Rent‐seeking and economic valuation of environmental quality

Femida Handy and Joyce Gleason

International Journal of Social Economics, 2007, vol. 34, issue 7, 436-448

Abstract: Purpose - The paper seeks to address conceptually the issue of monetary valuations of environmental intangibles. Design/methodology/approach - The paper offers an innovative approach based on the rent‐seeking behaviour of individuals, as seen in lobbying for environmental goods. As an alternative to the contingent valuation method, which relies largely on willingness‐to‐pay disclosures in hypothetical situations, this approach depends on actual payments made by individuals in real situations. If individuals are willing to spend scarce resources to obtain an environmental good, then the total expenditures incurred provide an estimate of the value of that environmental good. Findings - The estimates provide a lower bound of value of certain environmental goods. The rent‐seeking approach gives a different and more direct way to determine the value of environmental public goods. Originality/value - The paper considers the free‐rider problem and other issues arising from the voluntary nature of public good rent‐seeking activity.

Keywords: Rents; Public ownership; Social environment (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:v:34:y:2007:i:7:p:436-448

DOI: 10.1108/03068290710760227

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