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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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File URL: http://hdl.handle.net/10.1007/s00355-011-0607-5
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Article provided by Springer 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
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  4. Ebert, Udo, 2010. "Household willingness to pay and income pooling: A comment," Economics Letters, Elsevier, vol. 107(1), pages 7-9, April.
  5. Udo Ebert & Patrick Moyes, 2009. "Household decisions and equivalence scales," Journal of Population Economics, Springer, vol. 22(4), pages 1039-1062, October.
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  9. Valerie Lechene & Martin Browning, 2004. "Collective and unitary models: a clarification," Economics Series Working Papers 191, University of Oxford, Department of Economics.
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  11. 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.
  12. Slivinski, Alan D, 1987. "The Normative Characterization of Aggregate Consumers' Surplus Measures," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(3), pages 559-81, October.
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  14. 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.
  15. 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.
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  17. Pollak, Robert A., 1981. "The social cost of living index," Journal of Public Economics, Elsevier, vol. 15(3), pages 311-336, June.
  18. 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.
  19. 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.
  20. 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 635-47, June.
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