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ResearchPaper
2010
Labour as a utility measure in contingent valuation studies : how good is it really?
Labour as a utility measure in contingent valuation studies : how good is it really?
Abstract (English)
The Contingent Valuation Method (CVM) aims at the assessment of people's willingness to pay (WTP) for a public project. The sum of the individual WTPs is interpreted as the social benefits of the project under consideration and compared to the project costs. If the benefits exceed the costs the project is recommended for realization. In very poor societies budgets are so tight that households cannot give up any part of their income, i.e. of their market consumption, in favour of a public project, so that their WTP for that project stated in a CVM interview has to be zero or close to zero. This leads to a severe discrimination against poor regions in the decision process on the allocation of public funds. Therefore, several authors suggest to use labour contributions to the realization of a public project instead of monetary contributions as a measure of people's WTP for that project. In this paper we show theoretically and empirically, based on a CVM study conducted in Vietnam, that labour is severely flawed as a measuring rod for individual utility so that CVM based on labour contributions does not provide a reliable and meaningful decision rule for the allocation of public projects.
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Publication license
Publication series
FZID discussion papers; 13
Published in
Faculty
State Institutes
Faculty of Business, Economics and Social Sciences
Faculty of Business, Economics and Social Sciences
Institute
Forschungszentrum Innovation und Dienstleistung
Institut für Volkswirtschaftslehre (bis 2010)
Institut für Volkswirtschaftslehre (bis 2010)
Examination date
Supervisor
Edition / version
Citation
Identification
DOI
ISSN
ISBN
Language
English
Publisher
Publisher place
Classification (DDC)
330 Economics
Original object
Standardized keywords (GND)
Sustainable Development Goals
BibTeX
@techreport{Ahlheim2010,
url = {https://hohpublica.uni-hohenheim.de/handle/123456789/5319},
author = {Ahlheim, Michael and Frör, Oliver and Heinke, Antonia et al.},
title = {Labour as a utility measure in contingent valuation studies : how good is it really?},
year = {2010},
school = {Universität Hohenheim},
series = {FZID discussion papers},
}