In a Markovian stochastic volatility model, we consider financial agents whose investment criteria are modelled by forward exponential performance processes. The problem of contingent claim indifference valuation is first addressed and a number of properties are proved and discussed. Special attention is given to the comparison between the forward exponential and the backward exponential utilit...

Participants in contingent valuation surveys and jurors setting punitive damages in civil trials provide answers denominated in dollars. These answers are better understood as expressions of attitudes than as indications of economic preferences. Well-established characteristics of attitudes and of the core process of affective valuation explain several robust features of dollar responses: high ...

The benefits promised by pension schemes are often rather complex contingent-claims whose valuation requires the specification of the stochastic behaviour of several state-variables such as salaries, inflation rates, rates of return on investments, and so on. The object of this paper is, first of all, to present a valuation model suitable for their pricing, and then to apply this model to the v...

Despite many past papers concerning a …rm’s capital structure, the valuation of debt and equity and cost of capital, there are few that explicitly codify contingent sharing rules for the …rm’s cash‡ow over time. We motivate equity and debt valuation by modeling tax and distress costs using cap and ‡oor technology as well as a default option at maturity. This approach sheds light on theoretical ...

In this note we conduct construct validity tests for dichotomous choice (DC) and polychotomous choice (PC) contingent valuation questions. Contrary to previous results, we find that DC and PC estimates of willingness to pay are theoretically valid, convergent valid, and similar in terms of statistical precision. Similar to previous results, PC respondents are less sensitive to information than ...

A decade of surging bicycle use has attracted little research seeking to measure bicycle utility, infrastructure preferences, and the tension between transportation budgets versus the demands of cyclists, pedestrians, and motorists. A review of the literature shows only one study applying non-market valuation tools to study this issue and demographic surveys tracking gender, age, and income hav...

Australian and New Zealand environmental economists have played a significant role in the development of concepts and their application across three fields within their subdiscipline: non-market valuation, institutional economics and bioeconomic modelling. These contributions have been spurred on by debates within and outside the discipline. Much of the controversy has centred on the validity o...

Consumer Valuation of the Second Generation of Genetically Modified (GM) Foods with Benefits Disclosure. Jae-Hwan Han and R.Wes Harrison, Louisiana State University. Employing contingent valuation method (CVM), the study explores whether or not consumers’ risk/benefit beliefs and knowledge about GM foods affect their behavior as measured by willingness to pay (WTP) a premium for GM beef with be...

This paper discusses the concept o f economic value in relation to the appraisal of marine environmental resources. The difficulties of placing monetary values on environmental goods and services for which there is no market are briefly reviewed. A case study is presented which uses contingent valuation to estimate the user value associated with a recreational beach. The paper concludes that ec...

This paper discusses a new approach to contingent claim valuation in general incomplete market models. We determine the neutral derivative price which occurs if investors maximize their local utility and if derivative demand and supply are balanced. We also introduce the sensitivity process of a contingent claim. This process quantifies the reliability of the neutral derivative price and it can...