The effects of current income and expected change in future income on stated preferences for environmental improvements

Jette Bredahl Jacobsen, Thomas Hedemark Lundhede and Bo Thorsen

Journal of Forest Economics, 2013, vol. 19, issue 2, 206-219

Abstract: We formulate and test the hypothesis that expectations regarding changes in future income influences the WTP for environmental goods. For valuation of environmental goods in forests and other habitats in Denmark, we find that both current income and expected changes in future income are significant determinants for preferences. The effect of income on WTP seems to be caused by changes in preferences for environmental attributes rather than by marginal utility of income. The results suggest that to evaluate the distributional impacts of environmental improvements, researchers need a better measure of expected future consumption options than current income.

Keywords: Choice experiment; Income sensitivity of WTP; Environmental valuation; Wildlife; Recreational access; Forests; Wetlands; Fields (search for similar items in EconPapers)
JEL-codes: I39 Q51 Q57 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:foreco:v:19:y:2013:i:2:p:206-219

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DOI: 10.1016/j.jfe.2013.02.002

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