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The Revolution in Welfare Economics and Its Implications for Environmental Valuation and Policy

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  • John M. Gowdy

Abstract

Two research programs are brought together to contribute to the growing body of work on alternatives to standard welfare-based approaches to environmental valuation and policy. The first is the theoretical literature undermining the “new welfare economics.” The second is the growing body of work on endogenous preferences. Both these research programs point to the necessity of interpersonal comparisons in welfare economics. This paper focuses on (1) the theoretical flaws in the use of Potential Pareto Improvements as a policy guide, (2) the “filtering” of expressed preferences through the axioms of consumer choice, and (3) the role of endogenous preferences in a reformulation of environmental valuation and policy.

Suggested Citation

  • John M. Gowdy, 2004. "The Revolution in Welfare Economics and Its Implications for Environmental Valuation and Policy," Land Economics, University of Wisconsin Press, vol. 80(2), pages 239-257.
  • Handle: RePEc:uwp:landec:v:80:y:2004:i:2:p:239-257
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    References listed on IDEAS

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    1. Clarke, Harry R. & Reed, William J., 1989. "The tree-cutting problem in a stochastic environment : The case of age-dependent growth," Journal of Economic Dynamics and Control, Elsevier, pages 569-595.
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    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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