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Valuation of public environmental assets by private companies: optimal dust abatement and air quality

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  • Dunn, Peter
  • Schilizzi, Steven

Abstract

This study investigates a new problem in the area of environmental valuation: how much is a public environmental asset worth to a private company? We ask this question in the context of dust abatement, where the asset is air quality. A company wants to know what level of dust abatement is optimal, given the engineering costs of abating and the social costs of not abating. We show that the optimal point for the company lies in between the textbook cases of so-called private optimum and social optimum, which constitute, respectively, a lower and an upper bound for dust abatement. We calculate the upper bound and provide elements for the calculation of the lower bound.

Suggested Citation

  • Dunn, Peter & Schilizzi, Steven, 2003. "Valuation of public environmental assets by private companies: optimal dust abatement and air quality," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57863, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare03:57863
    DOI: 10.22004/ag.econ.57863
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    References listed on IDEAS

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    1. Charles W. Abdalla & Brian A. Roach & Donald J. Epp, 1992. "Valuing Environmental Quality Changes Using Averting Expenditures: An Application to Groundwater Contamination," Land Economics, University of Wisconsin Press, vol. 68(2), pages 163-169.
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    Keywords

    Environmental Economics and Policy;

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