Olivier Chanel

Résumé  :

Il s'agit d'un travail en cours avec Victor Champonnois (AMSE)

Revealed and stated preference techniques are widely used to assess individuals' non-market preferences, in particular in cost benefit analysis (CBA). First, however, individuals have to satisfy subsistence needs through market good consumption, which affects their budget constraint. The impact of subsistence needs on preference elicitation for, and pricing of, a non-market good or service have not been extensively explored. In this paper, we first provide a methodological framework showing how both preferences and pricing depend on level of subsistence needs and income. We then quantify these impacts by comparing this framework with the standard framework from a theoretical, a numerical and an empirical perspective. In particular, we consider individual preferences for the non-market good that differ according to level of income. Our findings confirm the relevance of accounting for subsistence needs when relying on non-market valuation methods, especially in CBA.