valuing option existence and bequest demands for wilderness to assess the relative importance of current costs and future benefits of nuclear waste storage we develop a simple model of bequest value the basic model of nonparternalistic altruism is extended to account for the uncertain nature of the externality

source diversification and import price risk in this article i present a theoretical framework and derive an empirical model that relates import price risk to the allocation of an import across exporting sources source diversification a differential approach to expected utility theory and firm demand is used to derive a model comparable to more popular demand systems such as the rotterdam and aids models the model is used in estimating carnation demand in the united kingdom results show that while total carnation imports expected prices and seasonality are important determinants of import demand by source there is significant information loss when price risk is not considered copyright 2012 oxford university press

a test of the equality of closed ended and open ended contingent valuations a test is developed to find whether open ended and closed ended contingent valuation mechanisms lead to significantly different results the test is based on joint estimation of willingness to pay responses to open and closed ended questions asked of the same sample of individuals in a public good example individuals do respond differently depending on question format possible explanations include different incentives for strategic behavior and respondents lack of familiarity with the open ended question type no differences in willingness to pay were found in a private good example

ecological economic analysis of wetlands scientific integration for management and policy abstract wetlands all over the world have been lost or are threatened in spite of various international agreements and national policies this is caused by 1 the public nature of many wetlands products and services 2 user externalities imposed on other stakeholders and 3 policy intervention failures that are due to a lack of consistency among government policies in different areas economics environment nature protection physical planning etc all three causes are related to information failures which in turn can be linked to the complexity and invisibility of spatial relationships among groundwater surface water and wetland vegetation integrated wetland research combining social and natural sciences can help in part to solve the information failure to achieve the required consistency across various government policies an integrated wetland research framework suggests that a combination of economic valuation integrated modelling stakeholder analysis and multi criteria evaluation can provide complementary insights into sustainable and welfare optimising wetland management and policy subsequently each of the various components of such integrated wetland research is reviewed and related to wetland management policy

exploring futures for amazonia s sierra del divisor an environmental valuation triadics approach to analyzing ecological economic decision choices in the context of major shifts in boundary conditions abstract this text presents a new methodological approach to ecological economic analysis employing georgescu roegen s flow fund theory of economic process it offers an alternative to monetary valuation based analyses and aims to contribute toward advancing work concerned with addressing complex ecological economic questions as complete wholes the methodology is demonstrated through reference to the empirical case of a proposed rail link between peru and brazil which would cut across the sierra del divisor of western amazonia connecting the pacific and atlantic coasts and further opening up the amazon commodity frontier in order to analyze the potential impacts of the rail link four flow fund representations of economic process two at the regional and two at the local level are developed in order to juxtapose two alternative political economy contexts that might govern the rail link s impacts in the region one where conservation is prioritized over cash income and one where it is not our results suggest that completion of the rail link under the current political economy context which prioritizes cash income over conservation is likely to have substantial negative consequences for forest conservation in both peru and brazil and for local livelihoods throughout the region

substitution effects in the valuation of multiple environmental programs abstract a theoretical framework for understanding substitution and complementary effects between environmental programs is derived a multiple program valuation function is specified and its structure analyzed a maximum likelihood estimator is derived to estimate the parameters of the valuation function using referendum type contingent valuation data the empirical analysis shows that the conventional benefit aggregation approach of independent valuation and summation overstates the benefits of two and three program policies by an average of 24 and 54 respectively

influence of soil conservation on farm land values worldwide concern for the loss of agricultural soil has led many governments to establish programs to slow the loss of soil from farms mcconnell 1983 has shown however that in the absence of externalities farmer decisions on investment to reduce onfarm soil loss can be socially optimal and concludes p 188 as follows increasing soil loss does not imply that farmers ignore physical production relations if farmers know that the soil base affects farm resale value they will conserve it it suggests that the impact of soil depth on the value of farms be investigated earlier rausser 1980 reached a similar conclusion suggesting that land values which fail to reflect soil quality encourage the farmer to ignore his long run impact on the resource two recent studies failed to find clear cut relationships between soil erosion and farm land prices ervin and mill 1985 942 in a cross section study of farm land prices in page county iowa concluded the group of variables measuring past and future erosion damages and conservation structures did not exhibit large and reliable effects gardner and barrows 1985 studied the capitalization of the value of soil conservation practices into farm land prices in southwestern wisconsin and concluded p 946 the most reasonable conclusion is the most obvious conservation

threshold effects and incentives for the conservation of biodiversity biological diversity is a central component of the stock of natural capital on which all economic development is based other things being equal loss of biologically diversity implies loss of development potential and its conservation through sustainable use or outright protection implies the protection of that potential one characteristics of biodiversity loss of especial importance is that biodiversity loss more than any other current environmental problem is associated with ecological threshold effects the paper explores the implication of this characteristics for the properties of a biodiversity conservation strategy

economic valuation of biodiversity sense or nonsense this paper critically evaluates the notion and application of economic monetary valuation of biological diversity or biodiversity for this purpose four levels of diversity are considered genes species ecosystems and functions different perspectives on biodiversity value can be characterized through a number of factors instrumental vs intrinsic values local vs global diversity life diversity vs biological resources etc a classification of biodiversity values is offered based on a system of logical relationships among biodiversity ecosystems species and human welfare suggestions are made about which economic valuation methods can address which type of biodiversity value the resulting framework is the starting point for a survey and evaluation of empirical studies at each of the four levels of diversity the contingent valuation method is by far the most used method an important reason is that the other valuation methods are unable to identify and measure passive or nonuse values of biodiversity at first sight the resulting monetary value estimates seem to give unequivocal support to the belief that biodiversity has a significant positive social value nevertheless most studies lack a uniform clear perspective on biodiversity as a distinct concept from biological resources in fact the empirical literature fails to apply economic valuation to the entire range of biodiversity benefits therefore available economic valuation estimates should generally be regarded as providing a very incomplete perspective on and at best lower bounds to the unknown value of biodiversity changes 2001 elsevier science b v all rights reserved

the economic benefits of surface water quality improvements in developing countries a case study of davao philippines two nonmarket valuation techniques the contingent valuation method and travel cost model are used to estimate the economic value that people in davao philippines place on improving the water quality of the rivers and sea near their community the contingent valuation and travel cost estimates are very close to each other and are quite low both in absolute terms and as a percentage of household income these findings suggest that water pollution control is simply not a high priority for davao s residents and support the argument that households willingness to pay for environmental amenities such as improved water quality is low

economic valuation of the leuser national park on sumatra indonesia abstract the leuser ecosystem in northern sumatra is officially protected by its status as an indonesian national park nevertheless it remains under severe threat of deforestation rainforest destruction has already caused a decline in ecological functions and services besides it is affecting numerous economic activities in and around the leuser national park the objectives of this study are twofold firstly to determine the total economic value tev of the leuser ecosystem through a systems dynamic model and secondly to evaluate the economic consequences of deforestation versus conservation disaggregating the economic value for the main stakeholders and regions involved using a dynamic simulation model economic valuation is applied to evaluate the tev of the leuser national park over the period 2000 2030 three scenarios are considered conservation deforestation and selective use the results are presented in terms of 1 the type of benefits 2 the allocation of these benefits among stakeholders and 3 the regional distribution of benefits the economic benefits considered include water supply fisheries flood and drought prevention agriculture and plantations hydro electricity tourism biodiversity carbon sequestration fire prevention non timber forest products and timber the stakeholders include local community members the local government the logging and plantation industry the national government and the international community the regions considered cover the 11 districts involved in the management of the leuser ecosystem with a 4 discount rate the accumulated tev for the ecosystem over the 30 year period is us 7 0 billion under the deforestation scenario us 9 5 billion under the conservation scenario and us 9 1 billion under the selective utilisation scenario the main contributors in the conservation and selective use scenarios are water supply flood prevention tourism and agriculture timber revenues play an important role in the deforestation scenario compared to deforestation conservation of the leuser ecosystem benefits all categories of stakeholders except for the elite logging and plantation industry

construct validity of averting cost measures of environmental benefits construct validity is concerned with the consistency of empirical measures with theoretical relationships this paper reviews and extends the theoretical relationship between averting costs and willingness to pay measures of these two theoretical constructs with empirical averting costs savings and contingent valuation from one population are used to establish construct validity of the averting cost technique used empirical results indicate that the contingent valuation and averting costs measures have a low correlation although low correlation is consistent with the construct validity of averting costs measures these results indicate that inferences from averting cost measures are quite limited

use of dichotomous choice nonmarket methods to value the whooping crane resource market prices for endangered wildlife species rarely exist when prices do exist they arc not likely to reflect accurately individual preferences both consumptive uses such as hunting fishing and trapping boyle and bishop 1985 stou and johnson brookshire eubanks and randall and more esoteric benefits such as viewing and existence values must be considered this article is addressed to the valuation of whooping cranes grus americana a prominent endangered species the purpose of this article is to present a methodology for estimating nonconsumptive benefits associated with the existence of an endangered species a dichotomous choice form of contingent valuation is applied to quantify individuals economic surplus associated with preservation of the whooping crane resource specific issues and limitations of the empirical approach are discussed some of which have been previously examined by bishop and heberlein 1979 and hanemann the present paper expands upon earlier work in several ways fit in addition to discussing the above issues a unique application of the approach to an endangered species is presented second three model specifications are examined two of which arc consistent with utility theory and one which is not hanemann ti again following hanemann economic surplus is estimated at the sample median as well as the mean the dii cussion of the last two issues sheds sit on their implications for estimation of economic surplus throughout the article the suitability of alternative estimation techniques for dichom mous choice or referendum style data is examined the methodological and empirical results are relevant to a number of cumnt issues regarding model specification choice of binary response model and choice of estimator for equivalent surplus hanemann boyle and bishop 1984 sellar chavas and stoll

valuing biodiversity for use in pharmaceutical research biodiversity prospecting has been touted as a mechanism for both discovering new pharmaceutical products and saving endangered ecosystems it is unclear what values may arise from such activities however evidence from transactions is incomplete and existing theoretical models are flawed we calculate an upper bound on the value of the marginal species even under favorable assumptions this bound is modest slightly modified assumptions lead to drastically lower estimates we extend our findings to the value of the marginal hectare of habitat and find that the incentives for habitat conservation generated by private pharmaceutical research are also at best very modest

monetary valuation in life cycle assessment a review abstract monetary valuation is the practice of converting measures of social and biophysical impacts into monetary units and is used to determine the economic value of non market goods i e goods for which no market exists it is applied in cost benefit analysis to enable the cross comparison between different impacts and or with other economic costs and benefits for this reason monetary valuation has a great potential to be applied also in life cycle assessment lca especially in the weighting phase however several challenges limit its diffusion in the field which resulted in only a few applications so far the authors have performed a review of different monetary valuation methods for use in lca firstly monetary valuation approaches methods and lca applications were identified secondly key features and the strengths and weaknesses of each monetary valuation method were determined finally monetary valuation methods and lca applications were evaluated according to a comprehensive set of criteria ranging from scientific foundation to uncertainty and complexity it was found that observed and revealed preference methods and the abatement cost method have limited applicability in lca whereas the choice experiment method and the budget constraint method are the best options for monetary valuation in lca

ecotourism demand and differential pricing of national park access in costa rica ecotourism presents developing countries with growing opportunities for enhancing resource conservation and economic growth but also raises pressing management and policy challenges this paper presents a conceptual framework and empirical analysis of the impacts of introducing a differential entrance fee policy at three national parks in costa rica data are collected using a contingent behavior methodology designed to elicit information on foreign tourists hypothetical park visitation behaviors at alternative entrance fee levels park visitation demand functions and price and income elasticities are estimated revenue maximizing fees are calculated and applications of differential pricing principles to park management are discussed

the value of biodiversity markets society and ecosystems the value of biodiversity is discussed at different levels including market value non market values to humans and the value of biodi versity to ecosystems the main conclusion is that although market exchange values of environmental services may be used to justify biodiversity protec tion measures it must be stressed that exchange value constitutes a small portion of total biodiver sity value the total value of existing biodiversity is largely unknown but indications are that it is essen tial to human existence the various levels of biodi versity value point to the need for a hierarchical and pluralistic methodology to determine appropri ate policies for its preservation jel q21 i introduction among ecologists there is a general con sensus that biodiversity1 is of critical impor tance to the health of ecosystems and even for the long term survival of the human species there is also a consensus that bio diversity is being lost at a rate which is a cause for concern 2 economists on the other hand generally view biodiversity as just an other good which is to be placed in the basket of market choices just as any other the discussion of the specifics of biodiver sity policy has been unsatisfactory partly because of the different meanings of the word value used by economists and ecolo gists many ecologists fail to understand the logic of market allocation and why biologi cal resources are used in seemingly irra tional ways many economists fail to ap preciate the narrowness of the concept of economic value as indicated by relative prices determined by market exchange fol lowing anderson 1966 and brown 1984 the discussion below considers economic measures of value to be species of the genus assigned value which belongs to the family value many biologists and paleontologists be lieve that we are at a critical point in the history of the human species and perhaps even in the 600 million year history of com plex multicelled life on earth if the paleon tologists and biologists who study the phe nomenon of mass extinction are correct the current human induced mass extinction may be of the same order of magnitude as the five other major extinction episodes which destroyed between 20 and 96 percent of existing species on the planet ehrlich and ehrlich 1992 ward 1994 wilson 1992 we are living in a truly remarkable period in earth s 41 billion year history the valua tion decisions our species has made in the recent past and will make during the next few decades will determine the fate of life on earth for the next tens of millions of years it is critical to clarify the language and concepts we use to estimate the value of biodiversity and thus policies leading to its destruction or preservation the importance attached to the issue of biodiversity preservation necessarily in volves ethical judgments about duty to fu ture generations and responsibility toward the nonhuman natural world although in dividuals hold a variety of conflicting beliefs about human responsibility to the natural world this does not mean that policy choices

capturing the complexity of biodiversity a critical review of economic valuation studies of biological diversity biodiversity is a highly complex and abstract ecological concept even though it is not one physical entity it influences human well being in multiple ways mostly indirectly while considerable research effort has been spent on the economic valuation of biodiversity it remains to be a particularly challenging valuation object valuation practitioners therefore have to use proxies for biodiversity many of which are very simple single species habitats this paper presents a comprehensive and critical review of biodiversity valuation studies with special emphasis on biodiversity valuation in order to depict the state of the art in this research field it develops evaluation criteria so as to identify best practice applications and shows that the field of biodiversity valuation studies is rather heterogeneous regarding both valuation objects and valuation methods on the basis of our evaluation criteria and best practice studies we suggest that to account for the complexity and abstractness of biodiversity multi attribute approaches with encompassing information provision should be used that emphasise the roles biodiversity plays for human well being

the effect of technical progress on erosion damage and economic incentives for soil conservation tion service scs was established by congress in response to the alarm generated by the high erosion rates observed during the dust bowl days through technical assistance provided by scs and through cost share payments made by the agricultural conservation and stabilization service farmers have been encouraged to adopt conservation practices designed to reduce soil loss from agricultural lands but after more than 40 years of effort soil loss rates remain excessive on 97 million acres usda 1980 6 the long term productive potential of these lands is being impaired by excessive erosion in this paper a damage function which incorporates the long run cost of erosion to a farmer is presented and applied to evaluate conservation tillage in the palouse wheatland of the pacific northwest the role of technology in the conservation adoption decision is explored to see if policy implications for the control of erosion in the region can be drawn from the analysis as erosion proceeds its cumulative effect is evident in reduced crop yield of the numerous factors that affect crop yields many are related to erosion damage soil moisture organic matter content fertility and soil structure are examples the depth of topsoil remaining is used as a proxy in this analysis for various variables related to erosion which impact crop yields although cumulative soil erosion may diminish the future productivity of soil apparently some operators continue to mine soil by using erosive farming practices which offer higher yields currently some practices for reducing soil erosion may impose a double penalty on farmers in the form of lower yields and higher costs currently these detriments to short run profits may discourage farmers from adopting methods of soil conservation however farm operators who ignore the long term effects of erosion may be mortgaging the future in their pursuit of current profits

valuing environmental functions tropical wetlands recent studies have suggested that tropical wetland systems may have a crucial economic role to play in development the following paper provides an overview of these benefits using the general framework of cost benefit analysis as the methodological approach to assessing wetland values an analysis of trade offs between conserving or converting tropical wetlands demonstrates that taking into account the opportunity cost of wetland loss leads to a lower level of conversion than would otherwise be the case finally the paper discusses the extensions and limitations of the production function approach as applied to valuing nonmarketed wetland benefits

traditional vs modern production systems price and nonmarket considerations of cacao producers in northern ecuador many factors besides profit maximization such as nonmarket ecological and social benefits influence smallholder households to adopt a specific agricultural production system or sell in a particular market thus different analytical techniques are needed that take into consideration more than monetary income to fully capture these additional benefits to better understand the production decisions of smallholder farmers we build on previous work on the household model and shadow wage estimation to develop a shadow wage for ecuadorian cacao producers that includes these nonmarket benefits we found that the shadow wage correctly indicated that on average these households would prefer to use an agroforestry production system instead of the more profitable modern system because of the nonmarket benefits received from the former system

economic valuation of biodiversity a comparative study abstract in recent years an intensive debate on the economic valuation of biodiversity has entered the environmental economics literature the present paper seeks to offer first a critical review of key concepts that are essential for a proper understanding of such evaluation issues particular attention is given here to various monetary valuation approaches and to comparative i e meta analytical methods from the perspective of conservation and sustainable use of biodiversity several illustrative examples are presented in order to highlight the usefulness of the various approaches discussed next an attempt is made to infer general findings and lessons from past applied research by means of meta analysis in this context a multi dimensional technique originating from the field of artificial intelligence is deployed it allows us to identify the most important variables responsible for changes in economic estimates of biodiversity

how far for a buck tax differences and the location of retail gasoline activity in southeast chicagoland abstract we exploit variation in gasoline and cigarettes taxes in adjacent political jurisdictions for northern illinois and indiana to examine consumers trade off between prices and travel we develop a model that relates activity in the retail gasoline industry around the tax borders to consumer locations our results indicate that the willingness of a typical chicagoland consumer to travel an additional mile to buy gasoline corresponds to about 0 065 to 0 084 per gallon according to our estimates the observed area of chicago the jurisdiction with the highest taxes is missing approximately 40 of the capacity that would exist were taxes equalized

an evaluation of monetary and non monetary techniques for assessing the importance of biodiversity and ecosystem services to people in countries with developing economies abstract biodiversity supports a range of ecosystems services that are of fundamental importance to people in poor countries economic valuation of biodiversity is important for the development of policies that protect biodiversity and alleviate poverty this paper provides an evaluation of monetary and non monetary techniques for assessing the value of biodiversity to people in least developed countries ldcs specifically research questions include 1 to what extent have monetary and non monetary techniques been used to assess the value of biodiversity and ecosystem services in ldcs 2 what are the key methodological practical epistemological and policy challenges to assessing the value of biodiversity and ecosystem services in ldcs 3 how can valuation methods be improved to allow more accurate valuation in ldcs

the market value of water in the ogallala aquifer the ogallala aquifer also known as the ogallala formation or the high plains aquifer is a 174 000 square mile body of water that underlies parts of colorado kansas nebraska new mexico oklahoma south dakota texas and wyoming the ogallala contains about 3 5 billion acre feet of water symposium ii 1984 but in many areas the aquifer has been declining from continued deep well pumping sloggett and dickason 1986 the aquifer receives little recharge especially in the southern portion and as such represents a finite nonrenewable resource stock as a result of the concerns of residents of the high plains states over declines in the ogallala aquifer congress authorized the secretary of commerce to conduct a six state regional resources study of the ogallala in 1976 high plains associates 1982 the study indicated even under the most effective water conservation program more than a million acres of farmland then

sensitivity of contingent valuation to alternative payment schedules insensitivity to payment schedule wherein respondents do not adequately differentiate between a one time payment and a series of payments may be an important but often overlooked factor in the design interpretation and use of contingent valuation studies several contingent valuation experiments involving a familiar private good and a less familiar environmental commodity indicate that although respondents distinguished between lump sum and periodic payment schedules implicit discount rates were very high suggesting that sensitivity to payment schedule is an important subject for further study

test retest reliability of the contingent valuation method a comparison of general population and visitor responses the reliability of the contingent valuation method is evaluated by resurveying the same general households and visitors nine months after their original survey test retest correlations on willingness to pay are statistically significant and ranged from 422 for the general population sample to 782 for the visitor sample using a paired t test there was no statistical difference between an individual s first and second reported willingness to pay chow tests comparing the original and resurvey willingness to pay functions showed no statistical difference at the 01 level reported willingness to pay is reasonably stable over the time period surveyed