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The effects of current income and expected change in future income on stated preferences for environmental improvements

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  • Jacobsen, Jette Bredahl
  • Lundhede, Thomas Hedemark
  • Thorsen, Bo Jellesmark

Abstract

We formulate and test the hypothesis that expectations regarding changes in future income influences the WTP for environmental goods. For valuation of environmental goods in forests and other habitats in Denmark, we find that both current income and expected changes in future income are significant determinants for preferences. The effect of income on WTP seems to be caused by changes in preferences for environmental attributes rather than by marginal utility of income. The results suggest that to evaluate the distributional impacts of environmental improvements, researchers need a better measure of expected future consumption options than current income.

Suggested Citation

  • Jacobsen, Jette Bredahl & Lundhede, Thomas Hedemark & Thorsen, Bo Jellesmark, 2013. "The effects of current income and expected change in future income on stated preferences for environmental improvements," Journal of Forest Economics, Elsevier, vol. 19(2), pages 206-219.
    • Handle: RePEc:eee:foreco:v:19:y:2013:i:2:p:206-219
    DOI: 10.1016/j.jfe.2013.02.002
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    Cited by:

    1. Li, Liqing & Ando, Amy W., 2020. "Early Exposure to Nature and Willingness-To-Pay for Conservation," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304235, Agricultural and Applied Economics Association.
    2. Michalis Skourtos & Dimitris Damigos & Areti Kontogianni & Christos Tourkolias & Alistair Hunt, 2019. "Embedding Preference Uncertainty for Environmental Amenities in Climate Change Economic Assessments: A “Random” Step Forward," Economies, MDPI, vol. 7(4), pages 1-22, October.
    3. Sato, Masayuki & Aoshima, Ippei & Chang, Youngho, 2021. "Connectedness to nature and the conservation of the urban ecosystem: Perspectives from the valuation of urban forests," Forest Policy and Economics, Elsevier, vol. 125(C).
    4. Nielsen, Anne Sofie Elberg & Lundhede, Thomas Hedemark & Jacobsen, Jette Bredahl, 2016. "Local consequences of national policies - A spatial analysis of preferences for forest access reduction," Forest Policy and Economics, Elsevier, vol. 73(C), pages 68-77.
    5. Hidemichi Fujii & Masayuki Sato & Shunsuke Managi, 2017. "Decomposition Analysis of Forest Ecosystem Services Values," Sustainability, MDPI, vol. 9(5), pages 1-14, April.

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    More about this item

    Keywords

    Choice experiment; Income sensitivity of WTP; Environmental valuation; Wildlife; Recreational access; Forests; Wetlands; Fields;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other

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