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Can Understanding Spatial Equilibria Enhance Benefit Transfers for Environmental Policy Evaluation?

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  • Nicolai V. Kuminoff

    (Arizona State University
    National Bureau of Economic Research)

Abstract

A conceptual model of consumer sorting in markets for housing, labor and health care is outlined and used to make three points about how benefit transfers are used for environmental policy evaluation. First, the standard approach to assessing benefits of air quality improvements by transferring the value of a statistical life from labor market studies embeds several untested (but testable) assumptions. Second, if the cost of an environmental policy exceeds its capitalized effect on housing prices, then the capitalization effect is an insufficient statistic for determining whether benefits exceed costs. Third, there are several ways in which equilibrium sorting models may be usefully extended to assess distributional welfare effects of environmental policies.

Suggested Citation

  • Nicolai V. Kuminoff, 2018. "Can Understanding Spatial Equilibria Enhance Benefit Transfers for Environmental Policy Evaluation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(3), pages 591-608, March.
    • Handle: RePEc:kap:enreec:v:69:y:2018:i:3:d:10.1007_s10640-017-0214-8
    DOI: 10.1007/s10640-017-0214-8
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    Cited by:

    1. Robert J. Johnston & Kevin J. Boyle & Maria L. Loureiro & Ståle Navrud & John Rolfe, 2021. "Guidance to Enhance the Validity and Credibility of Environmental Benefit Transfers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(3), pages 575-624, July.
    2. Jasper N. Meya, 2018. "Environmental Inequality and Economic Valuation," Working Papers V-416-18, University of Oldenburg, Department of Economics, revised Dec 2018.
    3. Jasper N. Meya, 2020. "Environmental Inequality and Economic Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 235-270, July.

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