The Statistical Basis of Valuation

Abstract

Economics is properly regarded as a behavioural science. The foundation of its analysis is what people do, not what people say they do. Thus, even if there were not good reasons for consumers to misstate the value of landscape, most economists would instinctively distrust valuations given in response to questionnaires. A theoretically more satisfactory, if practically less tractable basis for valuation is the observed reactions of consumers to landscapes within their ambit. This approach focuses on preferences, not as stated, but as revealed in willingness to pay for access to the landscape.