In this paper we analyse a setup where consumers are heterogeneous in the perception of environmental quality. The equilibrium is verified in a setting with horizontal and vertical (green) differentiation. Profits are increasing in the misperception of quality, while, the investment in green...

Value estimates for environmental goods can be obtained by either estimating preference parameters as revealed through behavior related to some aspect of the amenity or using stated information concerning preferences for the good. In the environmental economics literature the stated preference...