Consumer Surplus with Apology: A Historical Perspective on Nonmarket Valuation and Recreation Demand

Spencer Banzhaf

Annual Review of Resource Economics, 2010, vol. 2, issue 1, 183-207

Abstract: When economists first turned to applied benefit-cost analysis in the 1930s and 1940s, prices were the only widely accepted measure of benefits. Perhaps surprisingly, economists did not consider measures like consumer surplus, which seemed quite foreign. Consequently, when they turned to nonmarket valuation for goods like outdoor recreation, their constructed demand curves seemed less informative than a simple equilibrium price. As they struggled with how to make use of such information, natural resource economists set important precedents for the larger profession in coming to consumer surplus as a new measure of benefits. By creating important precedents and learning through practice, they shaped the discipline as much as they were shaped by received theory. At the same time, by coming to these notions in the context of political debates, they were also shaped by the norms of the state.

Keywords: benefit-cost analysis; history of economic thought; outdoor recreation; welfare economics (search for similar items in EconPapers)
JEL-codes: D61 Q26 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (10)

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