Approximating WTP and WTA for environmental goods from marginal willingness to pay functions

descriptionPublicationkeyboard_double_arrow_right Article 01 Jun 2008 English Publisher:Elsevier BVJournal:Ecological Economics, volume 66, pages 270-274 (issn: 0921-8009,

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Authors: Udo Ebert;

doi: 10.1016/j.ecolecon.2008.02.015

Approximating WTP and WTA for environmental goods from marginal willingness to pay functions

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Abstract

Abstract Willingness to pay (WTP) and willingness to accept (WTA), for a change in the quantity of an environmental good, can be represented by corresponding Hicksian welfare measures. The paper suggests a simple method of approximating WTP and WTA given the information about the marginal willingness to pay (MWTP) for it. It demonstrates that a polynomial based on the MWTP function allows to approximate the Hicksian measures (which may differ considerably) much better than consumer's surplus in quantity space.

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Carl von Ossietzky University of Oldenburg
Germany

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