Estimating the general equilibrium benefits of large changes in spatially delineated public goods

Holger Sieg, V. Kerry Smith, H. Spencer Banzhaf, Randy Walsh

Research output: Contribution to journalArticle

125 Scopus citations

Abstract

The purpose of this article is to report a new approach for measuring the general equilibrium willingness to pay for large changes in spatially delineated public goods such as air quality. We estimate the parameters of a locational equilibrium model and compute equilibria for alternative scenarios characterizing the availability of public goods within a system of communities. Welfare measures take into consideration the adjustments of households in equilibrium to nonmarginal changes in public goods. The framework is used to analyze willingness to pay for reductions in ozone concentrations in Southern California between 1990 and 1995.

Original languageEnglish (US)
Pages (from-to)1047-1077
Number of pages31
JournalInternational Economic Review
Volume45
Issue number4
DOIs
StatePublished - Nov 2004

ASJC Scopus subject areas

  • Economics and Econometrics

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