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What lindahl pricing is and how it would work

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Reference no: EM132151447

Protection of endangered species has long been argued to be a good example of a public good. In a recent study that surveyed Americans, it was estimated that their overall willingness to pay from Americans to protect all endangered species from extinction was $70 billion. From the same study/survey however, it was estimated that Americans were willing to pay $15 billion to protect a single species from extinction- a difficult inconsistency to explain given the fact that there are several hundred species that are endangered (and $15 billion times several hundred is nowhere near $70 billion). What problem associated with Lindahl pricing does the above example highlight? (HINT, be sure that in your answer you explain what Lindahl pricing is and how it would work- that is the only way you will be able to connect this situation to the weakness)

Reference no: EM132151447

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