Valuing Environmental Quality Changes when Quality is a Weak Complement to a Set of Goods

Catherine Kling and Nancy Bockstael

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: In practice, it is frequently impossible to identify a single good which is a weak complement to an environmental amenity for which welfare measures are desired. However, a set of goods exhibiting this property sometimes exists, e.g., water-related recreational activities when the nonmarket good to be valued is water quality. A set of weak complements is defined and implications for welfare measurement presented. The proper welfare measure now involves evaluation of a line integral and simple additions of areas under demand curves will not always be correct. However, under certain econometric circumstances, approximate welfare measures can be obtained from estimated functions.

Date: 1988-11-01
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Published in American Journal of Agricultural Economics, November 1988, vol. 70 no. 3, pp. 654-662

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:1586

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