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The relationship between individual and household measures of WTP and WTA

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  • Udo Ebert

    ()

Abstract

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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File URL: http://hdl.handle.net/10.1007/s00355-011-0607-5
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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
Contact details of provider: Web page: http://www.springer.com

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Order Information: Web: http://www.springer.com/economics/economic+theory/journal/355

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  1. Udo Ebert & Patrick Moyes, 2009. "Household decisions and equivalence scales," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(4), pages 1039-1062, October.
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  3. John Quiggin, 1998. "Individual and Household Willingness to Pay for Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 58-63.
  4. Orazio Attanasio & Valerie 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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  6. Ebert, Udo, 2010. "Household willingness to pay and income pooling: A comment," Economics Letters, Elsevier, vol. 107(1), pages 7-9, April.
  7. Dasgupta, Dipankar & Itaya, Jun-ichi, 1992. "Comparative Statics for the Private Provision of Public Goods in a Conjectural Variations Model with Heterogeneous Agents," Public Finance = Finances publiques, , vol. 47(1), pages 17-31.
  8. Munro, Alistair, 2005. "Household willingness to pay equals individual willingness to pay if and only if the household income pools," Economics Letters, Elsevier, vol. 88(2), pages 227-230, August.
  9. Couprie, Hélène & Peluso, Eugenio & Trannoy, Alain, 2010. "Is power more evenly balanced in poor households?," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 493-507, August.
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  12. Martin Browning & Pierre-André Chiappori & Valérie Lechene, 2006. "Collective and Unitary Models: A Clarification," Review of Economics of the Household, Springer, vol. 4(1), pages 5-14, 03.
  13. Browning, Martin & Francois Bourguignon & Pierre-Andre Chiappori & Valerie Lechene, 1994. "Income and Outcomes: A Structural Model of Intrahousehold Allocation," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1067-1096, December.
  14. Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-647, June.
  15. Jon Strand, 2007. "Public-good valuation and intra-family allocation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(4), pages 527-543, December.
  16. 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.
  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. Cornes,Richard, 1992. "Duality and Modern Economics," Cambridge Books, Cambridge University Press, number 9780521336017, September.
  19. Daniel T. Slesnick, 1998. "Empirical Approaches to the Measurement of Welfare," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2108-2165, December.
  20. Ebert, Udo, 1987. "Axiomatic foundations of Hicksian measures of welfare change," Journal of Public Economics, Elsevier, vol. 33(1), pages 115-124, June.
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  22. Manser, Marilyn & Brown, Murray, 1980. "Marriage and Household Decision-Making: A Bargaining Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 31-44, February.
  23. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
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Cited by:

  1. Wiktor Adamowicz & Mark Dickie & Shelby Gerking & Marcella Veronesi & David Zinner, 2014. "Household Decision Making and Valuation of Environmental Health Risks to Parents and Their Children," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 481-519.

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