The rift between Gifford Pinchot and John Muir, between the conservationist and preservationist movements, left an unsatisfactory state of affairs for economists working on early environmental policy questions. Moreover, midway through the 20th Century, economics was still defined as the study of material welfare. An interdiciplinary social scientist like Aldo Leopold concluded that economics thus could have little to say about the value of preserved landscapes or species. Yet economics was relevant for preservation because incentives mattered. He advocated a new interdiciplinary ecological economics to overcome these problems. Meanwhile, economists in government were beginning to confront environmental questions, such as the value of outdoor recreation, in their benefit-cost analyses of dams and other water projects. They too concluded such questions were outside their field and could not be addressed. Thus, at mid-century, the future existence of a field called environmental economics was very much in doubt.

Benefit-cost practitioners in the mid twentieth century, forced by government agencies to value outdoor recreation, continued to struggle with how to do so. One outside expert, Harold Hotelling, recommended what became known as the travel cost model. This approach measures the demand for recreation based on how much people are willing to pay for a trip in terms of travel costs. It also measures the value of a trip in terms of consumer surplus, or the additional value recreationists have above the travel costs they pay. Although the method eventually became stardardized, it initially was received with skepticism and confusion. Consumer surplus was an archaic, theoretical construct with little grounding in realty. This chapter discusses how economists like Marion Clawson and Jack Knetsch overcame their skepticism.