Unit 5: Valuation Techniques: Lesson and Learning Objectives Flashcards
What are the different types of economic values (2)
Indirect
Direct
What techniques do economists use to estimate the value of the environment and natural resources in monetary terms
Indirect Use Values
Direct Use Values
Total Economic Value encompasses what
Use Value & Nonuse Value
Use: Direct/ Indirect
Nonuse: Option/ Bequest/ Existence
What are the Ecosystem Service Categories
Provisioning: Direct
Regulating: Indirect
Cultural: Indirect
Supporting Services
What are the 5 Valuation Techniques
Market Valuation
Cost of Illness Method
Replacement Cost Method
Revealed Preference Methods
Stated Preference Methods
What is Willingness to Pay
Economic Value that people obtain from a specific resource
What is Willingness to Accept
Minimum amt of money people would accept as compensation for an action that reduces their well being
What are the Revealed Preference Methods
Indirectly revealed through willingness to pay
-observed in markets
-Travel Cost Method
-Hedonic Pricing
-Defensive Expenditures
What is Travel Cost Method
WTP for rec sites
What is Hedonic Pricing
use of statistical analysis to explain price of good as a function of several components
What is Defensive Expenditures
expenditures households take to avoid or mitigate their exposure to a pollutant
What are the Strengths and Weakness of Revealed Preferences
Strengths: real world/dependable
Weakness: restricted/ problematic
What are Stated Preferences
Hypothetical scenarios in surveys
What are the Strengths and Weaknesses of Stated Preferences
Strengths: Flexible/ Novel contexts
Weaknesses: Unrealistic/ Bias
What are Surrogate Markets
Tease out environmental aspect from overall price
ex. hedonic pricing/ travel cost
