Individual Option Prices for Climate Change Mitigation

University of Oregon Economics Department Working Papers from University of Oregon Economics Department

Abstract: Willingness to pay for climate change mitigation depends on people's perceptions about just how bad things will get if nothing is done. Individual subjective distributions for future climate conditions are combined with stated preference discrete choice data over alternative climate policies to estimate individual option prices (the appropriate ex ante welfare measure in the face of uncertainty) for climate change mitigation. We find significant scope effects in the estimated option prices according to both expected conditions and degree of uncertainty.

Keywords: option prices; climate change; stated preferences; contingent valuation; state-dependent preferences (search for similar items in EconPapers)
JEL-codes: H0 D8 N5 Q2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-ene and nep-mic
Date: 2002-07-20
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Related works:
Journal Article: Individual option prices for climate change mitigation (2005)
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