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The relationship between individual and household measures of WTP and WTA

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  • Udo Ebert

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Abstract

The article defines measures of individual and household willingness to pay (and to accept) in a general and flexible framework. It completely clarifies the relationship between the household measures and the sum of the individual welfare measures (the aggregate measures) which are in general different. The aggregate measures form only an upper bound for the corresponding household measures. The bounds (based on the information about individual measures) can be tightened by introducing additional assumptions about the decision process within the household. The results derived prove helpful for the theoretical analysis of household behavior, for the evaluation of nonmarket goods in environmental and public economics and for contingent valuation. Copyright Springer-Verlag 2013

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Bibliographic Info

Article provided by Springer in its journal Social Choice and Welfare.

Volume (Year): 40 (2013)
Issue (Month): 2 (February)
Pages: 367-390

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Handle: RePEc:spr:sochwe:v:40:y:2013:i:2:p:367-390

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Cited by:
  1. Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2013. "Household Decision-Making and Valuation of Environmental Health Risks to Parents and their Children," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 201306, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Dec 2013.

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