Equity and aggregation in environmental valuation

Lehr, Ulrike; Ahlheim, Michael

Equity and aggregation in environmental valuation

dc.contributor.author	Lehr, Ulrike	de
dc.contributor.author	Ahlheim, Michael	de
dc.date.accessioned	2024-04-08T08:40:45Z
dc.date.available	2024-04-08T08:40:45Z
dc.date.created	2008-07-17
dc.date.issued	2008
dc.description.abstract	Environmental valuation studies aim at the assessment of the social benefits or the social costs caused by some change in environmental quality (in the broadest sense). The most popular field of application of environmental valuation studies is project appraisal where the benefits arising from some environmental project (measured in terms of people's willingness to pay for that project) are assessed and confronted with the costs of the project or with the benefits from some alternative project if a choice has to be made between different projects. A closer look at the results of empirical valuation studies shows that in many surveys a negative correlation between the number auf household members and the willingness to pay (WTP) stated by a household for a project can be observed. These results are rather puzzling because in larger households more people are going to benefit from an environmental improvement than in small households. A plausible explanation for these results is that household budgets are tighter for large households than for smaller households with the same household income. Therefore, large households must state a smaller WTP for a project than smaller households with the same income and the same preferences. This might have consequences for the allocation of public funds in all cases where the realization of a specific environmental project depends on the absolute value of the aggregate social benefits it generates. In order to calculate the social benefits typically the WTPs of the different households affected by that project are added up. In this aggregation process the members of larger households have a lower weight and, therefore, their WTP has a smaller impact on the decision if a certain project is realized or not. The reason for this violation of the principle of horizontal equity is that for the computation of the social benefits not individual but household WTPs are aggregated. In this paper we suggest to use household equivalence scales for the evaluation of WTP data in order to reduce this discrimination of the members of large families. We demonstrate the effects of equivalence scales on the results of environmental valuation surveys using an empirical study carried out in Eastern Germany.	en
dc.identifier.swb	284035238
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/5179
dc.identifier.urn	urn:nbn:de:bsz:100-opus-2892
dc.language.iso	eng
dc.relation.ispartofseries	Hohenheimer Diskussionsbeiträge; 295
dc.rights.license	publ-ohne-pod	en
dc.rights.license	publ-ohne-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_ubh.php
dc.subject.ddc	330
dc.subject.gnd	Kosten-Nutzen-Analyse	de
dc.subject.gnd	Umweltschutzausgaben	de
dc.title	Equity and aggregation in environmental valuation	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.faculty.number	3	de
local.institute.number	520alt	de
local.opus.number	289
local.series.issueNumber	295
local.series.title	Hohenheimer Diskussionsbeiträge
local.university	Universität Hohenheim	de
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institut für Volkswirtschaftslehre (bis 2010)	de

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