VALUING INJURY TO NATURAL RESOURCES: THE EFFECT OF RESOURCE QUALITY INFORMATION ON PERCEPTIONS AND CONTINGENT VALUES

Alan Randall and John Hoehn ()

No 11507, Staff Paper Series from Michigan State University, Department of Agricultural, Food, and Resource Economics

Abstract: Respondents are heterogeneous in their prior information about resource injury. The analysis derives an updating model of how heterogeneous respondents incorporate new information contained in resource injury descriptions. The analysis confirms that the sign of the information effect is determined by the difference between new and prior information. However, in the present analysis, respondents differ in prior information so that treatment information induces different perceptions and different values in different respondents. The empirical analysis confirms that identical treatments result in different injury perceptions. Across respondents, treatment induced changes in perceived injury vary not only in size, but also in sign. Both theory and empirical results show that willingness to pay varies directly with perceived injury.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 25
Date: 2000
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:midasp:11507

DOI: 10.22004/ag.econ.11507

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