A Primer on Nonmarket Valuation

508 Pages·2017·5.899 MB·English

by  Patricia A. Champ, Kevin J. Boyle, Thomas C. Brown (eds.)

The Economics of Non-Market Goods and Resources
Patricia A. Champ
Kevin J. Boyle
Thomas C. Brown E ditors
A Primer on
Nonmarket
Valuation
Second Edition
The Economics of Non-Market Goods
and Resources
Volume 13
Series editor
I.J. Bateman, School of Environmental Sciences, University of East Anglia,
Norwich, UK
More information about this series at http://www.springer.com/series/5919
Patricia A. Champ Kevin J. Boyle
(cid:129)
Thomas C. Brown
Editors
A Primer on Nonmarket
Valuation
Second Edition
123
Editors
Patricia A.Champ ThomasC. Brown
U.S. Forest Service, RockyMountain U.S. Forest Service, RockyMountain
ResearchStation ResearchStation
Fort Collins, CO Fort Collins, CO
USA USA
KevinJ. Boyle
Virginia Tech
Blacksburg, VA
USA
ISSN 1571-487X
TheEconomics of Non-Market GoodsandResources
ISBN978-94-007-7103-1 ISBN978-94-007-7104-8 (eBook)
DOI 10.1007/978-94-007-7104-8
LibraryofCongressControlNumber:2016958973
©SpringerScience+BusinessMediaB.V.(outsidetheUSA)2003,2017
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Contents
1 Valuing Environmental Goods and Services: An Economic
Perspective.... .... .... ..... .... .... .... .... .... ..... .... 1
Kathleen Segerson
2 Conceptual Framework for Nonmarket Valuation. .... ..... .... 27
Nicholas E. Flores
3 Collecting Nonmarket Valuation Data... .... .... .... ..... .... 55
Patricia A. Champ
4 Contingent Valuation in Practice... .... .... .... .... ..... .... 83
Kevin J. Boyle
5 Choice Experiments .... ..... .... .... .... .... .... ..... .... 133
Thomas P. Holmes, Wiktor L. Adamowicz and Fredrik Carlsson
6 Travel Cost Models. .... ..... .... .... .... .... .... ..... .... 187
George R. Parsons
7 Hedonics . .... .... .... ..... .... .... .... .... .... ..... .... 235
Laura O. Taylor
8 Averting Behavior Methods ... .... .... .... .... .... ..... .... 293
Mark Dickie
9 Substitution Methods ... ..... .... .... .... .... .... ..... .... 347
Thomas C. Brown
10 Experimental Methods in Valuation .... .... .... .... ..... .... 391
Craig E. Landry
v
vi Contents
11 Benefit Transfer ... .... ..... .... .... .... .... .... ..... .... 431
Randall S. Rosenberger and John B. Loomis
12 Reliability and Validity in Nonmarket Valuation .. .... ..... .... 463
Richard C. Bishop and Kevin J. Boyle
Index .... .... .... .... .... ..... .... .... .... .... .... ..... .... 499
Contributors
Wiktor L. Adamowicz University of Alberta, Edmonton, AB, Canada
Richard C. Bishop University of Wisconsin-Madison, Madison, WI, USA
Kevin J. Boyle Virginia Tech, Blacksburg, VA, USA
Thomas C. Brown U.S. Forest Service, Rocky Mountain Research Station, Fort
Collins, CO, USA
Fredrik Carlsson University of Gothenburg, Gothenburg, Sweden
Patricia A. Champ U.S. Forest Service, Rocky Mountain Research Station, Fort
Collins, CO, USA
Mark Dickie University of Central Florida, Orlando, FL, USA
Nicholas E. Flores University of Colorado-Boulder, Boulder, CO, USA
Thomas P. Holmes U.S. Forest Service, Southern Research Station, Research
Triangle Park, NC, USA
Craig E. Landry University of Georgia, Athens, GA, USA
John B. Loomis Colorado State University, Fort Collins, CO, USA
George R. Parsons University of Delaware, Newark, DE, USA
Randall S. Rosenberger Oregon State University, Corvallis, OR, USA
Kathleen Segerson University of Connecticut, Storrs, CT, USA
Laura O. Taylor North Carolina State University, Raleigh, NC, USA
vii
Acronyms
CE/CEs Choice experiment(s)
EA Equivalency analysis
GIS Geographical information system
i.i.d. Independent and identically distributed
RUM Random utility model
TCM Travel-cost model
VSL Value of statistical life
WTA Willingness to accept
WTP Willingness to pay
Use only in Equations
ACS American community survey
MLS Multiple listing service
NB Net benefits
PIN Parcel identification number
RDC Research data center
TC Transaction costs
ix
Chapter 1
Valuing Environmental Goods
and Services: An Economic Perspective
Kathleen Segerson
Abstract Nonmarketvaluation,i.e.,valuingenvironmentalgoodsandservicesthat
are not traded in a market, has been increasingly used in a variety of policy and
decision-making contexts. This is one (but not the only) way that researchers and
practitionershavesoughttodefineandmeasurethevaluesthatindividualsassignto
environmental goodsandservices. Theidea ofputting adollar value onprotecting
the environment has been controversial, but often because the economic approach
to valuation has not been well-understood. This chapter provides a nontechnical
overview of and rationale for the economic approach to valuation, starting from a
broad conceptualization of values versus valuation. It summarizes the economic
concept of value and its key features. It then discusses the use of economic valu-
ation in decision making, followed by an overview of the steps involved in the
valuation process and important issues that arise in implementing that process.
Finally, it identifies and briefly summarizes the principal non-market valuation
methods used by economists. In doing so, it sets the stage for the more detailed
chapters on theory and methods that follow.
(cid:1) (cid:1) (cid:1) (cid:1)
Keywords Preferences Market failure Externalities Ecosystem services
(cid:1) (cid:1)
Held versus assigned values Substitutability Economic versus commercial
(cid:1) (cid:1) (cid:1) (cid:1)
values Economic impacts versus values Valuation process Aggregation
(cid:1) (cid:1)
Discounting Uncertainty Valuation methods
1.1 Making Choices
AsJean-PaulSartreputit,“weareourchoices.”Choiceisafundamentalpartofour
lives.Weareconstantlymakingchoices,oftenindividuallyoramongfriendsbutalso
collectively. Some individual choices are routine (e.g., about how to spend our
income or time on a given day), but others involve major decisions (e.g., about
K.Segerson(&)
UniversityofConnecticut,Storrs,CT,USA
e-mail:[email protected]
©SpringerScience+BusinessMediaB.V.(outsidetheUSA)2017 1
P.A.Champetal.(eds.),APrimeronNonmarketValuation,
TheEconomicsofNon-MarketGoodsandResources13,
DOI10.1007/978-94-007-7104-8_1