Why existence value should be used in cost-benefit analysis

Nonuse value is well-defined and represents nothing more than the value individuals place on a particularly pure form of public good. Moreover, when cast in this light, nonuse value fits into the existing structure of contemporary welfare theory, athough a rigourous incorporation has yet to appear i...

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Bibliographic Details
Main Author: Kopp, R.J.
Format: Book Chapter
Language:English
Subjects:
COST BENEFIT ANALYSIS
ECONOMIC ANALYSIS
ECONOMICS
ENERGY PLANNING, POLICY AND ECONOMY
INSTITUTIONAL FACTORS 290200 > Energy Planning & Policy-- Economics & Sociology
LIFE STYLES
PUBLIC POLICY
RESOURCES
SOCIO-ECONOMIC FACTORS
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Summary:Nonuse value is well-defined and represents nothing more than the value individuals place on a particularly pure form of public good. Moreover, when cast in this light, nonuse value fits into the existing structure of contemporary welfare theory, athough a rigourous incorporation has yet to appear in the published literature. Incorporating existence value in cost-benefit studies is a large and burdensome task, but policy makers implicitly incorporate these values into decisions on the basis of no quantitative evidence. Analysis should be undertaken to provide evidence on the size and distribution of these values. Nonuse values are consistent with neoclassical welfare theory and this theory provides a solid foundation upon which to help evaluate the desirability of many public policies.
ISSN:0276-8739
1520-6688
DOI:10.1002/9781444307177.ch19