Market simulation and the provision of public goods: A non-paternalistic response to anomalies in environmental evaluation

Robert Sugden

Journal of Environmental Economics and Management, 2009, vol. 57, issue 1, pages 87-103

Abstract: Most normative economics assumes that individuals have coherent preferences. This paper responds to growing evidence of failures of this assumption, particularly in the context of stated-preference methods widely used in environmental policy analysis. It proposes a non-paternalistic concept of consumer sovereignty that does not assume preference coherence, is satisfied by competitive markets, and can be applied to the provision of public goods. A key implication is that decisions should reflect valuations revealed [`]at the point of consumption'. Such valuations, which can be inferred from hedonic prices, may be less susceptible to willingness-to-accept (WTA)/willingness-to-pay (WTP) disparities than those elicited by stated-preference methods.

Keywords: Market; simulation; Public; goods; Paternalism; Environmental; evaluation (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jeeman:v:57:y:2009:i:1:p:87-103

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