Lexicographic Preferences in Contingent Valuation: A Theoretical Framework with Illustrations

Mika Rekola

Land Economics, 2003, vol. 79, issue 2, 277-291

Abstract: This paper considers some implications of L*-ordering, an incommensurable preference model proposed in earlier CVliterature. The structure and existence of inverse demand functions is shown to be a function of three elements, the relationship between goods and wants, WTA/ WTP formats and the endowment of the good. In a many-to-many relationship uncompensated and even compensated inverse demand functions may exist, whereas a one-to-one relationship, implicitly assumed in earlier literature, does not necessarily produce either. An illustration is provided in support of the theoretical framework, especially the hypothesis that one-to-one relationship and high share of CV responses revealing lexicographic preferences are correlated.

JEL-codes: Q26 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (20)

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