Private Options to Use Public Goods: Exploiting Revealed Preferences to Estimate Environmental Benefits
AbstractWe develop and apply a new method for estimating the economic benefits of an environmental amenity. The method fits within the household production framework (Becker 1965), and is based upon the notion of estimating the derived demand for a privately traded option to utilize a freely-available public good. In particular, the demand for state fishing licenses is used to infer the benefits of recreational fishing. Using panel data on state fishing license sales and prices for the continental United States over a fifteen-year period, combined with data on substitute prices and demographic variables, a license demand function is estimated with instrumental variable procedures to allow for the potential endogeneity of administered prices. The econometric results lead to estimates of the benefits of a fishing license, and subsequently to the expected benefits of a recreational fishing day. In contrast with previous studies, which have utilized travel cost or hypothetical market methods, our approach provides estimates that are directly comparable across geographic areas. Further, our results suggest that the benefits of recreational fishing days are generally less than previously estimated.
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Bibliographic InfoPaper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp03-013.
Date of creation: Mar 2003
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Other versions of this item:
- Stavins, Robert & Wagner, Alexander & Snyder, Lori, 2003. "Private Options to Use Public Goods: Exploiting Revealed Preferences to Estimate Environmental Benefits," Discussion Papers dp-03-49, Resources For the Future.
- Lori D. Snyder & Robert N. Stavins & Alexander F. Wagner, 2003. "Private Options to Use Public Goods Exploiting Revealed Preferences to Estimate Environmental Benefits," Working Papers 2003.49, Fondazione Eni Enrico Mattei.
- Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
- Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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.:
- W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
- Richard T. Carson & Nicholas E. Flores & Kerry M. Martin & Jennifer L. Wright, 1996.
"Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods,"
University of Wisconsin Press, vol. 72(1), pages 80-99.
- Carson, Richard T. & Flores, Nicholas E. & Martin, Kerry M. & Wright, Jennifer L., 1995. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148793, Australian Agricultural and Resource Economics Society.
- Douglas M. Larson, 1993. "Joint Recreation Choices and Implied Values of Time," Land Economics, University of Wisconsin Press, vol. 69(3), pages 270-286.
- Paul R. Portney, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall.
- Bockstael, Nancy E & McConnell, Kenneth E, 1983. "Welfare Measurement in the Household Production Framework," American Economic Review, American Economic Association, vol. 73(4), pages 806-14, September.
- Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
- Stavins, Robert, 2004.
dp-04-54, Resources For the Future.
- Stavins, Robert, 2004. "Environmental Economics," Working Paper Series rwp04-051, Harvard University, John F. Kennedy School of Government.
- Stavins, Robert N., 2004. "Environmental Economics," Working paper 276, Regulation2point0.
- Robert N. Stavins, 2007. "Environmental Economics," NBER Working Papers 13574, National Bureau of Economic Research, Inc.
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