chapter 4 Flashcards
why should you value the environment
damage estimates for policy design and the court
assessing magnitude of damage
identifying affected categories
estimating the physical relationship between the pollutant and damages caused to categories
estimating response by the effected parties toward averting/mitigating some portion of the damage
placing a monetary value on the physical damage
total wtp
use value + option value + non use value
use value
direct use, even scenic beauty
passive use value
resource is not actually used up in the process of experiencing it
option value
reflect the value people place on a future ability to use the environment
wtp to preserve the option to use in the future
non use value
people are wtp for improving or preserving resources that they will never use
bequest
wtp to ensure it is available for your kids
existence
wtp tp ensure it is available in the absence of any future interest
revealed preference valuation
based on actual observable choices that allow resource values to be directly inferred from those choices
stated preference valuation
not directly observable attempt to derive value by using a survey to est wtp
stated preference direct methods
contingent valuation: ask respondents what value they would place on an environmental change or on preserving it
stated preference indirect methods
attribute based: respondents are asked to choose among alternate bundles of goods
contingent ranking: ranking options
major concerns with stated preference
strategic bias: intend to influence outcome
information bias: force to value attributes they have little experience with
starting-point bias: could occur when they have to check off answers from a predetermined range of possibilities
hypothetical bias: biased answer for personal reasons
discrepancy between wtp and wta: wta > wtp
cvm
effective in est. non use and passive value methods but lack the accuracy to estimate use value
btm
estimates for one site to be based upon estimates from other sites or benefits from an earlier time period to provide the foundation for a current estimate
revealed preference direct methods
market price
revealed preference indirect methods
travel cost method: infer value of a recreational resource by using info on how much the visitors spent getting to the sit to construct a demand curve for wtp
1) examine number of trips there
2) examine whether people decided to visit a site and which one
hedonic property value: use market price data and then break down the house sales price into its components included house, neighborhood, and environmental characteristics
hedonic wage: workers in high risk environment = higher wages
averting expenditure: potential expenses needed to deal with a problem
amount of money people are wtp to protect themselves from pollution damages
gis
made up of layers such that many variables can be visualized simultaneously using overlays used fro estimating health impacts and associated with economic values of changes in air pollution runs health impact functions - related change in concentration of pollution with change in health
human valuation
the economic approach values the change in probability of death resulting from the reduction in environmental risk
VSL
represents an individuals wtp for small changes in mortality risks
amount individual wtp / reduction in probability
