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Estimating The General Equilibrium Benefits Of Large Changes In Spatially Delineated Public Goods

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  • Holger Sieg
  • V. Kerry Smith
  • H. Spencer Banzhaf
  • Randy Walsh

Abstract

The purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality. We estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities. Welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods. The framework is used to analyze willingness to pay for reductions in ozone concentrations in Southern California between 1990 and 1995. Copyright 2004 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 45 (2004)
Issue (Month): 4 (November)
Pages: 1047-1077

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Handle: RePEc:ier:iecrev:v:45:y:2004:i:4:p:1047-1077

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