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Benefit estimation goes to court: The case of natural resource damage assessments

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  • Raymond J. Kopp
  • V. Kerry Smith

Abstract

This article evaluates the feasibility of performing natural resource damage assessments under the current Superfund legislation. Using the analyses developed for two recent cases, it explains the sources of the substantial divergences between plaintiffs' and defendants' estimates of these damages. Three factors explain the differences in damage estimates: (1) the time horizon used and treatment of capitalization effects of past damages; (2) the extent of the market assumed in estimating the effects of a release of hazardous wastes on the demand for the affected natural resource; and (3) the character and availability of substitutes for the resource involved.

Suggested Citation

  • Raymond J. Kopp & V. Kerry Smith, 1989. "Benefit estimation goes to court: The case of natural resource damage assessments," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(4), pages 593-612.
    • Handle: RePEc:wly:jpamgt:v:8:y:1989:i:4:p:593-612
    DOI: 10.2307/3325046
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    References listed on IDEAS

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    1. Steven Shavell, 1979. "Risk Sharing and Incentives in the Principal and Agent Relationship," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 55-73, Spring.
    2. Graham, Daniel A, 1981. "Cost-Benefit Analysis under Uncertainty," American Economic Review, American Economic Association, vol. 71(4), pages 715-725, September.
    3. Brown, Gardner M, Jr & Pollakowski, Henry O, 1977. "Economic Valuation of Shoreline," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 272-278, August.
    4. Don L. Coursey & John L. Hovis & William D. Schulze, 1987. "The Disparity Between Willingness to Accept and Willingness to Pay Measures of Value," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(3), pages 679-690.
    5. V. Kerry Smith, 1985. "Supply Uncertainty, Option Price, and Indirect Benefit Estimation," Land Economics, University of Wisconsin Press, vol. 64(3), pages 303-307.
    6. V. Kerry Smith & Raymond J. Kopp, 1980. "The Spatial Limits of the Travel Cost Recreational Demand Model," Land Economics, University of Wisconsin Press, vol. 56(1), pages 64-72.
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    Cited by:

    1. V. Kerry Smith, 2018. "Benefits Transfer: Current Practice and Prospects," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(3), pages 449-466, March.
    2. Smith, V. Kerry, 2023. "Accounting for income inequality in benefit transfers: The importance of the income elasticity of WTP," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    3. Axel Klaphake & Volkmar Hartje & Jürgen Meyerhoff, 2005. "Die Monetarisierung ökologischer Schäden in einer europäischen Haftungsregelung: Anmerkungen zur Schadensbewertung angesichts der Erfahrungen in den USA," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(1), pages 23-39, February.
    4. Patrick Point, 1992. "Les services rendus par le patrimoine naturel : une évaluation fondée sur des principes économiques," Économie et Statistique, Programme National Persée, vol. 258(1), pages 11-18.
    5. V. Kerry Smith & Carol Mansfield, 2015. "The design of benefit–cost architecture for homeland security policy analysis," Chapters, in: Carol Mansfield & V. K. Smith (ed.), Benefit–Cost Analyses for Security Policies, chapter 2, pages 26-60, Edward Elgar Publishing.
    6. Blam Inna, 2005. "Households' Demand for Higher Environmental Quality: The Case of Russia," EERC Working Paper Series 05-08e, EERC Research Network, Russia and CIS.
    7. Marc D. Davidson, 2017. "Equity and the Conservation of Global Ecosystem Services," Sustainability, MDPI, vol. 9(3), pages 1-15, February.

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