Measuring option prices from market behavior

Larson, Douglas M.; Flacco, Paul R.

doi:10.1016/0095-0696(92)90013-m

Cited by 5 publications

(2 citation statements)

References 19 publications

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“…For example, Cameron and Englin (1997) provide an approach to compare option price and expected surplus estimates by using the demand probabilities of recreational fishing participation and fitted probabilities under different acid rain scenarios. While under certain restrictive conditions it is feasible to estimate the option price with revealed preference methods (Larson and Flacco, 1992;Kling, 1993), the CVM is the only approach that can estimate the option price with variation in demand and supply probabilities.…”

Section: Use Of Contingent Valuation In Benefit-cost Analysis 101mentioning

confidence: 99%

The Use of Contingent Valuation in Benefit–Cost Analysis

Whitehead¹,

Blomquist²

2006

Handbook on Contingent Valuation

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Section: Use Of Contingent Valuation In Benefit-cost Analysis 101mentioning

confidence: 99%

The Use of Contingent Valuation in Benefit–Cost Analysis

Whitehead¹,

Blomquist²

2006

Handbook on Contingent Valuation

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“…Option prices for recreation have been estimated using the contingent valuation framework, and there are applications to water qual-ity improvements [e.g., Greenley et al, 1981]. However, though the theory for estimating option prices from actual behavior (through purchases of market goods) has been laid out [Larson and Flacco, 1992] I know of no empirical applications using actual, rather than hypothetical behavior. Option price may depend on the year in the future we are trying to guess about, which begs the issue of the appropriate time frame for climate change [Hall, 1993].…”

Section: Demand Models Under Uncertaintymentioning

confidence: 99%

Problems With Estimating the Economic Impacts of Averting Climate Change: A Look at Water Resources

Shaw¹

1996

Water Resources Research

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Averting climate change may have substantial water‐resource‐related benefits to agricultural, industrial, recreational, and residential household users. Economic benefits are usually estimated assuming that individuals face no uncertainty in decision making, but the benefits from averting climate change will accrue primarily to individuals in the future. Predicting future benefits is usually done using ex ante economic methods, and propogating uncertainty or specifiying the appropriate distributions in estimating the magnitude of the benefits is a problem. After describing the key issues relating climate change and water resources, the paper explains why economic theory fails to demonstrate which method appears more reasonable than the other. Alternatively, we might attempt to estimate the benefits from averting climate change using a benefits analysis of similar events that have already occurred. Many suggestions for conducting a benefits transfer, including one in the area of water‐based recreation, are offered as ways to glean something about possible water‐resource‐related benefits from averting climate change.

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An assessment of the empirical magnitude of option values for environment goods

Kling

1993

Environmental and Resource Economics

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Measuring option prices from market behavior

Cited by 5 publications

References 19 publications

The Use of Contingent Valuation in Benefit–Cost Analysis

The Use of Contingent Valuation in Benefit–Cost Analysis

Problems With Estimating the Economic Impacts of Averting Climate Change: A Look at Water Resources

An assessment of the empirical magnitude of option values for environment goods

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