Valuing the environment Ch 4 Flashcards
Total economic value
the value of a resource considering both use and nonuse values.
Use values
the value that people place on the tangible or physical benefits of a good or service.
Nonuse values
values that people obtain without actually using a resource. Nonuse values include existence, option, and bequest values.
Direct use value
the value one obtains by directly using a natural resource, such as harvesting a tree or visiting a national park.
Indirect use value
ecosystem benefits that are not valued in markets, such as flood prevention and pollution absorption.
Option value (non-use)
the value that people place on the maintenance of future options for resource use (e.g. future recreation, potential medicine).
Bequest value (non-use)
the value that people place on the knowledge that a resource will be available for future generations
Existence value (non-use)
the value people place on a resource from just knowing it exists.
Revealed preference method (valuation)
methods of economic evaluation based on observed behavior. Measures use values only. Examples are hedonic and travel cost methods.
Stated preference techniques (valuation)
economic valuation methods based on survey responses to hypothetical scenarios in which respondents are asked about their willingness to pay or willingness to accept. Measures both use and non-use values. Examples: contingent valuation
Hedonic pricing method
attempts to relate the price of a marketed good to its underlying characteristics. It is a revealed preference method.
The Travel Cost method
is a revealed preference technique for estimating the use values of the recreational benefits of environmental resources – national parks, forests, reserves, fishing, and hunting sites.
Contingent valuation (stated preference)
is a survey-based stated preference technique that asks people how much they would be willing to pay (WTP) or willing to accept (WTA) in a hypothetical scenario.
