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.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have