Working Out the Willingness to Accept and Willingness to Pay Gap Using Economics, Psychology, and Happiness Approaches to Valuation
Document Type
Article
Publication Date
11-8-2013
Abstract
The gap between willingness to accept and willingness to pay is an outcome of incomplete valuation procedure. The solution then is a complete valuation procedure. One approach presented in this paper focuses on the income and substitution effects as the missing items to the valuation procedure. Another approach deals with the hedonic contents of the income, the good, and the setting of the good as the missing items to the valuation procedure. This paper submits a third approach that uses (evaluative) happiness as a proxy of utility while taking account of the hallmarks of the other two valuation procedures: the setting of the good under consideration and the income and substitution effects.
Recommended Citation
Beja, E.L. Working Out the Willingness to Accept and Willingness to Pay Gap Using Economics, Psychology, and Happiness Approaches to Valuation. Applied Research Quality Life 9, 819–829 (2014). https://doi.org/10.1007/s11482-013-9271-5
