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Pré-publication, Document de travail Année : 2021

Accounting for subsistence needs in non-market valuation: A simple proposal

Résumé

Revealed and stated preference techniques are widely used to assess willingness to pay (WTP) for non-market goods as input to public and private decision-making. However, individuals first have to satisfy subsistence needs through market good consumption, which affects their ability to pay. We provide a methodological framework and derive a simple ex post adjustment factor to account for this effect. We quantify its impacts on the WTP for non-market goods and the ranking of projects theoretically, numerically and empirically. This confirms that non-adjusted WTP tends to be plutocratic: the views of the richest-whatever they are-are more likely to impact decision-making, potentially leading to ranking reversal between projects. We also suggest that the subsistence needs-based adjustment factor we propose has a role to play in value transfer procedures. The overall goal is a better representation of the entire population's preferences with regard to non-market goods.
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Dates et versions

halshs-03420613, version 1 (09-11-2021)
halshs-03420613, version 2 (05-04-2022)

Identifiants

  • HAL Id : halshs-03420613 , version 2

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Victor Champonnois, Olivier Chanel. Accounting for subsistence needs in non-market valuation: A simple proposal. 2021. ⟨halshs-03420613v2⟩
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Dernière date de mise à jour le 28/04/2024
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