Impacts of Nonmarket Good Policies on Market Goods: A General Equilibrium Analysis

Most nonmarket valuation procedures have emphasized estimating values in a partial equilibrium context. However, changes in the nonmarket good sector are likely to affect individual's market good consumption choices. Therefore, when there is a change in the nonmarket good sector, based on the assumption of nonseparability between market and nonmarket goods, the changes in the competitive equilibrium state with respect to market goods are examined. Analysis of policy impacts indicates that competitive equilibria change depending upon the nature of substitution and complementary relationships between market and nonmarket goods, and the degree of those relationships.