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Nonmarket goods include quality aspects of market goods and public goods which may be substitutes or complements for private goods. Traditional methods of measuring benefits of exogenous changes in nonmarket goods are based on Marshallian demand: change in spending on market goods or change in consumer surplus. More recently, willingness to pay and accept have been used as welfare measures. This paper defines the relationships among alternative measures of welfare for perfect substitutes, imperfect substitutes, and complements. Examples are given to demonstrate how to obtain exact measures from systems of market good demand equations.

Alternative measures of benefit for nonmarket goods which are substitutes or complements for market goods