bid functions for these two types of responses for visibility and health comparison of the estimated models indicates that in addition to magnitude differences gains and losses for visibility and health are affected differently by health status risk perceptions and other risk related variables results for the loss measure are more reliable in terms of variability of response and econometric modeling

substitutability experience and the value disparity evidence from the marketplace abstract recent empirical evidence suggests that important disparities exist between willingness to pay and compensation demanded for the same good these results which clearly contradict closely held economic doctrines have led some influential commentators to call for an entirely new economic paradigm to displace conventional neoclassical theory this study examines the generality of these experimental findings by going to a well functioning marketplace and examining more than 350 individual decisions across two incentive compatible elicitation mechanisms the data suggest that behavior of individuals with intense experience approaches neoclassical predictions any observed wta wtp disparity amongst this group is negligible

weak complementarity path independence and the intuition of the willig condition abstract weak complementarity is usually invoked for valuing public goods using information on private goods however using uncompensated demands requires a second condition the willig condition this paper present an intuitive explanation of the willig condition and shows that the alternative versions are equivalent to a path independence condition for line integrals this condition is fulfilled for compensated demands but not uncompensated demands except in restrictive special cases it is shown that this is a type of quasi homotheticity and requires that the income flexibility of quality must equal the income elasticity of the weak complement the importance and restrictiveness of the willig condition are shown using three alternative functional forms

willingness to pay and willingness to accept how much can they differ comment i agree with the point made by edoh y amiran and daniel a hagen 2003 that there can be a substantial or even infinite divergence between the wta and wtp for a public good even where there is a nonzero elasticity of substitution between market goods and the public good provided that the indifference curves are asymptotically bounded with respect to market goods in the manner they describe this is an important point they are also correct to point out that the elasticity of substitution is a local concept whereas their asymptotic boundedness condition applies also for discrete changes my 1991 paper used a local analysis because it was following the structure of the analysis in robert d willig 1976 and alan randall and john r stoll 1980 i wanted to show that while randall and stoll appeared to extend willig s local result on wta versus wtp from price changes to changes in the quantity of a public good the relevant elasticity was in fact different and involved the substitution elasticity as well as the income elasticity i view these points by amiran and hagen as not two separate results but essentially the same result their asymptotic boundedness condition generalizes my zero elasticity of substitution condition to discrete changes the asymptotic boundedness condition can be expressed as follows assuming a bivariate utility function u x q and given a reference point x q associated with a reference utility level u u x q there exists some q q such that for all q q there exists no x such that u x q u in other words no amount of x can substitute for the reduction in public good from q to q q in the case of a zero elasticity of substitution q q but as amiran and hagen show in their theorem 1 this is unnecessarily restrictive when dealing with a discrete reduction in q furthermore their theorem 2 can be viewed as a special case of their theorem 1 in which q 0 which makes q an essential commodity it is well known in consumer theory that the wta to avoid the loss of an essential market good is infinite their theorem 2 extends this result to the case of an essential nonmarket good but as their theorem 1 shows essentialness is not necessary for an infinite wta the boundedness condition is the key and this implies a fundamental lack of substitutability between money market goods and the public good

information and the divergence between willingness to accept and willingness to pay abstract there is considerable empirical and experimental evidence that there is a divergence between willingness to accept compensation to give up a good and willingness to pay to obtain a good this divergence persists even when the good in question is small relative to income a result in apparent conflict with standard economic theory this paper develops a theoretical bidding model with costly information acquisition to explain this divergence the model generates a gap between offers to sell and bids to buy consistent with the experimental results we argue that the model does a better job of explaining empirical and experimental data than either of the two commonly invoked theoretical explanations the endowment effect and the substitution effect

scientific numerology preference anomalies and environmental policymaking recently an abundance of experimental evidence has been gathered that is consonant with the notion that individual preferences are inconsistent and unstable these empirical results potentially undermine the theoretical foundation of welfare economics as the degree of preference lability claimed suggests that perhaps no optimization principles underlie even the most straightforward of choices yet policymakers in the environmental arena continue to prescribe policies based on economics based methods that are constructed on the very principles that have been directly refuted are policymakers creatures of habit that move at glacial speed or is there something deeper behind their inertness in this study i explore this issue within the u s context and argue that there is some rationality behind current public policy decisionmaking i then explore whether the empirical evidence supports the view that policymakers should take preference anomalies seriously as a case study i focus on some of my recent findings on preference inconsistencies in the marketplace

benefit evaluation of the country of origin labeling in taiwan results from an auction experiment this research is aimed at investigating the consumer s preference for food produced in taiwan and the economic benefits for the country of origin labeling cool the study used vickrey second price sealed bid auction to elicit the consumer s willingness to pay wtp for products under cool the study compared the bid functions estimated with tobit model and the premium functions estimated with ordinary least squares ols due to price affiliation it is more reliable to use the estimated premium functions the estimated premiums are 67 5 84 7 and 99 for taiwan products over their alternatives of china olives china oolong tea and vietnam oolong tea respectively the study concludes that enacting and rigorously enforcing a cool law would increase economic benefits to consumers in taiwan and at the same time placing the imported products in the leveled playing field

inverse demand systems and welfare measurement in quantity space most studies of welfare or cost benefit analyses are concerned with the welfare effects of price changes 11 19 27 33 50 there are however many situations in which policy options are directly related to quantity changes the welfare effects of price changes are analyzed with the traditional demand system in which commodity quantities are determined as functions of their prices the welfare effects of quantity changes on the other hand are associated with the inverse demand system in which commodity prices are dependent on their quantities in conventional welfare analysis of price change prices are taken to be exogenous or predetermined while quantities are endogenous in contrast in welfare analysis of quantity changes quantities are exogenous while prices are endogenous price based or dual welfare measures are relevant when there are well functioning competitive markets and quantities are fully adjusted to changes in prices on the other hand quantity based or primal welfare measures are useful in situations where there are constraints on commodity quantities or when transaction costs impede consumers from fully adjusting to changes in prices the choice between priceand quantity based welfare measures is empirical and proper measurement of welfare effects requires the knowledge as to which variable price or quantity is the exogenous one for individual consumers it may be reasonable to assume that the supply of commodities is perfectly elastic and therefore prices can be taken as exogenous but this assumption may not be tenable for consumers in the aggregate or if highly aggregated economy wide data are used to estimate demand relations at the aggregate level quantities are more properly viewed as exogenous than are prices although individual consumers make their consumption decisions based on given prices the quantities of commodities are predetermined by production at the market level and prices must adjust so that the available quantities are consumed 28 1 2

preference reversals for ambiguity aversion this paper finds preference reversals in measurements of ambiguity aversion even if psychological and informational circumstances are kept constant the reversals are of a fundamentally different nature than the reversals found before because they cannot be explained by context dependent weightings of attributes we offer an explanation based on sugden s random reference theory with different elicitation methods generating different random reference points then measurements of ambiguity aversion that use willingness to pay are confounded by loss aversion and hence overestimate ambiguity aversion this paper was accepted by teck ho decision analysis

does the financing of extended producer responsibility influence economic growth abstract the question of how the financing of extended producer responsibility epr affects the overall performance of the economy is important as products covered by epr comprise an increasing part of the economy in this paper an overlapping generations olg model with endogenous growth is applied to the case and a comparison between two financing schemes an insurance solution and a pay as you go payg solution is made with respect to the effect on the level of production the growth rate the impact of a productivity shock and the risk exposure it is found that in the case of a funded solution both the level of production and the growth rate in production is higher than in the payg case and the short run effect of productivity shock is bigger the policy indication is clear epr should be attached to a financing scheme if welfare is to be maximised

a dynamic explanation of the willingness to pay and willingness to accept disparity a fundamental tenet in neoclassical theory is the basic independence assumption an individual s preferences are assumed to be measured over levels not changes although most theoretical and applied economic models invoke this assumption a wealth of data from laboratory experiments refutes this premise as systemic empirical disparities have been observed between willingness to pay wtp and willingness to accept wta for the same good e g kahneman knetsch and thaler 1990 with wta often observed to be many times larger than wta in an influential line of work hanemann 1991 argues that the large wta wtp disparities that have been observed in the literature can be reconciled with static neoclassical theory via income and substitution effects i but the empirical evidence to date has not conformed well to hanemann s 1991 or any other neoclassical based model 2 if the observed value disparity is inconsistent with neoclassical explanations and is found to be a fundamental component of individual s preferences as per reference dependent theory kahneman and tversky 1979 tversky and kahneman 1991 then a reevaluation of a good deal of economic analysis is necessary in this article we provide a different explanation for the wta wtp disparity a dynamic theory based on the presence of commitment costs and possibly asymmetric beliefs about market opportunities when the value of a good is uncertain wtp and wta will logically reflect compensation for the possibility of learning that the good has a different value than believed at the time of purchase or sale and the cost associated with reversing the purchase or sale decision in its simplest form our model predicts that with objective symmetric beliefs about market opportunities and with perfect substitutability and no income effects there should be no value disparity intuitively the objective cost of delaying the purchase or alternatively reversing the purchase for prospective buyers is isomorphic to the objective cost of reversing or delaying the sale for prospective sellers this symmetry necessarily leads to wta wtp consistent with the neoclassical paradigm importantly however it is an agent s perception of the delay and reversal costs that motivates behavior if agents behave in a manner consistent with the developing literature on cognitive dissonance and or limited memory it is quite plausible for individuals to display an asymmetric perception of the relative costs of selling later depending upon whether they are placed in the role of a buyer or seller 3 this type of asymmetry alone can yield the systematic value divergences observed in the literature indeed we show that even with only slight asymmetries in beliefs of perceived costs our theory can generate considerable value divergences because the actual divergence will depend upon the interaction of this asymmetry with the degree of value uncertainty time preference and lost value of consumption we explore the predictive power of our theory by examining wta and wtp statements of value from consumers in a competitive marketplace the sportscard market although we do not consider the sportscard marketplace particularly worthy of study in its own right it is useful for our purposes for several reasons first it is a natural setting for an examination of preference structures because it provides a rich pool of subjects making decisions in a familiar environment with uncertainty and future learning about the values of traded goods second we can identify factors that arise endogenously such as market experience and impose the remaining controls necessary to implement a clean experiment to explore whether such factors attenuate the value disparity through the channels predicted by our theory our data are striking in that agents display an asymmetric perception of the relative costs of selling later depending upon whether they are placed in the role of a buyer or seller

revealing preferences for leisure time from stated preference data when consumer choice is constrained by time as well as money willingness to pay can be defined with respect to either numeraire the two measures can be related formally within a utility consistent model of choice subject to two constraints furthermore when information is collected on both the respondent s marginal value of time can be identified a system of willingness to pay time and money and the marginal value of leisure time is estimated jointly in an application to california whalewatching and whale stock enhancement the empirical approach can be applied with only minor additions to survey techniques for nonmarket valuation

lagged beliefs and reference dependent utility abstract models of expectation based reference dependent preferences proposes that the reference point to which consumption outcomes are compared is endogenously determined as a function of lagged probabilistic beliefs this paper presents an experiment designed to test some predictions of expectation based reference dependence models the design induces a stochastic reference point via a lottery and then measures valuations for a commodity the experimental results find no effect of the first stage lottery on commodity valuation

do respondents adjust their expected utility in the presence of an outcome certainty attribute in a choice experiment in a stated preference valuation survey the expected benefits of environmental policies are generally presented to respondents without reference to the fact that the predicted outcomes are rarely known with certainty this omission may reduce the credibility of the valuation scenario and contribute to hypothetical bias in the study outlined in this paper a choice experiment was conducted to elicit values for environmental improvements in the great barrier reef australia with outcome certainty included as a separate attribute different specifications of the utility functions which imply different behavioural assumptions about the way choices have been made generate variations in value estimates results showed that respondents incorporate outcome certainty into their decisions but that an expected utility formulation represented by the interaction between environmental protection and likelihood of occurrence underestimated environmental values some environmental protection values appear to be independent of outcome certainty which may be consistent with existence values and other non use categories a partial expected utility model is cautiously recommended

using choice experiments to value the natura 2000 nature conservation programs in finland this paper is concerned with the preferences of the finnish households for a controversial nature conservation program the european union s natura 2000 network since the program was mainly based on biological considerations it met strong public opinions from different interest groups in finland using the choice experimental method we attempt to estimate the values that the finnish households would place on different preservation levels it is found that the mean willingness to accept for a decrease in the nature preservation area is much greater than the mean willingness to pay for an increase by the same amount also the marginal willingness to pay becomes zero after an initial increase in the natural preservation area which is consistent with our earlier findings in a binary choice valuation study policy implications of these results are also discussed in relation to different decision criteria

the value of commuting time in an empirical on the job search model an application based on moments from two samples this article estimates the value of commuting time voct among swedish males in an empirical on the job search model it uses a large sample of employee establishment linked data obtained from administrative registers the sample lacks information on mode choice for the journey to work we therefore estimate a mode choice model on another sample and use this model to link the administrative data to the relevant set of travel times costs and distances the voct is found to be 1 8 times the net hourly wage rate in the sample the relatively high estimate results from a high voct among cohabiting men

sequencing and valuing public goods abstract this paper establishes several propositions concerning the importance of context in valuing public goods it first provides necessary and sufficient conditions for the value of a public good to be independent of context utility constant valuation sequences are considered where public goods are systematically made available or taken away for the case of strict hicksian substitutes willingness to pay for an increase in one of the public goods is strictly decreasing the farther out in a sequence it is valued for the destruction of public goods the reverse is true for willingness to accept compensation sequencing has opposite implications for the assessment of the benefits of providing public goods than for the assessment of the damage from destroying them

contingent valuation controversies and evidence contingent valuation cv has become one of the most widely used non market valuation techniques cv s prominence is due to its flexibility and ability to estimate total value including passive use value its use and the inclusion of passive use value in benefit cost analyses and environ mental litigation are the subject of a contentious debate this paper discusses key areas of the debate over cv and the validity of passive use value we conclude that many of the alleged problems with cv can be resolved by careful study design and implementation we further conclude that claims that empirical cv findings are theoretically inconsistent are not generally supported by the literature the debate over cv however has clarified several key issues related to nonmarket valuation and can provide useful guidance both to cv practitioners and the users of cv results

incentive effects of workers compensation insurance abstract this paper uses micro level data from the current population survey to estimate the determinants of participation in state workers compensation programs in the united states the principal finding is that higher workers compensation benefits are associated with greater participation in the workers compensation program after accounting for a variety of covariates in addition the waiting period is found to have a substantial negative effect on program participation finally time series estimates based on the cross sectional model show that the growth in workers compensation claims in the 1970s corresponds reasonably well with the growth in real benefits in this time period

economic valuation of the environment how citizens make sense of contingent valuation questions this study adopts a qualitative approach in order to investigate how people make sense of contingent valuation cv questions of a global environmental amenity the objective is not only to capture people s motivations and considerations of willingness to pay wtp but also to determine if they adequately comprehend an economic valuation of such public goods the findings indicate that a large proportion of respondents do not interpret the valuation task as intended however this lack of understanding is not always expressed unless probed in relation to the elicitation question and some people have the tendency to provide monetary estimates anyway whatever meaning they attach to these

problems in valuing the benefits of biodiversity protection this paper considers two problems in valuing the benefits of biodiversity protection these are firstly that preferences for biodiversity protection may be lexicographic rather than utilitarian the more individuals for whom this is true the less is cost benefit analysis validated as a means of decision making for biodiversity protection since lexicographic preferences are incompatible with the kaldor hicks compensation test secondly people may be poorly informed about the meaning of biodiversity complicating the use of contingent valuation as a means of measuring preservation benefits this paper first discusses the meaning of biodiversity and trends in diversity over time we offer some empirical evidence with regard to lexicographic preferences consider the implications of having poorly informed consumers and then report the results of a contingent valuation study of biodiversity protection with varying levels of information we find that willingness to pay for biodiversity protection increases with the level of information provided

is food and drug administration policy governing artisan cheese consistent with consumers preferences abstract united states government policy prohibits the sale of cheese made from unpasteurized milk aged less than 60 days despite contested science behind the policy we use experimental auctions for artisan cheese to estimate the value of pasteurization and age as food safety attributes which is the rationale for the policy we also look at consumers perception of the tradeoff between safety and quality a survey was conducted with participants at farmers markets including experimental auctions and sensory analysis of pasteurized and unpasteurized cheese and questions concerning attitudes about food safety there is no evidence of positive demand for pasteurization and there is no evidence of a tradeoff between safety and quality on average artisan cheese consumers make purchasing decisions based on taste not their attitude toward food safety the results of this study raise questions about the possible extension of a minimum aging period for cheese made from unpasteurized milk

two cheers and a qualm for behavioral environmental economics behavioral economics can gain more in roads into environmental economics if we better understand why exchange institutions fail more effectively reduce health risks and environmental conflicts encourage more coordination and cooperation design better incentive systems more accurately estimate economic measures of value and promote more protection at less cost behavioral economics deserves two cheers for advancing ideas of context dependence and social preferences which we illustrate with two examples of recent research

paired comparison estimates of willingness to accept versus contingent valuation estimates of willingness to pay estimating empirical measures of an individual s willingness to accept that are consistent with conventional economic theory has proven difficult the method of paired comparison offers a promising approach to estimate willingness to accept this method involves having individuals make binary choices between receiving a particular good or a sum of money willingness to accept can be inferred from the ranking of dollar amounts and the good of interest using the paired comparison approach mean median willingness to accept for a private good is estimated at 59 52 contingent valuation estimate of willingness to pay for the same good yields a mean median of 28 28 while these estimates are statistically different the ratio of willingness to accept to willingness to pay is less than in most previous studies and closer to ratios found in actual cash experiments

using laboratory experimental auctions in marketing research a case study of new packaging for fresh beef this paper illustrates the use of laboratory experimental auctions in a pretest market research program for new products we review the experimental auctions literature discuss the range of auction mechanisms available and present the advantages and disadvantages of using a particular mechanism for a laboratory pretest market we then present a step by step example of how a theoretically incentive compatible auction mechanism fifth price sealed bid was used in a laboratory pretest market for vacuum packaged beef based on the illustration we discuss the potential for using laboratory experimental auctions in pretest market research we present the limitations that may be encountered in such applications and outline research aimed at improving the behavioral properties of the technique

despairing over disparities explaining the difference between willingness to pay and willingness to accept this paper examines the three major explanations for the disparity between willingness to pay wtp and willingness to accept wta observed in contingent value surveys and laboratory experiments a belief that the results must be biased in some fashion hanemann s 1991 substitutes hypothesis and the loss aversion model proposed by tversky and kahneman 1991 starting from the assumption that individuals make utility maximizing choices we develop structural equations that yield parametric tests of the hypotheses within a single non experimental framework the approach is flexible enough to incorporate a variety of functional form and distributional assumptions and can be applied to either data from either open ended bids or dichotomous choice questions the usefulness of the approach is demonstrated using data from a survey that asked both wtp and wta questions the results provide weak support for loss aversion

contingent valuation theoretical advances and empirical tests since the noaa panel beyond a simple cost effectiveness role and for many policy issues where all the goods or impacts at issue are not readily priced in the market the relevance of economics depends to a large degree on the ability to use contingent valuation cv and other closely related stated preference approaches the government s use of cv as a tool to place a monetary value on damages from the exxon valdez oil spill brought forth strong industry objections to the use of cv in response the national oceanic and atmospheric administration noaa one of the trustee agencies in the exxon valdez case commissioned a blue ribbon panel chaired by kenneth arrow and robert solow to review the use of cv in natural resource damage assessment proceedings the panel s report arrow et al and transmittal letter to the noaa general counsel concluded cv studies can produce estimates reliable enough to be the starting point for a judicial or administrative determination of nat

causes and consequences of lexicographic choices in stated choice studies abstract stated choice sc methods and other choice experiments are now becoming increasingly popular for the valuation of environmental goods this paper shows that lexicographic choices lcs in an sc task or other types of choice experiments do not imply that the respondent has lexicographic preferences lcs may be a result of i study designs where differences between the alternatives are too great and ii simplification of the choice task a traditional approach that investigates motives for lexicographic choices mainly as a result of lexicographic preferences may therefore fail to reveal the whole motive range study designs that cause lcs whether such choices actually are based on non compensatory choices i e genuine lexicographic preferences or strategic behaviour or compensatory choices provide less information about preferences however providing they are not totally dominant such choices are not normally a serious modeling problem it is argued that simplification is a consequence of respondents differing abilities to choose such lcs contribute to the larger variances of sc data relative to less cognitively demanding valuation methods and might therefore have a significant impact on the implied valuation of non market goods if they are not handled in the analysis in data collection we should use survey designs that collect more signals and less noise and in data analysis we should use models that can separate signals from noise however there is obviously a limit to the amount of noise which can be separated from signals in a model and therefore how much noise such models can tolerate and still produce useful valuation estimates for the goods under consideration for further investigation of such limits a direct test procedure that can investigate whether each respondent has completed the task in a compensatory manner like the one presented in the current study is valuable

estimating the willingness to pay for reliable electricity supply a choice experiment study abstract this research examines households willingness to pay wtp for an improved electricity service households stated wtp is estimated using the choice experiment ce method the data used in the estimations come from 350 in person interviews conducted during the period 5 22 august 2008 in north cyprus compensating variation cv estimates for a zero outage scenario are calculated using the parameter estimates from the mixed logit ml model these are 6 65 ytl turkish lira per month 3 02 usd for summer and 25 83 ytl per month 11 74 usd for winter in order to avoid the cost of outages households are willing to incur a 3 6 and a 13 9 increase in their monthly electricity bill for summer and winter respectively the wtp per hour unserved is 0 28 ytl 0 13 usd for summer and 1 08 ytl 0 49 usd for winter a preliminary cost benefit analysis indicates that the annualized economic benefits are approximately 42 7 million ytl 19 4 million usd for the residential sector this would justify an investment in additional generation capacity of approximately 268 mw which is far more than that which is needed to eliminate the service reliability problem

do people anticipate loss aversion there is growing interest in the use of loss contracts that offer performance incentives as up front payments that employees can lose standard behavioral models predict a trade off in the use of loss contracts employees will work harder under loss contracts than under gain contracts but anticipating loss aversion they will prefer gain contracts to loss contracts in a series of experiments we test these predictions by measuring performance and preferences for payoff equivalent gain and loss contracts we find that people indeed work harder under loss than gain contracts as the theory predicts surprisingly rather than a preference for the gain contract we find that people actually prefer loss contracts in exploring mechanisms for our results we find suggestive evidence that people do anticipate loss aversion but select into loss contracts as a commitment device to improve performance using one bias loss aversion to address another dynamic inconsistency data as supplemental material are a

the effects of worker heterogeneity on duration dependence low back claims in workers compensation we estimate models of workers compensation claim duration for a sample of canadian workers with serious low back injuries the models extend recent duration research by allowing worker characteristics to affect duration dependence through the nonlocation parameters of the duration distribution we compare results for modified weibull models and piecewise constant hazard rate models of duration dependence the results show that workers responses to elapsed claim duration vary significantly with their characteristics and with economic incentives to return to work further allowing for heterogeneity in duration dependence effects can dramatically change the coefficient estimates of the variables that determine the location parameter of the duration distribution

winners losers and the nuclear waste dilemma this paper explores how property right assignment affects social efficiency when a public program has both public good and public bad components we show that when willingness to accept a public bad exceeds the willingness to pay the net benefit is unambiguously lower when the property right supports the status quo institutional structure thus kaldor hicks efficiency tests tend to favor public programs and mitigation over the status quo even when mitigation negatively affects another group to illustrate the result we develop social cost estimates for moving nuclear waste from current temporary storage facilities to a permanent central repository at yucca mountain nv usa for a representative city with a population of 226 195 the present value of the external cost of shipping waste is 1 42 billion when those living near temporary nuclear waste storage facilities are assigned the property right to health and safety that number swells to 5 95 billion when those living near the transport route are assigned the property right thus property right assignment affects the efficient level of nuclear waste and thus nuclear energy produced

arbitrary values good causes and premature verdicts abstract this paper offers an alternative interpretation of the conclusions kahneman and knetsch propose based on two contingent valuation cvm surveys the evaluation argues that while framing is important to cvm estimates the design implementation and empirical findings reported from these surveys do not support their judgments moreover with the exception of temporal embedding conventional economic descriptions of individual behavior can explain the response patterns that they suggest are at variance with standard value theory

moral dimensions of the wta wtp disparity an experimental examination abstract contrary to welfare economic theory empirical evidence suggests that the amount of money people are willing to accept wta to forego a commodity will generally exceed the amount of money they are willing to pay wtp to gain the commodity this paper undertakes an experimental examination of the wta wtp disparity using conventional and ecologically produced eggs the results of this experiment reveal that the difference between the mean wtp and wta for conventional eggs is negligible while the mean wta is more than 1 5 times higher than the mean wtp in the case of ecological eggs an explanation for this result is offered following the boyce et al boyce r b brown t c mcclelland g h peterson g l schulze w d 1992 an experimental examination of intrinsic values as a source of the wta wtp disparity am econ rev 82 1366 1373 notion that an asymmetrical assignment of moral responsibility may cause wta to exceed wtp by comparing the two studies a tentative conclusion is that the valuation disparity is likely to increase with a corresponding increase in the degree of assigned moral responsibility

i struggled with this money business respondents perspectives on contingent valuation abstract in the long running debates about the validity and legitimacy of contingent valuation cv very little research has engaged directly with respondents during or after the survey to explore what individuals willingness to pay wtp figure meant this paper presents the results of qualitative research with respondents to a cv survey carried out as part of the appraisal of a specific nature conservation policy in the uk the results show that respondents questioned the validity of their wtp figures through discussion of the difficulties they experienced in framing a meaningful reply significant difficulties included problems in contextualising what the scheme was and how much it might be worth in both monetary and non monetary terms an inability to work out a value for one scheme in isolation from others in other parts of the uk and feelings that values for nature were not commensurable with monetary valuation turning to the legitimacy of cv participants in the research challenged claims that cv is a democratic process for ensuring that public values are incorporated in policy decisions recognizing that hard economic choices have to be made in order to achieve nature conservation goals participants argued for a decision making institution where local people could contribute to environmental policy decisions through dialogue with scientists and policy makers in the final part of the paper this project is compared with three studies that have also used qualitative approaches with respondents during and or after a cv survey the paper concludes that more context specific qualitative research with respondents is needed to explore further the conclusion that cv may not be a good methodology for capturing complex cultural values for nature and landscape

value learning and the willingness to accept willingness to pay disparity the assumption that individual preferences are rational and consistent with standard economic theory is often appropriate but may be optimistic if consumers are uncertain about either their preferences or how the market operates both sources of uncertainty may present themselves in lab experiments exploring the well known disparity between individuals willingness to accept and willingness to pay this paper explores the role of value uncertainty in the observed disparity and finds that providing subjects with a value learning opportunity can reduce the value disparity to insignificance

preference anomalies preference elicitation and the discovered preference hypothesis there is wide ranging evidence much of it deriving from economics experiments of anomalies in behaviour that challenge standard preference theories this paper explores the implications of these anomalies for preference elicitation methods because methods that are used to inform public policy such as contingent valuation are based on standard preference theories their validity may be called into question by the anomaly data however on a new interpretation these anomalies do not contradict standard theory but are errors in stated preference that can be expected to disappear as people become more experienced in relevant decision environments we explore the evidence for this interpretation and what implications follow for preference elicitation methodology

anomalies and stated preference techniques a framework for a discussion of coping strategies this paper introduces a symposium on the issue of how stated preference sp research can best cope with anomalies i e systematic deviations from the predictions of standard economic theory in survey responses it proposes a framework for constructive debate recognising i the legitimate aspirations of sp research ii the relevance of evidence from sources other than best practice sp and iii the precautionary value of investigating strategies for coping with suspected anomalies even if questions about the robustness of anomalies have not been finally resolved five alternative coping strategies discussed in more detail in the symposium are briefly introduced

randall and stoll s bound in an inverse demand system abstract this letter extends randall and stoll s and hanemann s results into a complete inverse demand system it provides a theoretically consistent framework for welfare measurement under quantity restrictions and free adjustment of prices in an equilibrium it is found that randall and stoll s and hanemann s results should be modified to fit into the complete inverse demand system since they may give misleading interpretation of empirical studies in some cases

elicitation formats and the wta wtp gap a study of climate neutral foods we conduct a field valuation experiment where we vary the valuation method contingent valuation vs inferred valuation as well as the payment format dichotomous choice vs payment card willingness to accept and willingness to pay valuations are elicited in a within subjects design for foods with climate neutral labels we find a similar gap for valuations elicited with the contingent or the inferred valuation method however we also find that the gap can be muted by using a payment card elicitation format

cognitive ability and scale bias in the contingent valuation method this study investigates whether or not the scale bias found in contingent valuation cvm studies on mortality risk reductions is a result of cognitive constraints among respondents scale bias refers to insensitivity and non near proportionality of the respondents willingness to pay wtp to the size of the risk reduction two hundred swedish students participated in an experiment in which their cognitive ability was tested before they took part in a cvm study asking them about their wtp to reduce bus mortality risk the results imply that wtp answers from respondents with a higher cognitive ability are less flawed by scale bias

measuring impartial preference for biodiversity biodiversity undergoes unprecedented rates of erosion despite the important services it provides this is considered evidence that biodiversity is undervalued biodiversity valuation is accordingly a prominent issue in the literature economic valuations are however largely criticized numerous alternatives have been introduced most of them involve participatory protocols aimed at producing high quality results being time consuming and expensive it is difficult to implement and reproduce them at a large scale we produce an easily reproducible inexpensive survey methodology to measure impartial preference for biodiversity we implement it in switzerland through a mail based survey our result is that biodiversity should be ranked after retirement schemes and public transportation but before relations with foreign countries order and security and culture and leisure in the expanses of the state current expenses therefore substantially underestimate the value that swiss people grant to biodiversity our new method is a viable alternative to standard economic valuation given the impartiality achieved at least in the swiss political context our estimate can be used by decision makers to assess the legitimacy of conservation programs or to gauge public support at a philosophical level our measure is relevant for public policies because it captures the stances that people take when they participate in public decisions

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

moving beyond the patchwork a review of strategies to promote consistency for extended producer responsibility policy in the u s abstract product oriented environmental policy with an emphasis on extended producer responsibility epr frequently referred to as product stewardship in the u s is being applied in the united states for an increasingly broad scope of products including waste electronics and household hazardous wastes such as paint and mercury containing lamps however due to the lack of a unified federal response these efforts are driven by state level policies and regulations this state led approach is frequently characterized as resulting in a patchwork of disparate regulations historically two strategies are often suggested as offering a remedy for this situation 1 federal legislation and 2 model state legislation however another policy strategy has emerged in the u s that of an overall epr policy framework which creates a clear process for selecting and designating products and articulates the roles and responsibilities for the various players along the product chain this article provides an analysis of the experiences and prospects for each of the three strategies to serve as a policy vehicle for greater consistency of epr regulations throughout the u s in part motivated by global extended producer responsibility policy approaches particularly in the canadian provinces efforts are now underway to investigate a similar comprehensive regulatory approach to be implemented by individual states in the u s the article examines the framework model that is envisioned in the u s and outlines the recommend components of this policy concept finally the article provides a comparison with other jurisdictions most notably british columbia which has implemented a broad extended producer responsibility policy

limits to cba in uk and european environmental policy retrospects and future prospects this paper reviews the contemporary debate and the now long standing role of cba in uk and european environmental policy appraisal epa and looks forward to possible future applications the position taken is that despite its limitations cba still has an important part to play in epa however with the increasingly contested nature of environmental and related public policies and outcomes its role will become less prescriptive and its findings more constrained by social justice and ethical imperatives future cba is more likely to continue to flourish as a component in a wider policy analysis and decision support system whatever decision support system is eventually adopted its value will be judged on how well it aids real policymakers operating iteratively in the non linear real world political economy

how the brazilian government can use public policies to induce recycling and still save money abstract public policies can leverage the recycling of materials however there is no clear guidance on how to use such policies and still spare public funds to fill this gap a multiple case study was undertaken in brazil eleven companies that can produce new products using the waste generated by their customers were investigated the findings contribute by suggesting how governments can economically use taxes sanctions incentives and other public instruments to induce recycling tax exemptions are not required when the waste recycled reduces the manufacturer s costs or generates revenue for customers who produce it and or for the scrap dealers who collect it sanctions or penalties imposed on the manufacturer s customers can increase the recycling efforts of such manufacturers when the recycling is technically feasible but not economically attractive sanctions are ineffective when wastes have a good market value or are widespread over millions of generation points for such cases the public policies should focus on community awareness campaigns and attention on waste pickers incentives for the technological development can be provided to wastes that present a good market value but do not have an economical recycling technology available granting resources to universities and technological institutes will help spread the solution to sme companies by better understanding how to apply public instruments the governments will be able to save funds on tax exemptions better define sanctions focus its community awareness campaigns focus its waste pickers support and better allocate funds to support the development of new recycling technologies