Environmental Economics

Identification of Preferences in Hedonic Models, Volume I of Benefit Analysis Using Implicit Market Methods for Benefit Estimation

This report deals with one approach to inferring the value of environmental improvements - the hedonic method. It is part of the accepted wisdom of economics that environmental quality is a public good. Hence improvements in environmental quality will tend to be provided in less than optimal quantities by decentralized decisions. A corollary to this tenet is that government intervention may be required to provide optimal quantities of environmental improvements. To determine optimal quantities, the costs and benefits of environmental improvements are needed. In practice, optimal quantities of environmental improvements are almost never directly sought. Instead, government intervention for environmental improvements comes in the form of new rules or changes in rules. Benefit cost analysis can be applied to changes in rules to determine whether they are in the right direction. If enough rule changes are evaluated, then optimal quantities of environmental improvements can be achieved indirectly.

  • Keywords

    Subject:
    1. Benefits Analysis
    1. Benefits Analysis - Valuation
    1. Benefits Analysis - Valuation - Revealed Preference
    Environmental Media:
    f. Multimedia
    Authors:
    McConnell, Kenneth E.
    Cropper, Maureen L.
    Mendelsohn, Robert
    Phipps, Tim T.
    EPA Project Officer/ Manager:
    Carlin, Alan
    Geographic Area:
    Study Purpose:
    Methodology Development & Evaluation
    Report Series:
    Benefit Analysis Using Indirect or Imputed Market Methods
    Inventory Record #: EE-0004A
    List of all reports in the Series:
  • Participating Organizations

    Research Organization:

    Maryland, University of, Department of Agricultural and Resource EconomicsAddress: Symons Hall
    City: College Park State: MD ZIP: 20742
    Phone: Fax:
    E-mail:
    Funding Organization:
    Environmental Protection Agency,
    Office of Policy and Resource Management, Office of Policy Analysis
    Address:
    City: Washington State: DC ZIP: 20460
    Phone: Fax:
    E-mail:
  • Report Details
    Type:
    Final
    Date:
    Number of Pages:
    122
    Comment: Completed after October, 1984; probably 1985.
    Grant/Contract #:
    CR-811043-01-0
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