Advanced Search
MyIDEAS: Login

Public-good valuation and intra-family allocation

Contents:

Author Info

  • Jon Strand

    ()

Abstract

I derive the value of marginal changes in a public good for two-person households, measured alternatively by household member i’s willingness to pay (WTP) for the good on behalf of the household, WTPi(H), or by the sum of individual WTP values across family members, WTP(C). Households are assumed to allocate their resources in efficient Nash bargains over one private good for each member, and one common household good. WTPi(H) is then found by trading off the public good against the household good, and WTP(C) by trading the public good off against the private goods. I show that WTPi(H) is on average a correct representation of WTP(C), but is higher (lower) than this average when member 1 has a higher (lower) marginal public good value than member 2. Pure and paternalistic altruism (the latter attached to consumption of the public good) both move each member’s WTP on behalf of the household closer to the true aggregate WTP, while only the latter raises aggregate WTP. The results have important implications for interpretation of results from contingent valuation surveys of public-goods. In a large sample, individuals tend to represent households correctly on average when asked about household WTP, and counting all members’ WTP answers on behalf of the household will lead to double counting.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1007/s10640-007-9098-3
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 38 (2007)
Issue (Month): 4 (December)
Pages: 527-543

as in new window
Handle: RePEc:kap:enreec:v:38:y:2007:i:4:p:527-543

Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Public goods; Willingness to pay; Contingent valuation; Intrafamily allocation; Nash bargaining; H41; D13; Q26; D64;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
  2. John Quiggin, 1998. "Individual and Household Willingness to Pay for Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 58-63.
  3. Saku Aura, . "Does the balance of power within a family matter? The case of the Retirement Equity Act," Working Papers 202, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
  5. Martin Browning & Pierre-Andre Chiappori, 1994. "Efficient Intra-Household Allocations: a General Characterization and Empirical Tests," Department of Economics Working Papers 1994-02, McMaster University.
  6. Chen, Zhiqi & Woolley, Frances, 2001. "A Cournot-Nash Model of Family Decision Making," Economic Journal, Royal Economic Society, vol. 111(474), pages 722-48, October.
  7. Anderson, K.S. & Baland, J-M., 2000. "The Economics of Roscas and Intra-Household Resource Allocation," Discussion Paper 2000-83, Tilburg University, Center for Economic Research.
  8. Shelly Lundberg & Robert Pollak, 2003. "Efficiency in Marriage," Review of Economics of the Household, Springer, vol. 1(3), pages 153-167, September.
  9. Bartik, Timothy J., 1988. "Evaluating the benefits of non-marginal reductions in pollution using information on defensive expenditures," Journal of Environmental Economics and Management, Elsevier, vol. 15(1), pages 111-127, March.
  10. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier.
  11. Jones-Lee, M W, 1991. " Altruism and the Value of Other People's Safety," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 213-19, April.
  12. Ted Bergstrom, 1995. "A Survey of Theories of the Family," Papers _027, University of Michigan, Department of Economics.
  13. Quiggin, John, 1992. "Risk, self-protection and ex ante economic value--some positive results," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 40-53, July.
  14. Johansson, Per-Olov, 1994. "Altruism and the value of statistical life: Empirical implications," Journal of Health Economics, Elsevier, vol. 13(1), pages 111-118, March.
  15. Jones-Lee, M W, 1992. "Paternalistic Altruism and the Value of Statistical Life," Economic Journal, Royal Economic Society, vol. 102(410), pages 80-90, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Delaney, Liam & O'Toole, Francis, 2008. "Individual, household and gender preferences for social transfers," Journal of Economic Psychology, Elsevier, vol. 29(3), pages 348-359, June.
  2. Liam Delaney & Francis O’Toole, 2006. "Willingness to pay: individual or household?," Journal of Cultural Economics, Springer, vol. 30(4), pages 305-309, December.
  3. Strand, Jon, 2009. "Individual and household value of mortality reductions with intrahousehold bargaining," HERO On line Working Paper Series 2004:2, Oslo University, Health Economics Research Programme.
  4. Fredrik Carlsson & Haoran He & Peter Martinsson & Ping Qin & Matthias Sutter, 2010. "Household Decision Making in Rural China: Using Experiments to Estimate the Influences of Spouses," Working Papers 2010-20, Faculty of Economics and Statistics, University of Innsbruck.
  5. Henrik Lindhjem & Ståle Navrud, 2009. "Asking for Individual or Household Willingness to Pay for Environmental Goods?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(1), pages 11-29, May.
  6. Eline Aas, 2009. "Pecuniary compensation increases participation in screening for colorectal cancer," Health Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 337-354.
  7. Tuan, Tran Hu & Lindhjem, Henrik, 2008. "Meta-analysis of nature conservation values in Asia & Oceania: Data heterogeneity and benefit transfer issues," MPRA Paper 11470, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:38:y:2007:i:4:p:527-543

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.