Nonparametric Bounds on Welfare Measures: A New Tool for Nonmarket Valuation
Economics, Center for Agricultural and Rural Development
Journal or Book Title
Journal of Environmental Economics and Management
First Page or Article ID Number
In this research, we adapt and extend previous work on nonparametric bounds for welfare measures. We present a procedure for estimating upper and lower bounds on each consumer's individual willingness to pay for an environmental improvement. The exciting aspect of this work is that these bounds are derived using only observed quantities and prices of visits to a recreation area without resorting to any parametric assumptions on demand or utility. In Monte Carlo simulations, we find that the bounds have the potential to be narrow enough for policy purposes.
Crooker, John and Kling, Catherine, "Nonparametric Bounds on Welfare Measures: A New Tool for Nonmarket Valuation" (2000). Economics Publications. 149.