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Approximating WTP and WTA for environmental goods from marginal willingness to pay functions

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  • Ebert, Udo

Abstract

Willingness to pay (WTP) and willingness to accept (WTA), for a change in the quantity of an environmental good, can be represented by corresponding Hicksian welfare measures. The paper suggests a simple method of approximating WTP and WTA given the information about the marginal willingness to pay (MWTP) for it. It demonstrates that a polynomial based on the MWTP function allows to approximate the Hicksian measures (which may differ considerably) much better than consumer's surplus in quantity space.

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  • Ebert, Udo, 2008. "Approximating WTP and WTA for environmental goods from marginal willingness to pay functions," Ecological Economics, Elsevier, vol. 66(2-3), pages 270-274, June.
    • Handle: RePEc:eee:ecolec:v:66:y:2008:i:2-3:p:270-274
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    Cited by:

    1. Víctor Gómez-Valenzuela & Francisco Alpízar & Katerin Ramirez & Solhanlle Bonilla-Duarte & Harro van Lente, 2021. "At a Conservation Crossroad: The Bahoruco-Jaragua-Enriquillo Biosphere Reserve in the Dominican Republic," Sustainability, MDPI, vol. 13(19), pages 1-20, October.
    2. Udo Ebert, 2010. "On the Measurement of Welfare for Market and Nonmarket Goods: A Numerical Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 102-109.

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