IDEAS home Printed from https://ideas.repec.org/p/lsu/lsuwpp/2008-08.html
   My bibliography  Save this paper

Falsifying the �Goodness� of Nonmarket Goods with Revealed Preference

Author

Listed:
  • David G. Brown

Abstract

Some assert that it is impossible to test preference restrictions against revealed preference. The �goodness� preference restriction simply assumes that one value of a nonmarket good is preferred over another other with any fixed commodity consumption. This paper uses a preference-theoretic methodology to show how goodness can be falsified by revealed preference for compensation-based welfare analysis. When goodness is not directly falsifiable, it is still possible to use revealed preference to set lower bounds on goodness that may be so implausible as to provide an indirect falsification of goodness. In addition to potential application of these techniques with real-world problems, the principal contribution of this paper is demonstrating that it is possible to test nonmarket good preference restrictions using only revealed preference. This paper also illustrates the possible contributions of preference-theoretic methodology in a literature that is dominated by the discussion of calculus-based techniques.

Suggested Citation

  • David G. Brown, 2008. "Falsifying the �Goodness� of Nonmarket Goods with Revealed Preference," Departmental Working Papers 2008-08, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2008-08
    as

    Download full text from publisher

    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap08_08.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Herriges, Joseph A. & Kling, Catherine L. & Phaneuf, Daniel J., 2004. "What's the use? welfare estimates from revealed preference models when weak complementarity does not hold," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 55-70, January.
    2. Ebert, Udo, 2001. "A general approach to the evaluation of nonmarket goods," Resource and Energy Economics, Elsevier, vol. 23(4), pages 373-388, October.
    3. Udo Ebert, 1998. "Evaluation of Nonmarket Goods: Recovering Unconditional Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 241-254.
    4. V. Kerry Smith & H. Spencer Banzhaf, 2004. "A Diagrammatic Exposition of Weak Complementarity and the Willig Condition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 455-466.
    5. von Haefen, Roger H., 2007. "Empirical strategies for incorporating weak complementarity into consumer demand models," Journal of Environmental Economics and Management, Elsevier, vol. 54(1), pages 15-31, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David G. Brown, 2008. "Preference-Theoretic Weak Complementarity: Getting More with Less," Departmental Working Papers 2008-09, Department of Economics, Louisiana State University.
    2. Palmquist, Raymond B., 2005. "Weak complementarity, path independence, and the intuition of the Willig condition," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 103-115, January.
    3. David G. Brown, 2009. "A Revealed Preference Feasibility Condition for Weak Complementarity," Departmental Working Papers 2009-08, Department of Economics, Louisiana State University.
    4. Ebert, Udo, 2007. "Revealed preference and household production," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 276-289, March.
    5. Landry, Craig E. & Shonkwiler, J. Scott & Whitehead, John C., 2020. "Economic Values of Coastal Erosion Management: Joint Estimation of Use and Existence Values with recreation demand and contingent valuation data," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    6. V. Smith & Mary Evans & H. Banzhaf & Christine Poulos, 2010. "Can Weak Substitution be Rehabilitated?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 203-221, February.
    7. Laura Blow & Richard Blundell, 2018. "A Nonparametric Revealed Preference Approach to Measuring the Value of Environmental Quality," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(3), pages 503-527, March.
    8. Tatsuo Suwa, 2008. "Estimation of the spatial substitution effect of national park trip demand: an application of the Kuhn-Tucker model," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 9(4), pages 239-257, December.
    9. von Haefen, Roger H., 2007. "Empirical strategies for incorporating weak complementarity into consumer demand models," Journal of Environmental Economics and Management, Elsevier, vol. 54(1), pages 15-31, July.
    10. Revesz, Richard & Stavins, Robert, 2004. "Environmental Law and Policy," Working Paper Series rwp04-023, Harvard University, John F. Kennedy School of Government.
    11. Kovacs, Kent F. & Larson, Douglas M., 2006. "Recreation at open space and residential development patterns," 2006 Annual meeting, July 23-26, Long Beach, CA 271502, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Eom, Young-Sook & Larson, Douglas M., 2006. "Improving environmental valuation estimates through consistent use of revealed and stated preference information," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 501-516, July.
    13. David G. Brown, 2008. "A Preference-Theoretic Methodology for Nonmarket Goods," Departmental Working Papers 2008-07, Department of Economics, Louisiana State University.
    14. Kuriyama, Koichi & Michael Hanemann, W. & Hilger, James R., 2010. "A latent segmentation approach to a Kuhn-Tucker model: An application to recreation demand," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 209-220, November.
    15. H. Spencer Banzhaf, 2021. "Difference-in-Differences Hedonics," Journal of Political Economy, University of Chicago Press, vol. 129(8), pages 2385-2414.
    16. Tatsuo Suwa, 2008. "Estimation of the spatial substitution effect of national park trip demand: an application of the Kuhn-Tucker model," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 9(4), pages 239-257, December.
    17. Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761, Elsevier.
    18. Cloé Garnache & Scott M. Swinton & Joseph A. Herriges & Frank Lupi & R. Jan Stevenson, 2016. "Solving the Phosphorus Pollution Puzzle: Synthesis and Directions for Future Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1334-1359.
    19. Castro, Marisol & Bhat, Chandra R. & Pendyala, Ram M. & Jara-Díaz, Sergio R., 2012. "Accommodating multiple constraints in the multiple discrete–continuous extreme value (MDCEV) choice model," Transportation Research Part B: Methodological, Elsevier, vol. 46(6), pages 729-743.
    20. Jared C. Carbone & V. Kerry Smith, 2010. "Valuing ecosystem services in general equilibrium," NBER Working Papers 15844, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lsu:lsuwpp:2008-08. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/delsuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.