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Compensating for Public Harms: Why Public Goods Are Preferred to Money

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  • Carol Mansfield
  • George L. Van Houtven
  • Joel Huber

Abstract

This paper provides evidence that public goods represent a more acceptable response to public harms than monetary compensation. We demonstrate a preference for public goods over monetary compensation, in part because receipt of public goods may limit the sense of guilt or bribery from accepting compensation for the injury. More surprising, this preference for public goods over money in the presence of a harm remains in a free-market choice where guilt is not an issue. It appears that public goods psychologically mitigate or balance public harms in a way that makes them more valuable in the presence of public harms.

Suggested Citation

  • Carol Mansfield & George L. Van Houtven & Joel Huber, 2002. "Compensating for Public Harms: Why Public Goods Are Preferred to Money," Land Economics, University of Wisconsin Press, vol. 78(3), pages 368-389.
  • Handle: RePEc:uwp:landec:v:78:y:2002:i:3:p:368-389
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    References listed on IDEAS

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    2. Mansfield, Carol & Van Houtven, George & Huber, Joel, 2001. "The Efficiency of Political Mechanisms for Citing Nuisance Facilities: Are Opponents More Likely to Participate Than Supporters?," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 141-161, March-May.
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    8. Stephen K. Swallow & James J. Opaluch & Thomas F. Weaver, 1992. "Siting Noxious Facilities: An Approach That Integrates Technical, Economic, and Political Considerations," Land Economics, University of Wisconsin Press, vol. 68(3), pages 283-301.
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    12. Kip Viscusi, W. & Magat, Wesley A. & Huber, Joel, 1991. "Pricing environmental health risks: survey assessments of risk-risk and risk-dollar trade-offs for chronic bronchitis," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 32-51, July.
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    Cited by:

    1. Contu, Davide & Strazzera, Elisabetta & Mourato, Susana, 2016. "Modeling individual preferences for energy sources: The case of IV generation nuclear energy in Italy," Ecological Economics, Elsevier, vol. 127(C), pages 37-58.
    2. Kato, Takaaki & Takahara, Shogo & Nishikawa, Masashi & Homma, Toshimitsu, 2013. "A case study of economic incentives and local citizens' attitudes toward hosting a nuclear power plant in Japan: Impacts of the Fukushima accident," Energy Policy, Elsevier, vol. 59(C), pages 808-818.
    3. Upham, Paul & García Pérez, Jesús, 2015. "A cognitive mapping approach to understanding public objection to energy infrastructure: The case of wind power in Galicia, Spain," Renewable Energy, Elsevier, vol. 83(C), pages 587-596.
    4. Virna Vaneza Gutiérrez & Luis Abdón Cifuentes & Nicolás C. Bronfman, 2015. "Factors Influencing Compensation Demanded for Environmental Impacts Generated by Different Economic Activities," Sustainability, MDPI, Open Access Journal, vol. 7(7), pages 1-20, July.
    5. Kermagoret, Charlène & Levrel, Harold & Carlier, Antoine & Dachary-Bernard, Jeanne, 2016. "Individual preferences regarding environmental offset and welfare compensation: a choice experiment application to an offshore wind farm project," Ecological Economics, Elsevier, vol. 129(C), pages 230-240.
    6. Perlaviciute, Goda & Steg, Linda, 2014. "Contextual and psychological factors shaping evaluations and acceptability of energy alternatives: Integrated review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 361-381.
    7. Jonathan Aldred, 2006. "Incommensurability and Monetary Valuation," Land Economics, University of Wisconsin Press, vol. 82(2), pages 141-161.

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    JEL classification:

    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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