  This study finds exact closed-form solutions for compensating variation (CV)
and equivalent variation (EV) for both marginal and non-marginal changes in
public goods given homothetic utility. The parameters for these solutions are
recoverable from observable data in empirical applications as a single
sufficient statistic summarizes consumer preferences. The closed-form CV and EV
expressions identify three economic mechanisms that determine the magnitudes of
CV and EV. One of these mechanisms, the relative preference effect, helps
explain the disparity between willingness to pay (WTP) and willingness to
accept (WTA) for public goods.
