What's the use? welfare estimates from revealed preference models when weak complementarity does not hold
The focal point of the revealed preference (RP) valuation literature, including recreation demand and random utility maximization (RUM) models, has been on eliciting the "use" value associated with environmental amenities, i.e., that portion of value associated with direct use of a resource. MÃ¤ler's (1974) concept of weak complementarity is typically invoked to justify this focus. Indeed, weak complementarity explicitly or implicitly underlies most of the RP literature. This paper considers the measurement of welfare in RP models when weak complementarity does not hold. In particular, the Kuhn-Tucker (KT) framework (e.g., Phaneuf et al. 2000) does not impose weak complementarity a priori, raising the possibility of rejecting weak complementarity in estimation and the question as to what is the proper welfare measure to report. Although existence value cannot be measured, the authors argue that in some circumstances there are components of total value outside of use value which RP methods may help to illuminate.
(This abstract was borrowed from another version of this item.)
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.:
- Phaneuf, Daniel J. & Kling, Catherine L. & Herriges, Joseph A., 2000.
"Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand,"
Staff General Research Papers
1355, Iowa State University, Department of Economics.
- Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 83-92, February.
- Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 1998. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," Center for Agricultural and Rural Development (CARD) Publications 99-wp207, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Alan Randall, 1994. "Difficulty with the Travel Cost Method," Land Economics, University of Wisconsin Press, vol. 70(1), pages 88-96.
- Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-76, September.
- Herriges, Joseph A. & Kling, Catherine L., 2003. "Recreation Demand Models," Staff General Research Papers 10211, Iowa State University, Department of Economics.
- 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.
- Carson, Richard T. & Hanemann, W. Michael, 2006.
Handbook of Environmental Economics,
in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936
- Larson, Douglas M., 1991. "Recovering weakly complementary preferences," Journal of Environmental Economics and Management, Elsevier, vol. 21(2), pages 97-108, September.
- Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:47:y:2004:i:1:p:55-70. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.