Abstract
Commensurate valuation of market and nonmarket public goods allows for a more valid benefit-cost analysis. Economic methods for valuing nonmarket public goods include actual behavior-based revealed preference methods, such as the hedonic property method for urban-suburban public goods and travel cost models for outdoor recreation. For valuing proposed public goods for which there is no current behavior, or valuing the existence or passive use values of public goods, economists can rely on stated preference methods. While there is skepticism among some economists for relying on what people say they will pay rather than what their actual behavior suggests they will pay, there is general acceptance of stated preference methods. These stated preference methods include the well-known contingent valuation method and choice experiments (sometimes called conjoint analysis). Lastly, in situations where there is neither time nor money to conduct an original revealed or stated preference study, economists can rely on benefit transfers from existing revealed preference and stated preference studies to provide rough estimates of the values of public goods such as water quality, air quality, wetlands, recreation, and endangered species.
Notes
- 1.
Any use of trade, firm, or product names is for descriptive purposes only and does not imply endorsement by the U.S. government.
References
Abdullah S, Markandya A, Nunes P (2011) Introduction to economic valuation methods. In: Batabyal A, Nijkamp P (eds) Research tools in natural resource and environmental economics. World Scientific, Hackensack, pp 143–188
Alberini A, Kahn J (2006) Handbook on contingent valuation. Edward Elgar, Northampton
Arrow K, Solow R, Portney P, Leamer E, Radner R, Schuman H (1993) Report of the NOAA panel on contingent valuation. Fed Reg 58(10):4602–4614
Bateman IJ, Brouwer R, Ferrini S, Schaafsma M, Barton DN, Dubgaard A, Hasler B, Hime S, Liekens I, Navrud S, De Nocker L, Ščeponavičiūtė R, Semėnienė D (2011) Making benefit transfers work—deriving and testing principles for value transfers for similar and dissimilar sites using a case study of the non-market benefits of water quality improvements across Europe. Environ Res Econ 50(3):365–387
Bergstrom JC, Loomis JB (2017) Economic valuation of river restoration: An analysis of the valuation literature and its uses in decision-making. Water Resour Econ 17:9–19
Bergstrom J, Taylor L (2006) Using meta-analysis for benefits transfer: theory and practice. Ecol Econ 60(2):351–360
Bishop RC, Boyle KJ (2017) Reliability and validity in nonmarket valuation. In: Champ P, Boyle K, Brown T (eds) A primer on nonmarket valuation, 2nd edn. Springer, Dordrecht, pp 463–497
Bishop RC, Boyle KJ, Carson RT, Chapman D et al (2017) Putting a value on injuries to natural assets: the BP oil spill. Science 356(6335):253–254
Boyle K (2017) Contingent valuation in practice. In: Champ P, Boyle K, Brown T (eds) A primer on nonmarket valuation, 2nd edn. Springer, Dordrecht, pp 83–131
Brookshire D, d’Arge R, Schulze W, Thayer M (1982) Valuing public goods: a comparison of the survey and hedonic approaches. Am Econ Rev 72(1):165–177
Carson R, Groves T (2007) Incentive and information properties of preference questions. Environ Res Econ 37:181–210
Carson R, Flores N, Martin K, Wright J (1996) Contingent valuation and revealed preference methodologies: comparing the estimates for quasi-public goods. Land Econ 72(1):113–128
Carson R, Mitchell R, Hanemann M, Kopp R, Presser S, Ruud P (2003) Contingent valuation and lost passive value: damages from the Exxon Valdez oil spill. Environ Res Econ 25(2):257–286
Champ P, Brown T, McCollum D (1997) Using donation mechanisms to value nonuse benefits 735 from public goods. J Environ Econ Manage 33(1):151–162
Cummings R, Taylor L (1999) Unbiased value estimates for environmental goods: a cheap talk design for the contingent valuation method. Am Econ Rev 89:649–665
Freeman M (2003) The measurement of environmental and resource values: theory and methods, 2nd edn. Resources for the Future Press, Washington, DC
Haab T, McConnell K (2002) Valuing environmental and natural resources: the econometrics of 743 non-market valuation. Edward Elgar, Northampton
Herriges J, Kling C (eds) (1999) Valuing recreation and the environment: revealed preference methods in theory and practice. Edward Elgar, Northampton
Holmes TP, Adamowicz WL, Carlsson F (2017) Choice experiments. In: Champ P, Boyle K, Brown T (eds) A primer on nonmarket valuation, 2nd edn. Springer, Dordrecht, pp 133–186
Huber C, Meldrum J, Richardson L (2018) Improving confidence by embracing uncertainty: a meta-analysis of US hunting values for benefit transfer. Ecosyst Serv 33:225–236
Irwin EG, Bockstael NE (2001) The problem of identifying land use spillovers: measuring the effects of open space on residential property values. Am Agric Econ 83:698–704
Johnston RJ, Thomassin PJ (2010) Willingness to pay for water quality improvements in the United States and Canada: considering possibilities for international meta-analysis and benefit transfer. Agric Res Econ Rev 39(1):114–131
Johnston RJ, Ranson MH, Besedin EY, Helm EC (2006) What determines willingness to pay per fish? A meta-analysis of recreational fishing values. Marine Res Econ 21(1):1–32
Johnston RJ, Rolfe J, Rosenberger RS, Brouwer R (eds) (2015) Benefit transfer of environmental and resource values, vol 14. Springer, New York
Johnston RJ, Besedin EY, Stapler R (2016) Enhanced geospatial validity for meta-analysis and environmental benefit transfer: an application to water quality improvements. Environ Res Econ:1–33
Kling C, Phaneuf D, Zhao J (2012) From Exxon to BP: Has some number become better than no number. J Econ Perspect 26(4):3–26
Loomis J (1996) Measuring the economic benefits of removing dams and restoring the Elwha river: results of a contingent valuation survey. Water Resour Res 32(2):441–447
Loomis J (2011) What’s to know about hypothetical bias in stated preference valuation studies. J Econ Survey 25(2):363–370
Loomis JB (2014) 2013 WAEA keynote address: strategies for overcoming hypothetical bias in stated preference surveys. J Agric Resour Econ 39:34–46
Loomis J, Yorizane S, Larson D (2000) Testing significance of multi-destination and multi-purpose trip effects in a travel cost method demand model for whale watching trips. Agric Resource Econ Rev 29(2):183–191
Louviere J, Hensher D, Swait J (2001) Stated choice methods: analysis and applications in marketing, transportation and environmental valuation. Cambridge University Press, Cambridge
Mueller J, Loomis J (2008) Spatial dependence in Hedonic property models: do different corrections result in economically significant differences in estimated implicit prices. J Agric Res Econ 33(2):212–231
Nelson J, Kennedy P (2009) The use (and abuse) of meta-analysis in environmental and natural resource economics: an assessment. Environ Res Econ 42(3):345–377
Parsons GR (2013) Travel cost methods. In: Shogren JF (ed) Encyclopedia of energy, natural resource, and environmental economics, vol 3. Elsevier, Amsterdam, pp 349–358
Parsons G (2017) Travel cost models. In: Champ P, Boyle K, Brown T (eds) A primer on nonmarket valuation, 2nd edn. Springer, Dordrecht, pp 187–233
Recreation use values database (2016) Oregon State University, College of Forestry, Corvallis. Available at: http://recvaluation.forestry.oregonstate.edu/
Richardson L, Loomis J (2009) The total economic value of threatened, endangered and rare species: an updated meta-analysis. Ecol Econ 68:1535–1548
Rolfe J, Windle J, Bennett J (2015) Benefit transfer: insights from choice experiments. In: Johnston R, Rolfe J, Rosenberger R, Brouwer R (eds) Benefit transfer of environmental and resource values: a handbook for researchers and practitioners. Springer, Dordrecht, pp 191–236
Rosenberger R (2015) Benefit transfer validity, reliability and error. In: Johnston R, Rolfe J, Rosenberger R, Brouwer R (eds) Benefit transfer of environmental and resource values: a handbook for researchers and practitioners. Springer, Dordrecht, pp 307–326
Rosenberger RS, Loomis JB (2017) Benefit transfer. In: Champ PA, Boyle KJ, Brown TC (eds) A primer on nonmarket valuation, 2nd edn. Springer, Dordrecht, pp 431–462
Rosenberger RS, White EM, Kline JD, Cvitanovich C (2017) Recreation economic values for estimating outdoor recreation economic benefits from the National Forest System. Gen Tech Rep PNW-GTR-957. Portland, US Department of Agriculture, Forest Service, Pacific Northwest Research Station, 33 p
Taylor L (2017) Hedonics. In: Champ P, Boyle K, Brown T (eds) A primer on nonmarket valuation, 2nd edn. Springer, Dordrecht, pp 235–292
U.S. District Court of Appeals (for the District of Columbia). State of Ohio vs. U.S. Department of Interior (1989) Case number 86-15755. July 14, 1989
Vossler C, Evans M (2009) Bridging the gap between the field and the lab: environmental goods, policy maker input and consequentiality. J Environ Econ Manage 58:338–345
Walsh R, Loomis J, Gillman R (1984) Valuing option, existence and bequest demands for wilderness. Land Econ 60(1):14–29
Weber MA (2015) Navigating benefit transfer for salmon improvements in the Western US. Front Mar Sci 2(74):1–17
Whitehead J, Haab T, Huang JC (2011) Preference data for environmental valuation: combining revealed and stated approaches. Routledge, New York
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 This is a U.S. Government work and not under copyright protection in the US; foreign copyright protection may apply
About this entry
Cite this entry
Loomis, J., Huber, C., Richardson, L. (2019). Methods of Environmental Valuation. In: Fischer, M., Nijkamp, P. (eds) Handbook of Regional Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36203-3_54-1
Download citation
DOI: https://doi.org/10.1007/978-3-642-36203-3_54-1
Received:
Accepted:
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-36203-3
Online ISBN: 978-3-642-36203-3
eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences