DP16903 Measuring Consumer Sustainability Benefits

Author(s): Roman Inderst, Stefan Thomas
Publication Date: January 2022
Keyword(s): Antitrust, consumer welfare, sustainability
JEL(s): A13, K21, K32
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16903

While consumer sustainability benefits exhibit particular characteristics, e.g., as they are typically based on non-use value, they can be measured by standard instruments as applied in environmental cost-benefit analysis, such as conjoint analysis and contingent valuation. Their measurement may be particularly sensitive to provided context, which makes it necessary to be particularly careful when measuring consumers' willingness-to-pay. This sensitivity, however, also allows to expand the scope for such benefits and enables an appropriate modelling of the counterfactual. While we advocate for a careful consideration of such more "reflective willingness-to-pay", we are critical about a blank consideration of externalities and with it consumers' willingness-to-pay for a change in the behaviour of other consumers.