Chapter 5

Question 1

Private adaptation

Answer 1

people take action
- e.g., stay out of sun, drink water

Question 2

what do we want to value?

Answer 2

Impact of CC damage
Improved environmental quality
National parks
Ecosystem conservation
Endangered species

Question 3

2 revealed preferences methods

Answer 3

1. Hedonic pricing
2. Travel cost

Question 4

Hedonic Pricing?

Answer 4

Uses regression analysis to infer environmental values from spending on goods which include environmental aspects

Question 5

2 stated preferences methods?

Answer 5

1. contingent valuation
2. choice experiment

Question 6

Contingent Valuation?

Answer 6

survey directly asks to state their values (WTP/WTA)

Question 7

Elicitation approaches?

Answer 7

Open ended.
Payment card
Bidding game

Question 8

How do you use CV in CBA?

Answer 8

WTP - cost = CBA

Question 9

Which CBA do you pick?

Answer 9

Whichever is higher

Question 10

can estimate amount to compensate households if…

Answer 10

WTP premium > cost difference

Question 11

Calculate charge by?

Answer 11

WTP premium + private cost = TEC fossil fuel

Question 12

Choice experiments?

Answer 12

utility based on characteristics of a good
Given choice between 2 goods
goods described in terms of attributes
Choice gives marginal willingness to pay

Question 13

Main difference between CV & CE?

Answer 13

CV estimates WTP for a certain scenario
CE estimates marginal WTP for attributes of a scenario.

Question 14

Advantage of CE

Answer 14

Reduce yes-saying
Reduce protest answers
Allows multi attribute valuation

Question 15

WTP definition?

Answer 15

max you’d pay to secure price fall

Question 16

WTAC definition?

Answer 16

minimum you’d accept to forgo a price fall

Question 17

WTP & WTAC differences?

Answer 17

budget constraint different
voluntary & involuntary risks different
people attach value to status quo