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Some further implications of incorporating the warm glow of giving into welfare measures: A comment on the use of donation mechanisms by Champ et al.

Lookup NU author(s): Professor Susan Chilton

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Abstract

Champ et al. [J. Environ. Management 33, 151-162 (1997)] claim that they have (a) explored the welfare implication of warm glow for Hicksian measures of value for public goods and (b) established that actual donations place a 'theoretical lower bound' on such values. We extend their model to show that warm glow introduces non-neutrality between the value of the good under public and private provision. The resulting ]implication of noninvariance of the benefit measure within benefit-cost analysis is highlighted. We further demonstrate that, in an important area of application, the hypothesis of Champ et al. that donations place a lower bound on Hicksian values may be invalidated.

Publication metadata

Author(s): Chilton SM, Hutchinson WG

Publication type: Article

Publication status: Published

Journal: Journal of Environmental Economics and Management

Year: 1999

Volume: 37

Issue: 2

Pages: 202-209

Print publication date: 01/03/1999

ISSN (print): 0095-0696

ISSN (electronic): 1096-0449

Publisher: Academic Press

URL: http://dx.doi.org/10.1006/jeem.1998.1062

DOI: 10.1006/jeem.1998.1062

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