Lexicographic preferences in contingent valuation: a theoretical framework with illustrations

摘要

This paper considers some implications of L~*-ordering, an incommensurable preference model proposed in earlier CV literature. The structure and existence of inverse demand functions is shown to be a function of three elements, the relationship between goods and wants, WTA/WTP formats and the endowment of the good. In a many-to-many relationship uncompensated and even compensated inverse demand functions may exist, whereas a one-to-one relationship, implicitly assumed in earlier literature, does notnecessarily produce either. An illustration is provided in support of the theoretical framework, especially the hypothesis that one-to-one relationship and high share of CV responses revealing lexicographic preferences are correlated.