Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
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Daily Overview |
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Land use and sustainable development Location: Auditorium L: Ingrid Simonnæs Session Chair: Simon Disque, University of Hamburg | |
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Heterogeneous substitutability preferences 1: Department of Economics, University of Hamburg, Germany; 2: Department of Economics, University of Gothenburg, Sweden; 3: CESifo Munich, Germany; 4: CEPR, UK and France; 5: Department of Economics, Leipzig University and German Centre for Integrative Biodiversity Research (iDiv) Halle-Jena-Leipzig, Germany We study the heterogeneity of preferences regarding the limited substitutability of environmental public goods vis-a-vis private consumption goods and how it affects the economic valuation of environmental public goods. We show theoretically that mean marginal willingness to pay for an environmental public good decreases in society’s mean substitutability preference and increases in the heterogeneity of individual-level substitutability preferences. We then introduce an experimental framework to elicit individual-level substitutability preferences for the first time directly, which we apply to study general population preferences concerning the trade-off between market goods and forest ecosystem services. We estimate preference parameters for around 1,500 individuals and document substantial preference heterogeneity. The majority of individual preferences imply a complementary relationship, with a median elasticity of substitution (complementarity) of around 0.4 (2.5). We illustrate how accounting for the heterogeneity in substitutability preferences may considerably increase the societal value attached to environmental public goods. These findings are relevant for environmental cost-benefit analysis and for the comprehensive accounting of public natural capital. | |