Book contents
- Frontmatter
- Contents
- About the authors
- Part I Introduction
- Part II Measuring ecosystem services
- Part III Valuing ecosystem services
- 5 Economic values of ecosystem services
- 6 Economic valuation methods for ecosystem services
- 7 Trade-offs and decision-support tools for managing ecosystem services
- Part IV Paying for ecosystem services
- Part V Governing ecosystem services
- Index
- Plate section
- References
6 - Economic valuation methods for ecosystem services
from Part III - Valuing ecosystem services
Published online by Cambridge University Press: 05 February 2015
Book contents
- Frontmatter
- Contents
- About the authors
- Part I Introduction
- Part II Measuring ecosystem services
- Part III Valuing ecosystem services
- 5 Economic values of ecosystem services
- 6 Economic valuation methods for ecosystem services
- 7 Trade-offs and decision-support tools for managing ecosystem services
- Part IV Paying for ecosystem services
- Part V Governing ecosystem services
- Index
- Plate section
- References
Summary
Introduction
Various valuation methods exist and have been applied to estimate the values of different ecosystem services. The methods reflect the extent to which the services provided by ecosystems touch on the welfare of society either as direct determinants of individuals’ well-being (e.g. as consumer goods) or via production processes (e.g. as intermediate goods). The aim of this chapter is to provide an overview of available valuation methods, to discuss their advantages and disadvantages, and to provide guidance on when to use which method. In doing so we do not aim to be comprehensive; extensive details of the underlying theory and on the actual practice of applying the valuation methods are provided in general texts, including Braden and Kolstad (1991), Freeman (2003), Bateman et al. (2002), Mitchell and Carson (1989), Champ et al. (2003), Bockstael and McConnell (2007), and Kanninen (2007).
A number of economic valuation methods have been developed to estimate the value of changes in ecosystem services. An important distinction is between market-based and non-market-based valuation methods. Market-based valuation means that existing market behavior and market transactions are used as the basis for the valuation exercise. Economic values are derived from actual market prices for ecosystem services, both when they are used as inputs in production processes (production values) and when they provide direct outputs (consumption values). By observing how much of an ecosystem service is bought and sold at different prices, it is possible to infer directly how people value that good. Examples of market-based methods are the use of direct market prices, net factor income and production function methods, and the calculation of replacement costs, defensive expenditures, and avoided damage costs.
- Type
- Chapter
- Information
- Ecosystem ServicesFrom Concept to Practice, pp. 108 - 131Publisher: Cambridge University PressPrint publication year: 2015
References
, , , and (1998). Stated preference approaches for measuring passive use values: choice experiments and contingent valuation. American Journal of Agricultural Economics, 80: 64–75.CrossRefGoogle Scholar
, , and (2007). Combining actual and contingent behaviour to estimate the value of sports fishing in the Lagoon of Venice. Ecological Economics, 61: 530–541.CrossRefGoogle Scholar
and (2002). Divers’ willingness to pay visit marine sanctuaries: an exploratory study. Ocean and Coastal Management, 45: 171–183.CrossRefGoogle Scholar
and (1998). Valuing mangrove-fishery linkages: a case study of Campeche, Mexico. Environmental and Resource Economics, 12: 151–166.CrossRefGoogle Scholar
(2002). The transferability of benefit transfer: contingent valuation of water quality improvements in Costa Rica. Ecological Economics, 42: 147–164.CrossRefGoogle Scholar
and (2003). Contrasting conventional with multi-level modelling approaches to meta-analysis: an illustration using UK woodland recreation values. Land Economics, 79: 235–258.CrossRefGoogle Scholar
, , , et al. (2002). Economic Valuation with Stated Preference Techniques: A Manual. Cheltenham, UK: Edward Elgar.CrossRefGoogle Scholar
, , and (1995). Benefit transfer: testing for accuracy and reliability. Discussion Paper #D-03/1995, Department of Economics and Social Sciences, Agricultural University of Norway.
and (2007). Environmental and Resource Valuation with Revealed Preferences: A Theoretical Guide to Empirical Models. Dordrecht, the Netherlands: Springer.Google Scholar
, , and (1994). What do we know about groundwater values? Preliminary implications from a meta-analysis of contingent-valuation studies. American Journal of Agricultural Economics, 76: 1055–1061.CrossRefGoogle Scholar
and (1991). Measuring the Demand for Environmental Quality. Amsterdam, the Netherlands: Elsevier Science Publishers.Google Scholar
and (2011). The value of urban open space: meta-analyses of contingent valuation and hedonic pricing results. Journal of Environmental Management, 92: 2763–2773.CrossRefGoogle ScholarPubMed
, , and (2006). The empirics of wetland valuation: a comprehensive summary and meta-analysis of the literature. Environmental and Resource Economics, 33, 223–250.CrossRefGoogle Scholar
(2000). Environmental value transfer: state of the art and future prospects. Ecological Economics, 32, 137–152.CrossRefGoogle Scholar
(2006). Do stated preference methods stand the test of time? A test of the stability of contingent values and models for health risks when facing an extreme event. Ecological Economics, 60: 399–406.CrossRefGoogle Scholar
and (2005). Benefits transfer of willingness to pay estimates and functions for health-risk reductions: a cross-country study. Journal of Health Economics, 24: 591–611.CrossRefGoogle ScholarPubMed
, , , and (1999). A meta-analysis of wetland contingent valuation studies. Regional Environmental Change, 1: 47–57.CrossRefGoogle Scholar
, , , and (1996). Contingent valuation and revealed preference methodologies: comparing the estimates for quasi-public goods. Land Economics, 72: 80–98.CrossRefGoogle Scholar
, and (eds) (2003). A Primer on Nonmarket Valuation. Dordrecht, the Netherlands: Kluwer Academic Publishers.CrossRef
, and (1992). Benefit transfer: conceptual problems in estimating water quality benefits using existing studies. Water Resources Research, 28: 675–683.CrossRefGoogle Scholar
(2003). The Measurement of Environmental and Resource Values. Theory and Methods. Washington DC: Resources for the Future.Google Scholar
, , and (1997). Environmental Economics in Theory and Practice. Houndmills, England: MacMillan Press.CrossRefGoogle Scholar
, , , , , , and (1998). Contingent valuation versus choice experiments: estimating the benefits of environmentally sensitive areas in Scotland. Journal of Agricultural Economics, 49: 1–15.CrossRefGoogle Scholar
, , and (2003). Modeling relationships between use and nonuse values for surface water quality: a meta-analysis. Water Resources Research, 39: 1363–1372.CrossRefGoogle Scholar
, , , et al. (2005). Systematic variation in willingness to pay for aquatic resource improvements and implications for benefit transfer: a meta-analysis. Canadian Journal of Agricultural Economics, 53: 221–248.CrossRefGoogle Scholar
, , , and (2006). What determines willingness to pay per fish? A meta-analysis of recreational fishing values. Marine Resource Economics, 21: 1–32.CrossRefGoogle Scholar
(2007). Valuing Environmental Amenities Using Stated Choice Studies: A Common Sense Approach to Theory and Practice. Dordrecht, the Netherlands: Springer.CrossRefGoogle Scholar
and (2013). Divestment of the English forestry estate: an economically sound choice?Ecological Economics, 88: 25–31.CrossRefGoogle Scholar
(2005). Millennium Ecosystem Assessment: Ecosystems and Human Well-being: Synthesis. Washington DC: Island Press.Google Scholar
and (1989). Using Surveys to Value Public Goods: The Contingent Valuation Method. Washington DC: Resources for the Future.Google Scholar
, , and (2006). A comparison of contingent valuation and choice modelling with second-order interactions. Journal of Forest Economics, 12: 5–30.CrossRefGoogle Scholar
, , and (2009). Combining contingent valuation and choice experiments. A forestry application in Spain. Environmental and Resource Economics, 43: 535–551.CrossRefGoogle Scholar
and (2004). National and international benefit transfer testing with a rigorous test procedure. Environmental and Resource Economics, 29, 323–336.CrossRefGoogle Scholar
and (2007). Review of methods for value transfer. In and (eds), Environmental Value Transfer: Issues and Methods. Dordrecht, the Netherlands: Springer.CrossRefGoogle Scholar
, , and (1994). Project and Policy Appraisal: Integrating Economics and Environment. Paris: OECD.Google Scholar
(1975). The social and economic importance of the Caroni Swamp in Trinidad and Tobago. PhD thesis. University of Michigan.
, , and (1997). Measuring amenity benefits from farmland: hedonic pricing vs. contingent valuation. Growth and Change, 28: 438–458.CrossRefGoogle Scholar
, , , et al. (2004). Benefit transfer in Europe: how reliable are transfers between countries?Environmental and Resource Economics, 29: 67–82.CrossRefGoogle Scholar
(1974). Hedonic prices and implicit markets: product differentiation in pure competition. Journal of Political Economy, 82: 34–55.CrossRefGoogle Scholar
and (2003). Benefit transfer. In , , and (eds), A Primer on Non-market Valuation. Dordrecht, the Netherlands: Kluwer, pp. 445–482.CrossRefGoogle Scholar
and (2001). Valuing mangrove conservation in Southern Thailand. Contemporary Economic Policy, 19: 109–122.CrossRefGoogle Scholar
and (2004). The Economic Values of the World’s Wetlands. Amsterdam, the Netherlands: World Wildlife Foundation.Google Scholar
and (1993). Hedonic models and air pollution: twenty-five years and counting. Environmental and Resource Economics, 3: 381–394.CrossRefGoogle Scholar
and (1995). Can markets value air quality? A meta-analysis of hedonic property value models. Journal of Political Economy, 103: 209–227.CrossRefGoogle Scholar
, , , , and (2000). Comparison of contingent valuation and conjoint analysis in ecosystem management. Ecological Economics, 32: 63–74.CrossRefGoogle Scholar
, , , et al. (2007). The economic value of Guam’s coral reefs. University of Guam Marine Laboratory Technical Report 116, 102 pp.
, , and (2001). Assessing the accuracy of benefits transfers: evidence from a multi-site contingent valuation study of ground water quality. In , , and (eds), The Economic Value of Water Quality. Cheltenham, UK: Edward Elgar, Chapter 6.Google Scholar
, , and (2007). Valuing water quality improvements in the United States using meta-analysis: is the glass half-full of half-empty for national policy analysis?Resource and Energy Economics, 29: 206–228.CrossRefGoogle Scholar
and (2001). The economic value of wetland services: a meta-analysis. Ecological Economics, 37: 257–270.CrossRefGoogle Scholar
, , , , and (2014). The valuation of off-site ecosystem service flows: deforestation, erosion and the amenity value of lakes in Prescott, Arizona. Ecological Economics, 97: 74–83.CrossRefGoogle Scholar
- 12
- Cited by