TY - CHAP

T1 - Income distribution and willingness to pay for ecosystem services

AU - Baumgärtner, Stefan

AU - Drupp, Moritz

AU - Munz, Jan

AU - Meya, Jasper

AU - Quaas, Martin F.

N1 - Conference code: 13

PY - 2011

Y1 - 2011

N2 - We study how global income distribution, and income inequality in particular,affects the average willingness to pay (WTP) for ecosystem services. We use amodel (extending Ebert 2003) where individual households have identical preferences over consumption goods and ecosystem services, which are represented by a constantelasticity-of-substitution utility function, and income is log-normally distributed over individuals with given mean and standard deviation. We show that (i) average WTP for ecosystem services increases with mean income if ecosystem services and consumption goods are substitutes or weak complements, and (ii) average WTP for ecosystem services decreases (increases) with income inequality if ecosystem services and consumptiongoods are substitutes (complements). We illustrate our results with empirical dataon the global income distribution (from World Bank 2011) and on the income elasticity of WTP for ecosystem services (from the meta-study of Jacobsen and Hanley 2009).

AB - We study how global income distribution, and income inequality in particular,affects the average willingness to pay (WTP) for ecosystem services. We use amodel (extending Ebert 2003) where individual households have identical preferences over consumption goods and ecosystem services, which are represented by a constantelasticity-of-substitution utility function, and income is log-normally distributed over individuals with given mean and standard deviation. We show that (i) average WTP for ecosystem services increases with mean income if ecosystem services and consumption goods are substitutes or weak complements, and (ii) average WTP for ecosystem services decreases (increases) with income inequality if ecosystem services and consumptiongoods are substitutes (complements). We illustrate our results with empirical dataon the global income distribution (from World Bank 2011) and on the income elasticity of WTP for ecosystem services (from the meta-study of Jacobsen and Hanley 2009).

KW - Sustainability sciences, Management & Economics

KW - ecosystem services

KW - income distribution

KW - inequality

KW - willingness to pay

KW - contingent valuation

UR - http://www.bioecon-network.org/pages/13th_2011/Baumgaertner.pdf

UR - http://www.bioecon-network.org/pages/13th_2011/papers13.html

M3 - Article in conference proceedings

BT - 13th Annual BIOECON Conference “Resource Economics, Biodiversity Conservation and Development

PB - Bioecon

T2 - 13th Annual BIOdiversity and Economics for Conservation Conference - BIOECON 2013

Y2 - 11 September 2011 through 13 September 2011

ER -