+1 (218) 451-4151 info@writersnest.org

In the language of economists, “willingness to pay” describes the amount of money a person would sacrifice in order to obtain an additional unit of utility. In environmental economics, specifically, WTP is used to reflect the maximum amount a person would give up in exchange for an increase in an environmental “good” (for example, a one-unit increase in the cleanliness of a lake) or the minimum amount a person would accept in exchange for an environmental “bad” (for example, a one-unit increase in air pollution). Certainly, WTP can be a useful tool when used during standard cost-benefit analysis. However, the specific use of WTP as a measure of environmental values is flawed in several respects: it is dependent on the public’s awareness and understanding of environmental issues; it entails severe practical difficulties in quantification; and, since WTP varies by income, it is fundamentally inequitable as a measurement standard.
An old adage asks: “If a tree falls in the forest, but no one is around to hear it, does it make a sound?” Similarly, in pondering the effectiveness of …
… middle of paper …