Approximating WTP and WTA for environmental goods from marginal willingness to pay functions

Willingness to pay (WTP) and willingness to accept (WTA), for a change in the quantity of an environmental good, can be represented by corresponding Hicksian welfare measures. The paper suggests a simple method of approximating WTP and WTA given the information about the marginal willingness to pay (MWTP) for it. It demonstrates that a polynomial based on the MWTP function allows to approximate the Hicksian measures (which may differ considerably) much better than consumer's surplus in quantity space. (C) 2008 Elsevier B.V. All rights reserved.