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Consumer Surplus with Apology: A Historical Perspective on Nonmarket Valuation and Recreation Demand

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  • H. Spencer Banzhaf

    () (Andrew Young School of Policy Studies, Department of Economics, Georgia State University, Atlanta, Georgia 30302
    National Bureau of Economic Research, Cambridge, Massachusetts 02138)

Abstract

When economists first turned to applied benefit-cost analysis in the 1930s and 1940s, prices were the only widely accepted measure of benefits. Perhaps surprisingly, economists did not consider measures like consumer surplus, which seemed quite foreign. Consequently, when they turned to nonmarket valuation for goods like outdoor recreation, their constructed demand curves seemed less informative than a simple equilibrium price. As they struggled with how to make use of such information, natural resource economists set important precedents for the larger profession in coming to consumer surplus as a new measure of benefits. By creating important precedents and learning through practice, they shaped the discipline as much as they were shaped by received theory. At the same time, by coming to these notions in the context of political debates, they were also shaped by the norms of the state.

Suggested Citation

  • H. Spencer Banzhaf, 2010. "Consumer Surplus with Apology: A Historical Perspective on Nonmarket Valuation and Recreation Demand," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 183-207, October.
  • Handle: RePEc:anr:reseco:v:2:y:2010:p:183-207
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.resource.012809.103936
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    Citations

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    Cited by:

    1. Marit Kragt, 2013. "The Effects of Changing Cost Vectors on Choices and Scale Heterogeneity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(2), pages 201-221, February.
    2. Gohar, Abdelaziz A. & Cashman, Adrian, 2016. "A methodology to assess the impact of climate variability and change on water resources, food security and economic welfare," Agricultural Systems, Elsevier, vol. 147(C), pages 51-64.
    3. Ronald C. Griffin, 2012. "The Origins and Ideals of Water Resource Economics in the United States," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 353-377, August.
    4. H. Spencer Banzhaf, 2014. "Retrospectives: The Cold-War Origins of the Value of Statistical Life," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 213-226, Fall.

    More about this item

    Keywords

    benefit-cost analysis; history of economic thought; outdoor recreation; welfare economics;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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