ABSTRACT
For market goods, welfare effects due to changes in prices have been defined in terms of the area under the appropriate Hicks-compensated demand curve. For nonmarket goods, welfare effects due to changes in quantities have been defined in terms of the area under the marginal willingness-to-pay (WTP) curve for the good or service. The marginal WTP curves exist for public goods and nonmarket goods such as the services of the environment, but they cannot be estimated from direct observations of transactions in these goods. Given the absence of markets for public goods and environmental goods, how can information on demand and benefits be obtained?
