IDEAS home Printed from https://ideas.repec.org/p/isu/genres/1309.html
   My bibliography  Save this paper

Nonparametric Bounds on Welfare Measures: A New Tool for Nonmarket Valuation

Author

Listed:
  • Kling, Catherine L.

Abstract

In this research, we adapt and extend previous work on nonparametric bounds for welfare measures. We present a procedure for estimating upper and lower bounds on each consumer's individual willingness to pay for an environmental improvement. The exciting aspect of this work is that these bounds are derived using only observed quantities and prices of visits to a recreation area without resorting to any parametric assumptions on demand or utility. In Monte Carlo simulations, we find that the bounds have the potential to be narrow enough for policy purposes. (c) 2000 Academic Press

Suggested Citation

  • Kling, Catherine L., 2000. "Nonparametric Bounds on Welfare Measures: A New Tool for Nonmarket Valuation," Staff General Research Papers Archive 1309, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:1309
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joseph A. Herriges & Catherine L. Kling, 1997. "The Performance of Nested Logit Models When Welfare Estimation Is the Goal," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 792-802.
    2. Varian, Hal R, 1982. "The Nonparametric Approach to Demand Analysis," Econometrica, Econometric Society, vol. 50(4), pages 945-973, July.
    3. Gallant, A. Ronald, 1981. "On the bias in flexible functional forms and an essentially unbiased form : The fourier flexible form," Journal of Econometrics, Elsevier, vol. 15(2), pages 211-245, February.
    4. Kling, Catherine L., 1989. "The Importance Of Functional Form In The Estimation Of Welfare," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-7, July.
    5. Varian, Hal R., 1983. "Nonparametric Tests of Models of Investor Behavior," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(3), pages 269-278, September.
    6. Kling, Catherine L. & Herriges, Joseph A., 1997. "Model Performance of Nested Logit Models when Welfare Estimation is the Goal, The," Staff General Research Papers Archive 12331, Iowa State University, Department of Economics.
    7. Michael D. Creel, 1997. "Welfare Estimation Using The Fourier Form: Simulation Evidence For The Recreation Demand Case," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 88-94, February.
    8. Rod F. Ziemer & Wesley N. Musser & R. Carter Hill, 1980. "Recreation Demand Equations: Functional Form and Consumer Surplus," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(1), pages 136-141.
    9. Edward R. Morey & Robert D. Rowe & Michael Watson, 1993. "A Repeated Nested-Logit Model of Atlantic Salmon Fishing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 578-592.
    10. Catherine L. Kling & Cynthia J. Thomson, 1996. "The Implications of Model Specification for Welfare Estimation in Nested Logit Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 103-114.
    11. Joseph A. Herriges & Catherine L. Kling (ed.), 1999. "Valuing Recreation and the Environment," Books, Edward Elgar Publishing, number 1315.
    12. Cropper, Maureen L & Deck, Leland B & McConnell, Kenneth E, 1988. "On the Choice of Functional Form for Hedonic Price Functions," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 668-675, November.
    13. Gallant, A. Ronald, 1982. "Unbiased determination of production technologies," Journal of Econometrics, Elsevier, vol. 20(2), pages 285-323, November.
    14. Peter C. Boxall & Wiktor L. Adamowicz & Theodore Tomasi, 1996. "A Nonparametric Test of the Traditional Travel Cost Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(2), pages 183-193, July.
    15. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    16. Chalfant, James A & Alston, Julian M, 1988. "Accounting for Changes in Tastes," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 391-410, April.
    17. Kling, Catherine L., 1997. "Evaluation of the Gains from Combining Travel Cost and Contingent Valuation Data to Value Nonmarket Goods (An)," Staff General Research Papers Archive 1598, Iowa State University, Department of Economics.
    18. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-597, May.
    19. Varian, Hal R., 1985. "Non-parametric analysis of optimizing behavior with measurement error," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 445-458.
    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


    Cited by:

    1. Silvia Ferrini & Carlo Fezzi, 2012. "Generalized Additive Models for Nonmarket Valuation via Revealed or Stated Preference Methods," Land Economics, University of Wisconsin Press, vol. 88(4), pages 782-802.
    2. Crooker, John R., 2007. "Nonparametric Bounds on Welfare with Measurement Error in Prices: Techniques for Non-Market Resource Valuation," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 239-252, October.
    3. Laura Blow & Richard Blundell, 2018. "A Nonparametric Revealed Preference Approach to Measuring the Value of Environmental Quality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(3), pages 503-527, March.
    4. Kjartan Sælensminde, 2001. "Inconsistent choices in Stated Choice data;Use of the logit scaling approach to handle resulting variance increases," Transportation, Springer, vol. 28(3), pages 269-296, August.
    5. Kjartan Sælensminde, 2002. "The Impact of Choice Inconsistencies in Stated Choice Studies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(4), pages 403-420, December.
    6. Star, Megan & Rolfe, John & Brown, Julia, 2020. "From farm to fork: Is food tourism a sustainable form of economic development?," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 325-334.
    7. Prabha Prayaga & John Rolfe & Jack Sinden, 2006. "A Travel Cost Analysis of the Value of Special Events: Gemfest in Central Queensland," Tourism Economics, , vol. 12(3), pages 403-420, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Crooker & Joseph Herriges, 2004. "Parametric and Semi-Nonparametric Estimation of Willingness-to-Pay in the Dichotomous Choice Contingent Valuation Framework," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(4), pages 451-480, April.
    2. Catalina M. Torres Figuerola & Nick Hanley & Sergio Colombo, 2011. "Incorrectly accounting for taste heterogeneity in choice experiments: Does it really matter for welfare measurement?," CRE Working Papers (Documents de treball del CRE) 2011/1, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
    3. Torres, Cati & Hanley, Nick & Riera, Antoni, 2011. "How wrong can you be? Implications of incorrect utility function specification for welfare measurement in choice experiments," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 111-121, July.
    4. Schwabe, Kurt A. & Schuhmann, Peter W., 1999. "The Value Of Increasing The Length Of Deer Season In Ohio," 1999 Annual meeting, August 8-11, Nashville, TN 21574, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Catalina M. Torres Figuerola & Nick Hanley & Antoni Riera Font, 2008. "The implications of incorrect utility function specification for welfare measurement in choice experiments," CRE Working Papers (Documents de treball del CRE) 2008/6, Centre de Recerca Econòmica (UIB ·"Sa Nostra").
    6. repec:sss:wpaper:201407 is not listed on IDEAS
    7. Catalina M. Torres & Sergio Colombo & Nick Hanley, 2014. "Incorrectly accounting for preference heterogeneity in choice experiments: what are the implications for welfare measurement?," DEA Working Papers 65, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    8. Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761, Elsevier.
    9. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    10. Tsur, Yacov, 1990. "Testing The Significance Of Deviations From Rational Behavior," Staff Papers 13267, University of Minnesota, Department of Applied Economics.
    11. Yongjie Ji & Joseph A. Herriges & Catherine L. Kling, 2016. "Modeling Recreation Demand When the Access Point Is Unknown," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 860-880.
    12. Kesavan, Thulasiram, 1988. "Monte Carlo experiments of market demand theory," ISU General Staff Papers 198801010800009854, Iowa State University, Department of Economics.
    13. Kurt Schwabe & Peter Schuhmann & Roy Boyd & Khosrow Doroodian, 2001. "The Value of Changes in Deer Season Length: An Application of the Nested Multinomial Logit Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 131-147, June.
    14. Fleissig, Adrian R. & Whitney, Gerald A., 2008. "A nonparametric test of weak separability and consumer preferences," Journal of Econometrics, Elsevier, vol. 147(2), pages 275-281, December.
    15. W. Shaw & Michael Ozog, 1999. "Modeling Overnight Recreation Trip Choice: Application of a Repeated Nested Multinomial Logit Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(4), pages 397-414, June.
    16. Mike G. Tsionas & Valentin Zelenyuk, 2022. "Testing for Optimization Behavior in Production when Data is with Measurement Errors: A Bayesian Approach," CEPA Working Papers Series WP012022, School of Economics, University of Queensland, Australia.
    17. Jin, Hyun Joung & Sun, Changyou & Koo, Won W., 2003. "The Effect Of Food-Safety Related Information On Consumer Preference: The Case Of The Bse Outbreak In Japan," Agribusiness & Applied Economics Report 23636, North Dakota State University, Department of Agribusiness and Applied Economics.
    18. Sundström, David, 2016. "On Specification and Inference in the Econometrics of Public Procurement," Umeå Economic Studies 931, Umeå University, Department of Economics.
    19. Crooker, John R., 2007. "Nonparametric Bounds on Welfare with Measurement Error in Prices: Techniques for Non-Market Resource Valuation," Agricultural and Resource Economics Review, Cambridge University Press, vol. 36(2), pages 239-252, October.
    20. Thomas Demuynck & John Rehbeck, 2023. "Computing revealed preference goodness-of-fit measures with integer programming," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 76(4), pages 1175-1195, November.
    21. F Alpizar & F Carlsson & P Martinsson, 2003. "Using Choice Experiments for Non-Market Valuation," Economic Issues Journal Articles, Economic Issues, vol. 8(1), pages 83-110, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genres:1309. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.