“…Jakobsson and Dragun (1996) find that, under both discrete and continuous response formats, mean WTP for possum protection under a donation mechanisms was 35% lower than under a tax mechanism. Stevens et al (1991), meanwhile, find that, when confronted with a voluntary payment method for protecting wildlife, 40% of respondents who indicated they were not willing to pay stated that wildlife should be preserved through taxes or license fees. Similarly, Harris and Brown (1992) present survey respondents with a choice of four payment methods for a reduction in wildlife impacts; the majority of respondents preferred collective payment methods.…”
Section: Related CV Researchmentioning
confidence: 99%
“…Third, respondents may be answering the survey truthfully and simply not fully recognize a difference between voluntary and collective WTP or the existence of free riding or strategic behavior incentives. 22 It deserves note, however, that some contemporary CV studies continue to place credence on voluntary payment methods despite incentive compatibility concerns (see, e.g., Stevens et al 1991, Champ et al 1997). …”
Section: Private Versus Public Goods Models In Contingent Valuation Smentioning
“…Jakobsson and Dragun (1996) find that, under both discrete and continuous response formats, mean WTP for possum protection under a donation mechanisms was 35% lower than under a tax mechanism. Stevens et al (1991), meanwhile, find that, when confronted with a voluntary payment method for protecting wildlife, 40% of respondents who indicated they were not willing to pay stated that wildlife should be preserved through taxes or license fees. Similarly, Harris and Brown (1992) present survey respondents with a choice of four payment methods for a reduction in wildlife impacts; the majority of respondents preferred collective payment methods.…”
Section: Related CV Researchmentioning
confidence: 99%
“…Third, respondents may be answering the survey truthfully and simply not fully recognize a difference between voluntary and collective WTP or the existence of free riding or strategic behavior incentives. 22 It deserves note, however, that some contemporary CV studies continue to place credence on voluntary payment methods despite incentive compatibility concerns (see, e.g., Stevens et al 1991, Champ et al 1997). …”
Section: Private Versus Public Goods Models In Contingent Valuation Smentioning
“…For example, Stevens et al (1991) found that around a quarter of the individuals in their US study about wildlife preservation hold lexicographical preferences.…”
We are grateful for comments from Cuong Le Van and Agustin Perez Barahona. The second author appreciates the support of COST Action IS1104 "The EU in the new economic complex geography: models, tools and policy evaluation".
AbstractIn this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have a discrete impact on how an agent trades off future consumption and environmental quality. In other words, we endogenize the semi-elasticity of utility based on a step function. We motivate the existence of the threshold based on research from political science, from arguments based on regulation and standards, cultural economics as well as ecological economics.Our results are that the location of the threshold determines both the potential steady states as well as the dynamics. For low (high) thresholds, environmental quality converges to a low (high) steady state. For intermediate levels it converges to a stable p-cycle, with environmental quality being asymptotically bounded below and above by the low and high steady state. We discuss implications for intergenerational equity and policy making.As policy implications we study shifts in the threshold. Our results are that, in case it is costless to shift the threshold, it is always worthwhile to do so. If it is costly to change the threshold, then it is worthwhile to change the threshold if the threshold originally was sufficiently low. Lump-sum taxes may lead to a development trap and should be avoided if there are uncertainties about the threshold or the effectiveness of the policy. JEL classification: Q28, Q56.
“…To my knowledge, the only available evidence comes from some contingent valuation studies where minorities of interviewees have stated that they want environmental amenities to be preserved whatever the cost -14% of the sample in Hanley and Milne (1996), 23% of the sample in Spash and Hanley (1995) and 24% in Stevens et al (1991), to give some examples. Given that the validity of these hypothetical surveys is highly contested by many economists (e.g.…”
Section: The Real Issue: Substitutability Of Natural Capitalmentioning
The cost-benefit study of Nordhaus (1994) is representative for the neoclassical approach towards global warming. Nordhaus found that no substantial emission cuts are warranted. Most of his critics have concentrated on the issue of discounting and demanded that a lower discount rate should be applied. These criticisms first miss the point and second lead to ethically dubious, inconsistent conclusions and inefficient policy choices.They miss the point because the real problem of Nordhaus's methodology is his implicit underlying assumption of perfect substitutability between natural and other forms of capital. Given the validity of this assumption, lowering the rate of discount is inconsistent with current savings behaviour, is ethically dubious because future generations will be much richer than the current one anyway, and is inefficient because scarce financial resources are channelled into emissions abatement that exhibits rates of return far inferior to alternative public investments. Any call for aggressive emission abatement must therefore directly attack the perfect substitutability assumption of neoclassical economics and show that man-made capital and natural capital are complementary. The real disagreement is about whether consumption growth can compensate for environmental degradation caused by global warming. Discounting is not the issue, but substitutability is. Unfortunately, proponents of aggressive emission abatement have so far failed to provide either convincing evidence or conEnergy Policy Substitutability, not discounting, is the issue.3 vincing a priori reasons that man-made capital and natural capital should indeed be regarded as complements rather than substitutes.
AcknowledgementI thank James Putzel, Michael Jacobs, Christian Azar, Clive Spash and Lord Meghnad Desai and an anonymous referee for helpful comments.
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