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Embedding effects in valuation of non-market goods

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  • Sælensminde, Kjartan

Abstract

Cost-benefit analysis (CBA) undertaken for the road sector in Norway includes non-market goods such as travel time savings, traffic safety, noise and air pollution. Traditionally, these non-market goods are valued through separate willingness to pay studies without attention to interactions between them. This paper shows that a simultaneous valuation procedure, accounting for embedding effects between the non-market goods included in CBA for road investments, significantly reduces the valuations of travel time savings, noise and air pollution compared to a separate valuation procedure. Another result is that a reminder of substitutes and budget constraints seems less necessary if the valuation procedure is more holistic.

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  • Sælensminde, Kjartan, 2003. "Embedding effects in valuation of non-market goods," Transport Policy, Elsevier, vol. 10(1), pages 59-72, January.
    • Handle: RePEc:eee:trapol:v:10:y:2003:i:1:p:59-72
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    2. Saelensminde, Kjartan, 2006. "Causes and consequences of lexicographic choices in stated choice studies," Ecological Economics, Elsevier, vol. 59(3), pages 331-340, September.
    3. Sælensminde, Kjartan, 2004. "Cost-benefit analyses of walking and cycling track networks taking into account insecurity, health effects and external costs of motorized traffic," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(8), pages 593-606, October.
    4. Goldberg, Isabell & Roosen, Jutta, 2005. "Measuring Consumer Willingness to Pay for a Health Risk Reduction of Salmonellosis and Campylobacteriosis," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24512, European Association of Agricultural Economists.

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