IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v36y2008i3p334-358.html
   My bibliography  Save this article

Accurate Valuation in the Absence of Markets

Author

Listed:
  • Florenz Plassmann

    (State University of New York at Binghamton)

  • T. Nicolaus Tideman

    (Virginia Polytechnic Institute and State University, Blacksburg)

Abstract

Incomplete markets do not provide accurate information about people's subjective valuations of goods. Knowledge of these subjective valuations is often important, however, for example when compensation payments for damaged or destroyed property are required. We argue that in such cases, an attractive measure of the value of a good is the reservation price of the owner, who is generally the person who values it most highly. If a property is sufficiently unique so that there is no market price that can be used as an approximation, then the only way to learn this subjective reservation price is to have the owner self-assess his property. We describe a mechanism that provides an incentive for the owner to self-assess his property honestly without requiring that the property's value be objectively observable.

Suggested Citation

  • Florenz Plassmann & T. Nicolaus Tideman, 2008. "Accurate Valuation in the Absence of Markets," Public Finance Review, , vol. 36(3), pages 334-358, May.
  • Handle: RePEc:sae:pubfin:v:36:y:2008:i:3:p:334-358
    as

    Download full text from publisher

    File URL: http://pfr.sagepub.com/content/36/3/334.abstract
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thomas Miceli, 2011. "Free riders, holdouts, and public use: a tale of two externalities," Public Choice, Springer, vol. 148(1), pages 105-117, July.
    2. Thomas J. Miceli, 2014. "The Cost of Kelo: Are Property Taxes a Form of Public Use?," Working papers 2014-35, University of Connecticut, Department of Economics.

    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:sae:pubfin:v:36:y:2008:i:3:p:334-358. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.