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Environmental Risk Perception and Valuation: Conventional Versus Prospective Reference Theory

  • Chapter
The Social Response to Environmental Risk

Part of the book series: Recent Economic Thought Series ((RETH,volume 24))

Abstract

The definition of the commodity is a central issue in modeling people’s choices in the presence of uncertainty. To appreciate why, we need to consider the modeling strategy inherent in virtually all microeconomic descriptions of people’s values for commodities. Using tradeoffs to infer values is usually the first idea introduced in describing individual behavior with microeconomics. A commodity’s value is measured by how much of some other good a person will give up to get more of the defined commodity. This concept is, of course, the essence of a marginal rate of substitution.

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Author information

Authors and Affiliations

  1. Department of Economics, North Carolina State University, North Carolina, USA

    V. Kerry Smith (University Distinguished Professor)

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  1. V. Kerry Smith
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Editor information

Daniel W. Bromley Kathleen Segerson

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© 1992 Springer Science+Business Media New York

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Smith, V.K. (1992). Environmental Risk Perception and Valuation: Conventional Versus Prospective Reference Theory. In: Bromley, D.W., Segerson, K. (eds) The Social Response to Environmental Risk. Recent Economic Thought Series, vol 24. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2954-1_2

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  • DOI: https://doi.org/10.1007/978-94-011-2954-1_2

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-010-5311-2

  • Online ISBN: 978-94-011-2954-1

  • eBook Packages: Springer Book Archive

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