On the Creation and Destruction of Public Goods: The Matter of Sequencing

We consider sequences where a subset of public goods are systematically being created or destroyed. For the case of strict Hicksian substitutes between all pairs of this subset of public goods, we show that willingness to pay for an increase in a particular public good is strictly decreasing the farther out in a sequence it is valued. For the destruction of public goods the reverse is true for willingness to accept compensation. Thus, sequencing has opposite implications for the assessment of the benefits of providing public goods and for the assessment of the damages from destroying them.