Rent‐seeking and economic valuation of environmental quality

Abstract

Purpose

The paper seeks to address conceptually the issue of monetary valuations of environmental intangibles.

Design/methodology/approach

The paper offers an innovative approach based on the rent‐seeking behaviour of individuals, as seen in lobbying for environmental goods. As an alternative to the contingent valuation method, which relies largely on willingness‐to‐pay disclosures in hypothetical situations, this approach depends on actual payments made by individuals in real situations. If individuals are willing to spend scarce resources to obtain an environmental good, then the total expenditures incurred provide an estimate of the value of that environmental good.

Findings

The estimates provide a lower bound of value of certain environmental goods. The rent‐seeking approach gives a different and more direct way to determine the value of environmental public goods.

Originality/value

The paper considers the free‐rider problem and other issues arising from the voluntary nature of public good rent‐seeking activity.

Citation

Handy, F. and Gleason, J. (2007), "Rent‐seeking and economic valuation of environmental quality", International Journal of Social Economics, Vol. 34 No. 7, pp. 436-448. https://doi.org/10.1108/03068290710760227