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The relationship between individual and household measures of WTP and WTA

  • Udo Ebert


The article defines measures of individual and household willingness to pay (and to accept) in a general and flexible framework. It completely clarifies the relationship between the household measures and the sum of the individual welfare measures (the aggregate measures) which are in general different. The aggregate measures form only an upper bound for the corresponding household measures. The bounds (based on the information about individual measures) can be tightened by introducing additional assumptions about the decision process within the household. The results derived prove helpful for the theoretical analysis of household behavior, for the evaluation of nonmarket goods in environmental and public economics and for contingent valuation. Copyright Springer-Verlag 2013

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Article provided by Springer & The Society for Social Choice and Welfare in its journal Social Choice and Welfare.

Volume (Year): 40 (2013)
Issue (Month): 2 (February)
Pages: 367-390

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Handle: RePEc:spr:sochwe:v:40:y:2013:i:2:p:367-390
DOI: 10.1007/s00355-011-0607-5
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  6. Strand, Jon, 2009. "Public-good valuation and intrafamily allocation," HERO On line Working Paper Series 2003:20, Oslo University, Health Economics Research Programme.
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  8. Ebert, Udo, 2010. "Household willingness to pay and income pooling: A comment," Economics Letters, Elsevier, vol. 107(1), pages 7-9, April.
  9. Orazio Attanasio & Valérie Lechene, 2002. "Tests of Income Pooling in Household Decisions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 720-748, October.
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  13. Apps,Patricia & Rees,Ray, 2009. "Public Economics and the Household," Cambridge Books, Cambridge University Press, number 9780521716284, September.
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  17. Phipps, Shelley A & Burton, Peter S, 1998. "What's Mine Is Yours? The Influence of Male and Female Incomes on Patterns of Household Expenditure," Economica, London School of Economics and Political Science, vol. 65(260), pages 599-613, November.
  18. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  19. Donaldson, David, 1992. "On The Aggregation Of Money Measures Of Well-Being In Applied Welfare Economics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(01), July.
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