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Non-price equilibria for non-marketed goods

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  • Phaneuf, Daniel J.
  • Carbone, Jared C.
  • Herriges, Joseph A.

Abstract

As part of the Resources for the Future Frontiers of Environmental Economics collection of papers, we consider the problem of general equilibrium feedback effects in non-price space as they relate to non-market valuation. Our overall objective is to examine the extent to which non-price equilibria arising from both simple and complex sorting behavior can be empirically modeled and the resulting differences in partial and general equilibrium welfare measures quantified. After motivating the problem, in general, we consider the specific context of congestion in recreation demand applications, which we classify as the outcome of a simple sorting equilibrium. Using both econometric and computable general equilibrium (CGE) models, we examine the conceptual and computational challenges associated with this class of problems and present findings on promising solution avenues. We demonstrate the relevance of accounting for congestion effects in recreation demand with an application to lake visits in Iowa. Our econometric and CGE results confirm that, for some plausible counterfactual scenarios, substantial differences exist between partial and general equilibrium welfare estimates. We conclude the paper by describing tasks that are needed to move forward research in this area.

Suggested Citation

  • Phaneuf, Daniel J. & Carbone, Jared C. & Herriges, Joseph A., 2009. "Non-price equilibria for non-marketed goods," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 45-64, January.
  • Handle: RePEc:eee:jeeman:v:57:y:2009:i:1:p:45-64
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    Cited by:

    1. Michael O’Hara, 2013. "Empirical identification of perceived congestion," Empirical Economics, Springer, vol. 45(3), pages 1167-1187, December.
    2. Llop Llop, Maria, 2016. "A second-best analysis of alternative instruments for the preservation of natural resources?," Working Papers 2072/261533, Universitat Rovira i Virgili, Department of Economics.
    3. Xenarios, Stefanos & Amarasinghe, Upali & Sharma, Bharat R., 2011. "Valuating agricultural water use and ecological services in agrarian economies: evidences from eastern India," IWMI Research Reports H043778, International Water Management Institute.
    4. Wiktor L. Adamowicz & Klaus Glenk & Jürgen Meyerhoff, 2014. "Choice modelling research in environmental and resource economics," Chapters, in: Stephane Hess & Andrew Daly (ed.),Handbook of Choice Modelling, chapter 27, pages 661-674, Edward Elgar Publishing.
    5. Stafford, Tess M., 2018. "Accounting for outside options in discrete choice models: An application to commercial fishing effort," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 159-179.
    6. Angel Bujosa & Antoni Riera & Robert Hicks & Kenneth McConnell, 2015. "Densities Rather than Shares: Improving the Measurement of Congestion in Recreation Demand Models," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(2), pages 127-140, June.
    7. Diana R Lane & Richard C Ready & Robert W Buddemeier & Jeremy A Martinich & Kate Cardamone Shouse & Cameron W Wobus, 2013. "Quantifying and Valuing Potential Climate Change Impacts on Coral Reefs in the United States: Comparison of Two Scenarios," PLOS ONE, Public Library of Science, vol. 8(12), pages 1-13, December.
    8. von Haefen, Roger H., 2010. "Incomplete Demand Systems, Corner Solutions, and Welfare Measurement," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(1), pages 1-15, February.
    9. Carbone, Jared C. & Kerry Smith, V., 2013. "Valuing nature in a general equilibrium," Journal of Environmental Economics and Management, Elsevier, vol. 66(1), pages 72-89.
    10. Kolstoe, Sonja & Cameron, Trudy Ann, 2017. "The Non-market Value of Birding Sites and the Marginal Value of Additional Species: Biodiversity in a Random Utility Model of Site Choice by eBird Members," Ecological Economics, Elsevier, vol. 137(C), pages 1-12.
    11. Melstrom, Richard & Lupi, Frank, 2012. "Using a Control Function to Resolve the Travel Cost Endogeneity Problem in Recreation Demand Models," MPRA Paper 48036, University Library of Munich, Germany, revised May 2013.

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    More about this item

    Keywords

    Non-market valuation General equilibrium Recreation demand CGE modeling Quality-differentiated demand;

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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