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- Title
Environmental Valuation with Imperfect Information.
- Authors
LEGGETT, CHRISTOPHER G.
- Abstract
This paper considers welfare analysis with the random utility model (RUM) when perceptions of environmental quality differ from objective measures of environmental quality. Environmental quality is assumed to be an experience good, so that while perceptions of quality determine choices, ex post utility is determined by objective quality. Given this assumption, I derive a measure of the welfare impact of changes in environmental quality, and I show how this new welfare measure differs from the traditional welfare measure developed by Hanemann (1982). This new welfare measure provides an approach to measuring the value of information about environmental quality within the framework of the random utility model.
- Subjects
VALUATION; ENVIRONMENTAL quality; ENVIRONMENTAL economics; SENSORY perception; UTILITY theory; WELFARE economics; LOGITS; ECONOMIC demand
- Publication
Environmental & Resource Economics, 2002, Vol 23, Issue 3, p343
- ISSN
0924-6460
- Publication type
Article
- DOI
10.1023/A:1021289010879