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Making or Buying Environmental Public Goods: Do Consumers Care?

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  • Douadia Bougherara
  • Sandrine Costa
  • Mario Teisl

Abstract

Firms may voluntarily abate pollution using one of two options: internalizing their own external effects and incurring abatement costs (“making”), or delegating environmental protection by purchasing offsets (“buying”). We aim to elicit consumers’ willingness to pay for producers’ use of the “making” option as compared to the “buying” option, controlling for spatial effects (joint local public goods), and level of greenhouse gas emissions. Using a stated-choice survey of 722 respondents, we find consumers are more willing to pay for a “making” policy. Consumers do significantly care for the producers’ use of offsets when the level of local externalities is controlled for.

Suggested Citation

  • Douadia Bougherara & Sandrine Costa & Mario Teisl, 2013. "Making or Buying Environmental Public Goods: Do Consumers Care?," Land Economics, University of Wisconsin Press, vol. 89(4), pages 767-781.
    • Handle: RePEc:uwp:landec:v:89:y:2013:iv:1:p:767-781
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    References listed on IDEAS

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    1. Marco Costanigro & Dawn Thilmany McFadden & Stephan Kroll & Gretchen Nurse, 2011. "An in‐store valuation of local and organic apples: the role of social desirability," Agribusiness, John Wiley & Sons, Ltd., vol. 27(4), pages 465-477, September.
    2. David Hensher & Nina Shore & Kenneth Train, 2005. "Households’ Willingness to Pay for Water Service Attributes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 509-531, December.
    3. MacKerron, George J. & Egerton, Catrin & Gaskell, Christopher & Parpia, Aimie & Mourato, Susana, 2009. "Willingness to pay for carbon offset certification and co-benefits among (high-)flying young adults in the UK," Energy Policy, Elsevier, vol. 37(4), pages 1372-1381, April.
    4. Yuko Onozaka & Dawn Thilmany Mcfadden, 2011. "Does Local Labeling Complement or Compete with Other Sustainable Labels? A Conjoint Analysis of Direct and Joint Values for Fresh Produce Claim," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 689-702.
    5. Søren Olsen, 2009. "Choosing Between Internet and Mail Survey Modes for Choice Experiment Surveys Considering Non-Market Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(4), pages 591-610, December.
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    Cited by:

    1. Rogers, Abbie A. & Burton, Michael P., 2016. "Public preferences for the design of biodiversity offset policies in Australia," Working Papers 231533, University of Western Australia, School of Agricultural and Resource Economics.
    2. Le Coent, Philippe & Préget, Raphaële & Thoyer, Sophie, 2017. "Compensating Environmental Losses Versus Creating Environmental Gains: Implications for Biodiversity Offsets," Ecological Economics, Elsevier, vol. 142(C), pages 120-129.
    3. Huth, William L. & McEvoy, David M. & Morgan, O. Ashton, 2018. "Controlling an Invasive Species through Consumption: The Case of Lionfish as an Impure Public Good," Ecological Economics, Elsevier, vol. 149(C), pages 74-79.

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    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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