Altruism and the Economic Values of Environmental and Social Policies

Altruism is a type of non-use value which can have different definitions depending on the type of goods entering the utility function of the altruistic person and her expectations about the contributions of others. The purpose of this paper is to measure the trade-offs between different types of altruistic values originating from social and environmental policies. The environmental policies are concerned with reducing the health effects from a power plant while the social policies invove both the accomplishent of public facilities for education and leisure and increasing the income of the affected population. The empirical application utilizes a choice experiment technique which allows for valuation of multiple goods. Health effects are decomposed into the values of the risk of becoming ill, the duration of the episodes and the limitations imposed by illness. Altruistic values are elicited from a population that is not affected by pollution. Results show that altruism is significant for policies directed to reducing health effects and improving the income level of the affected population, whereas there is egoism for a policy orientated to improving the public facilities of the polluted suburb. The value of altruism is significantly affected by the expectations about the net benefits to be received by the recepient population.