How revealed preferences could be used

Reference no: EM133261260

Question: According to the WWF,3 the population of Southern Beaufort Sea polar bears in Alaska and Northwest Territories has declined by 40% from 2001 to 2010. Suppose that the Canadian government is interested in a project that would stop the decline in the number of polar bears. This project would reduce greenhouse gas emissions (responsible for ice melting, which in turn is related to the decline in the number of polar bears). The benefit of this project is the preservation of the existing population of polar bears, while the cost of this project includes expenses such as the cost of installing energy efficient heating/cooling systems in buildings, the cost of improving public transportation to discourage driving, etc. The government has already calculated the cost of this project. However, you have been asked to offer policy recommendations on the calculation of the benefits. You are aware of two options: contingent valuation and revealed preferences.

-Suggest how revealed preferences could be used as alternative approach to quantify the benefit of protecting polar bears. Provide a specific example.

Reference no: EM133261260

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