Estimating Four Hicksian Welfare Measures for a Public Good: A Contingent Valuation Investigation

Ian Bateman, Ian H. Langford, Alistair Munro, Chris Starmer and Robert Sugden

Land Economics, 2000, vol. 76, issue 3, 355-373

Abstract: Using equivalent loss (the monetary loss equivalent to a proposed amenity reduction, EL) and equivalent gain (the gain equivalent to a proposed amenity increase, EG) alongside traditional welfare measures in a contingent valuation study of traffic disamenity, we report an experiment designed to test theoretical explanations of the well-known disparity between compensating surplus and equivalent surplus measures of welfare. No compelling evidence is found in favor of loss aversion as a cause of the disparity. Meanwhile, as valuation measures, the performance of EL is similar to the traditional willingness to pay for a gain, while EG performs poorly.

JEL-codes: Q26 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:uwp:landec:v:76:y:2000:i:3:p:355-373

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