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Increasing At An Increasing Rate: The Potential Convexity Of Discrete-Choice Welfare Measures

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  • Lupi, Frank

Abstract

When environmental quality enters random utility models linearly, welfare measures are convex in quality. The convexity is partly due to site substitution, and it has policy implications for whether changes in quality should be concentrated or diffuse. These functional form effects are illustrated in a model of Great Lakes fishing.

Suggested Citation

  • Lupi, Frank, 1998. "Increasing At An Increasing Rate: The Potential Convexity Of Discrete-Choice Welfare Measures," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20970, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea98:20970
    DOI: 10.22004/ag.econ.20970
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    References listed on IDEAS

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    1. Boyle, Kevin J., 1990. "Dichotomous-Choice, Contingent-Valuation Questions: Functional Form Is Important," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(2), pages 1-7, October.
    2. Hanemann, W. Michael, 1982. "Applied Welfare Analysis with Qualitative Response Models," CUDARE Working Papers 7160, University of California, Berkeley, Department of Agricultural and Resource Economics.
    3. Small, Kenneth A & Rosen, Harvey S, 1981. "Applied Welfare Economics with Discrete Choice Models," Econometrica, Econometric Society, vol. 49(1), pages 105-130, January.
    4. Helfand Gloria E. & Rubin Jonathan, 1994. "Spreading versus Concentrating Damages: Environmental Policy in the Presence of Nonconvexities," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 84-91, July.
    5. Hanemann, W. Michael, 1983. "Marginal welfare measures for discrete choice models," Economics Letters, Elsevier, vol. 13(2-3), pages 129-136.
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    Keywords

    Environmental Economics and Policy;

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