Using consumer’s surplus to bound willingness to pay for non-market goods

Abstract

Measuring willingness to pay for non-market goods continues to be problematic for the benefit-cost analyst. This note presents a new procedure for placing a lower bound on that value. The measure identified herein offers the advantage of not requiring any assumptions that are not empirically verifiable, and can be taken using the market demand schedule for any good that has the quantity of the non-market good consumed as an argument.