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Compensating for Public Harms: Why Public Goods Are Preferred to Money

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  • Carol Mansfield
  • George L. Van Houtven
  • Joel Huber

Abstract

This paper provides evidence that public goods represent a more acceptable response to public harms than monetary compensation. We demonstrate a preference for public goods over monetary compensation, in part because receipt of public goods may limit the sense of guilt or bribery from accepting compensation for the injury. More surprising, this preference for public goods over money in the presence of a harm remains in a free-market choice where guilt is not an issue. It appears that public goods psychologically mitigate or balance public harms in a way that makes them more valuable in the presence of public harms.

Suggested Citation

  • Carol Mansfield & George L. Van Houtven & Joel Huber, 2002. "Compensating for Public Harms: Why Public Goods Are Preferred to Money," Land Economics, University of Wisconsin Press, vol. 78(3), pages 368-389.
    • Handle: RePEc:uwp:landec:v:78:y:2002:i:3:p:368-389
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    3. Kermagoret, Charlène & Levrel, Harold & Carlier, Antoine & Dachary-Bernard, Jeanne, 2016. "Individual preferences regarding environmental offset and welfare compensation: a choice experiment application to an offshore wind farm project," Ecological Economics, Elsevier, vol. 129(C), pages 230-240.
    4. Jonathan Aldred, 2006. "Incommensurability and Monetary Valuation," Land Economics, University of Wisconsin Press, vol. 82(2), pages 141-161.
    5. Contu, Davide & Strazzera, Elisabetta, 2022. "Testing for saliency-led choice behavior in discrete choice modeling: An application in the context of preferences towards nuclear energy in Italy," Journal of choice modelling, Elsevier, vol. 44(C).
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    7. Contu, Davide & Strazzera, Elisabetta & Mourato, Susana, 2016. "Modeling individual preferences for energy sources: The case of IV generation nuclear energy in Italy," Ecological Economics, Elsevier, vol. 127(C), pages 37-58.
    8. van den Berg, Kimo & Tempels, Barbara, 2022. "The role of community benefits in community acceptance of multifunctional solar farms in the Netherlands," Land Use Policy, Elsevier, vol. 122(C).
    9. Virna Vaneza Gutiérrez & Luis Abdón Cifuentes & Nicolás C. Bronfman, 2015. "Factors Influencing Compensation Demanded for Environmental Impacts Generated by Different Economic Activities," Sustainability, MDPI, vol. 7(7), pages 1-20, July.
    10. Fumihiro Yamane & Hideaki Ohgaki & Kota Asano, 2011. "Nuclear Power‐Related Facilities and Neighboring Land Price: A Case Study on the Mutsu‐Ogawara Region, Japan," Risk Analysis, John Wiley & Sons, vol. 31(12), pages 1969-1994, December.
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    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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