Ij. Bateman et al., Estimating four Hicksian welfare measures for a public good: A contingent valuation investigation, LAND ECON, 76(3), 2000, pp. 355-373
Using equivalent loss (the monetary loss equivalent to a proposed amenity r
eduction, EL) and equivalent gain (the gain equivalent to a proposed amenit
y increase, EG) alongside traditional welfare measures in a contingent valu
ation study of traffic disamenity, we report an experiment designed to test
theoretical explanations of the well-known disparity between compensating
surplus and equivalent surplus measures of welfare. No compelling evidence
is found in favor of loss aversion as a cause of the disparity. Meanwhile,
as valuation measures, the performance of EL is similar to the traditional
willingness to pay for a gain, while EG performs poorly. (JEL Q26).