Quasi-option value: Some misconceptions dispelled

Anthony C. Fisher, William Hanemann

Research output: Contribution to journalArticle

56 Citations (Scopus)

Abstract

We discuss a couple of important issues in the recent literature on quasi-option value. We show that the assertion that quasi-option value can be negative in a model with independent learning is based on confusion between quasi-option value, which is always positive, and the net benefit of preservation (of a natural environment subject to development), which is not. We also explore the significance of different assumptions about the nature of learning and show that the result that quasi-option value is positive is surprisingly robust.

Original languageEnglish (US)
Pages (from-to)183-190
Number of pages8
JournalJournal of Environmental Economics and Management
Volume14
Issue number2
DOIs
StatePublished - 1987
Externally publishedYes

Fingerprint

learning
Option value
natural environment

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

Cite this

Quasi-option value : Some misconceptions dispelled. / Fisher, Anthony C.; Hanemann, William.

In: Journal of Environmental Economics and Management, Vol. 14, No. 2, 1987, p. 183-190.

Research output: Contribution to journalArticle

@article{167c434eb53a491884c00141d7e31575,
title = "Quasi-option value: Some misconceptions dispelled",
abstract = "We discuss a couple of important issues in the recent literature on quasi-option value. We show that the assertion that quasi-option value can be negative in a model with independent learning is based on confusion between quasi-option value, which is always positive, and the net benefit of preservation (of a natural environment subject to development), which is not. We also explore the significance of different assumptions about the nature of learning and show that the result that quasi-option value is positive is surprisingly robust.",
author = "Fisher, {Anthony C.} and William Hanemann",
year = "1987",
doi = "10.1016/0095-0696(87)90015-5",
language = "English (US)",
volume = "14",
pages = "183--190",
journal = "Journal of Environmental Economics and Management",
issn = "0095-0696",
publisher = "Academic Press Inc.",
number = "2",

}

TY - JOUR

T1 - Quasi-option value

T2 - Some misconceptions dispelled

AU - Fisher, Anthony C.

AU - Hanemann, William

PY - 1987

Y1 - 1987

N2 - We discuss a couple of important issues in the recent literature on quasi-option value. We show that the assertion that quasi-option value can be negative in a model with independent learning is based on confusion between quasi-option value, which is always positive, and the net benefit of preservation (of a natural environment subject to development), which is not. We also explore the significance of different assumptions about the nature of learning and show that the result that quasi-option value is positive is surprisingly robust.

AB - We discuss a couple of important issues in the recent literature on quasi-option value. We show that the assertion that quasi-option value can be negative in a model with independent learning is based on confusion between quasi-option value, which is always positive, and the net benefit of preservation (of a natural environment subject to development), which is not. We also explore the significance of different assumptions about the nature of learning and show that the result that quasi-option value is positive is surprisingly robust.

UR - http://www.scopus.com/inward/record.url?scp=38249033363&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=38249033363&partnerID=8YFLogxK

U2 - 10.1016/0095-0696(87)90015-5

DO - 10.1016/0095-0696(87)90015-5

M3 - Article

AN - SCOPUS:38249033363

VL - 14

SP - 183

EP - 190

JO - Journal of Environmental Economics and Management

JF - Journal of Environmental Economics and Management

SN - 0095-0696

IS - 2

ER -