Environmental Valuation with Imperfect Information The Case of the Random Utility Model
AbstractThis paper considers welfare analysis with therandom utility model (RUM) when perceptions ofenvironmental quality differ from objectivemeasures of environmental quality. Environmental quality is assumed to be anexperience good, so that while perceptions ofquality determine choices, ex postutility is determined by objective quality. Given this assumption, I derive a measure ofthe welfare impact of changes in environmentalquality, and I show how this new welfaremeasure differs from the traditional welfaremeasure developed by Hanemann (1982). This newwelfare measure provides an approach tomeasuring the value of information aboutenvironmental quality within the framework ofthe random utility model. Copyright Kluwer Academic Publishers 2002
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 23 (2002)
Issue (Month): 3 (November)
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Web page: http://www.springerlink.com/link.asp?id=100263
discrete choice; information; logit; perception; random utility model; welfare analysis;
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