Nonmarket Valuation

Question 1

Nonmarket Valuation

Answer 1

methods of valuing amenities that don’t naturally have a monetary value

Question 2

Total Economic Value

Answer 2

Use Value - Nonuse Value

Question 3

Use Value

Answer 3

the value people place on the use of a good or service

Question 4

Direct Use Value

Answer 4

Value one obtains by directly using a good or service

Question 5

Indirect Use Value

Answer 5

beneficial services provided freely by nature (i.e. flood protection, water purification, soil formation, etc.)

Question 6

Extractive Direct Use Value (example)

Answer 6

value one gets from eating wild berries on a nature trail; you physically TAKE the good or service to enjoy its value

Question 7

Nonextractive Direct Use Value (example)

Answer 7

value one gets from going on a walk in nature; you enjoy the value of the good or service without taking said good/service

Question 8

Nonuse Value

Answer 8

values people obtain without actually sing the resource (i.e. good or service)

Question 9

Option Value

Answer 9

value placed on the maintenance of future options for use

Question 10

Bequest Value

Answer 10

value placed on the knowledge that a resource will be available for future generations

Question 11

Existence Value

Answer 11

value placed on a resource that people do not intend to ever use

Question 12

Willingness to Pay (WTP)

Answer 12

the maximum amount of money people are willing to pay for a good/service that increases their utility

Question 13

Willingness to Accept (WTA)

Answer 13

the maximum amount of money people would willingly accept as compensation for an action that reduces their utility; tends to be higher that WTP

Question 14

Endowment Effect (i.e. “Loss Aversion”)

Answer 14

people tend to put a higher value on something after they already possess it, relative to its value BEFORE they possessed it

Question 15

Revealed Preference Methods

Answer 15

these methods infer value based on market decisions

Question 16

Direct Revealed Preferences

Answer 16

preferences that identify values for goods/services by monitoring that good/service’s market

Question 17

Indirect Revealed Preference Methods

Answer 17

methods that look at adjacent markets

Question 18

Travel Cost Method

Answer 18

using actual visitation expenditures to establish a lower bound to an individual’s WTP to visit a particular site/environmental amenity

Question 19

Hedonic Pricing Models

Answer 19

decomposing a market’s valuation of a good/service to establish values for different characteristics in the good/service (ex. Property Value (Use Value) and Wage Value (lower bound of WTP))

Question 20

Replacement Cost Methods

Answer 20

estimating cost necessary to replace or store a resource

Question 21

Defensive Expenditure Methods

Answer 21

valuation based on the expenditures households take to avoid or mitigate their exposure to a pollutant

Question 22

Stated Preference Methods

Answer 22

asking people about their values

Question 23

Contingent Valuation

Answer 23

DIRECTLY asking respondents for their values; i.e. “How much?”, “Would you pay/accept…”

Question 24

Contingent Ranking

Answer 24

INDIRECTLY asking for values by having respondents rank options

Question 25

Strategic Bias

Answer 25

answering inaccurately to promote a particular policy outcome

Question 26

“Yea Saying” Bias

Answer 26

answering in a way the respondent thinks the research wants

Question 27

Range/Starting Point Bias

Answer 27

response is influenced by provided options

Question 28

Information Bias

Answer 28

respondent has no knowledge about the item in question

Question 29

Hypothetical Bias

Answer 29

ill considered responses because the survey “isn’t real,” i.e. there is no expectation for the respondent to act on their response