Non-Price Equilibria for Non-Marketed Goods

64 Pages Posted: 6 Aug 2007 Last revised: 15 Oct 2008

See all articles by Daniel J. Phaneuf

Daniel J. Phaneuf

North Carolina State University - Department of Agricultural & Resource Economics

Jared C. Carbone

Colorado School of Mines

Joseph A. Herriges

Iowa State University - Department of Economics

Date Written: July 1, 2007

Abstract

As part of the Resources for the Future Frontiers of Environmental Economics collection of papers, we consider the problem of general equilibrium feedback effects in non-price space as they relate to non-market valuation. Our overall objective is to examine the extent to which nonprice equilibria arising from both simple and complex sorting behavior can be empirically modeled and the resulting differences in partial and general equilibrium welfare measures quantified. After motivating the problem in general we consider the specific context of congestion in recreation demand applications, which we classify as the outcome of a simple sorting equilibrium. Using both econometric and computable general equilibrium (CGE) models we examine the conceptual and computational challenges associated with this class of problems and present findings on promising solution avenues. We demonstrate the relevance of accounting for congestion effects in recreation demand with an application to lake visits in Iowa. Our econometric and CGE results confirm that, for some plausible counterfactual scenarios, substantial differences exist between partial and general equilibrium welfare estimates. We conclude the paper by describing tasks that are needed to move forward research in this area.

JEL Classification: C35, D58, Q25, Q26

Suggested Citation

Phaneuf, Daniel J. and Carbone, Jared C. and Herriges, Joseph A., Non-Price Equilibria for Non-Marketed Goods (July 1, 2007). RFF Discussion Paper No. 07-25-REV, Available at SSRN: https://ssrn.com/abstract=1004777 or http://dx.doi.org/10.2139/ssrn.1004777

Daniel J. Phaneuf (Contact Author)

North Carolina State University - Department of Agricultural & Resource Economics ( email )

Box 8109
3332 Nelson Hall
Raleigh, NC 27695-8109
United States

Jared C. Carbone

Colorado School of Mines ( email )

1500 Illinois Street
Golden, CO 80401
United States

HOME PAGE: http://www.mines.edu/~jcarbone

Joseph A. Herriges

Iowa State University - Department of Economics ( email )

260 Heady Hall
Ames, IA 50011
United States

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