Valuing ecosystem services in general equilibrium
We explore the consequences of treating the multiple, non-market benefits associated with improvements in ecosystem health and the market economy from which damage to these ecosystems stems as an integrated system. We find that willingness to pay measures of use-based ecosystem services are impacted by the changes in demand for complementary market goods. Demand for these goods shifts due to the introduction of pollution regulations that deliver improvements in ecosystem services. As a result, partial equilibrium estimates of these use values may be measured with substantial error if they fail to account for the general equilibrium adjustments caused by the regulation. We also find that the basic physical/biological connections between the resources underlying use and non-use values for ecosystems may have important implications for the measurement of these values.
|Date of creation:||Mar 2010|
|Publication status:||published as Carbone, J. C. and V. K. Smith. 2013. Valuing nature in a general equilibrium. Journal of Environmental Economics and Management 66(1):72-89. DOI: 10.1016/j.jeem.2012.12.007.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stéphane Gauthier & Guy Laroque, 2009.
"Separability and public finance,"
- Agnar Sandmo, 1980. "Anomaly and Stability in the Theory of Externalities," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 799-807.
- Perroni, Carlo, 1992.
"Homothetic representation of regular non-homothetic preferences,"
Elsevier, vol. 40(1), pages 19-22, September.
- Perroni, C., 1992. "Homothetic Representation of Regular Non-Homothetic Preferences," Working Papers 91158, Wilfrid Laurier University, Department of Economics.
- V. Kerry Smith, 2004. "Krutilla's Legacy: Twenty-First-Century Challenges for Environmental Economics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1167-1178.
- H. Spencer Banzhaf & Dallas Burtraw & David Evans & Alan Krupnick, 2006. "Valuation of Natural Resource Improvements in the Adirondacks," Land Economics, University of Wisconsin Press, vol. 82(3), pages 445-464.
- Peter A. Diamond & James A. Mirrlees, 1973. "Aggregate Production with Consumption Externalities," The Quarterly Journal of Economics, Oxford University Press, vol. 87(1), pages 1-24.
- Finnoff, David & Tschirhart, John, 2003. "Harvesting in an eight-species ecosystem," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 589-611, May.
- Willig, Robert D., 1978. "Incremental consumer's surplus and hedonic price adjustment," Journal of Economic Theory, Elsevier, vol. 17(2), pages 227-253, April.
- Carbone, Jared C. & Smith, V. Kerry, 2008. "Evaluating policy interventions with general equilibrium externalities," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1254-1274, June.
- J. Andrès Espinosa & V. Kerry Smith, 1995. "Measuring the Environmental Consequences of Trade Policy: A Nonmarket CGE Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 772-777.
- Bergstrom, Theodore C. & Cornes, Richard C., 1981. "Gorman and Musgrave are dual : An Antipodean theorem on public goods," Economics Letters, Elsevier, vol. 7(4), pages 371-378.
- Richard E, Just & Darrell L. Heuth & Andrew Schmitz, 2004. "The Welfare Economics of Public Policy," Books, Edward Elgar Publishing, number 3342.
- McConnell, K. E., 1990. "Models for referendum data: The structure of discrete choice models for contingent valuation," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 19-34, January.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:15844. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.