Journal of Forest Economics > Vol 19 > Issue 2

The effects of current income and expected change in future income on stated preferences for environmental improvements

Jette Bredahl Jacobsen, , jbj@life.ku.dk Thomas Hedemark Lundhede, , Bo Jellesmark Thorsen, ,
 
Suggested Citation
Jette Bredahl Jacobsen, Thomas Hedemark Lundhede and Bo Jellesmark Thorsen (2013), "The effects of current income and expected change in future income on stated preferences for environmental improvements", Journal of Forest Economics: Vol. 19: No. 2, pp 206-219. http://dx.doi.org/10.1016/j.jfe.2013.02.002

Publication Date: 0/4/2013
© 0 2013 Jette Bredahl Jacobsen, Thomas Hedemark Lundhede, Bo Jellesmark Thorsen
 
Subjects
 
Keywords
JEL Codes:Q51Q57I39
Choice experimentIncome sensitivity of WTPEnvironmental valuationWildlifeRecreational accessForestsWetlandsFields
 

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In this article:
Introduction 
Theory and evidence 
Econometric model 
Survey design 
Results 
Discussion 
Concluding remarks 

Abstract

We formulate and test the hypothesis that expectations regarding changes in future income influences the WTP for environmental goods. For valuation of environmental goods in forests and other habitats in Denmark, we find that both current income and expected changes in future income are significant determinants for preferences. The effect of income on WTP seems to be caused by changes in preferences for environmental attributes rather than by marginal utility of income. The results suggest that to evaluate the distributional impacts of environmental improvements, researchers need a better measure of expected future consumption options than current income.

DOI:10.1016/j.jfe.2013.02.002