TY - JOUR
T1 - Valuing amenity resources under uncertainty
T2 - A skeptical view of recent resolutions
AU - Smith, V. Kerry
N1 - Funding Information:
For each possible pair of contingent claims prices for the two states, select that payment combination for each individual which has the greatest value at these prices. Adding these payments across individuals yields a point on the aggregate willingness-to-pay locus. Justification of the project hinges upon the question of whether or not contingent prices exist at which aggregate willingness to pay in each state exceeds the corresponding resource cost of ‘University Distinguished Professor of Economics, North Carolina State University, and Resources for the Future University Fellow. Thanks are due to three anonymous referees and to Dennis Cory for detailed and constructive comments on earlier drafts of this paper. Partial support for this research was provided by Resources for the Future. ‘Gory and Saliba [5] (p. 3 and footnote 6) claim this support by arguing that Graham advocated the maximum expected value of the willingness-to-pay. As they acknowledge, his argument is only in the case of individual risk and does not contradict the general summary I cited earlier. As Graham [14] explains, what is at issue here is whether the: equilibrium prices for contingent dollar claims against alternative states tend to be equal to the probabilities of the states. The simplified procedure followed in this case is made possible, in essence, by knowledge that prices equal to the probabilities of the individual states will yield an efficient distribution of risk (p. 721).
Copyright:
Copyright 2014 Elsevier B.V., All rights reserved.
PY - 1990/9
Y1 - 1990/9
N2 - This paper questions Colby and Cory's recent characterization [1987, 1988, 1989] of the appropriate benefit measures to be used to value improvements in the quantity, quality, or conditions of access to environmental resources under uncertainty. The paper uses Graham's [1981] analysis of individual and aggregate welfare measurement under uncertainty to demonstrate the problems with Colby and Cory's recommendations. It evaluates their classification of important research issues and summarizes in general terms the difficulties that arise in the practical implementation of the conceptual measures for benefits under uncertainty.
AB - This paper questions Colby and Cory's recent characterization [1987, 1988, 1989] of the appropriate benefit measures to be used to value improvements in the quantity, quality, or conditions of access to environmental resources under uncertainty. The paper uses Graham's [1981] analysis of individual and aggregate welfare measurement under uncertainty to demonstrate the problems with Colby and Cory's recommendations. It evaluates their classification of important research issues and summarizes in general terms the difficulties that arise in the practical implementation of the conceptual measures for benefits under uncertainty.
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U2 - 10.1016/0095-0696(90)90068-A
DO - 10.1016/0095-0696(90)90068-A
M3 - Article
AN - SCOPUS:38249017799
VL - 19
SP - 193
EP - 202
JO - Journal of Environmental Economics and Management
JF - Journal of Environmental Economics and Management
SN - 0095-0696
IS - 2
ER -