2.3 Valuing the environment Flashcards
(20 cards)
use value (UV)
from action and/or planned use of services by an individual
ex. recreation
existance value (EV)
Knowledge that the services exists and will continu to exist independent of any actual or prospective use
Option value (OV)
Willingness to pay to guarantee the availability of the surface for future use
ex. future recreation
Quasi-option value (QOV)
Willingness to pay to avoid an irreversible commitment to development now.
Given expectation to future growth in knowledge relevant to the implications
ex. delaying development of a piece of land
Total value (TV
UV + NUV
= UV + EV + OV + QOV
Travel cost method (TCM)
Valuing recreational benefits of environmental resources
- indirect method
- complementarity
- E is non essential
individual, zonal & pooling
Hedonic pricing method (HP)
Focus on characteristics of a good
The ES are identified as characteristics which partly describe a marketed good
ex. housing prices:
- noise levels airports, roads
- earthquake risk
- urban air quality changes
- landscape values of woodland
Relationship between environmental quality and prices of the marketed good
- indirect method
Contingent valuation (CVM)
stated preference method; explicit state how much they value a specific service
- surveys
- direct approach
- use and non-use values
- value of utility change
contingent: value is dependent on the hypothetical scenario presented
Choice modelling (CM)
Respondents are confronted a set of alternatives for an environmental good (choice set) + identifying most preferred choice
- environmental good project is described by attributes (one of the attributes is a monetary attribute)
- stated preference method
- survey-based technique
- evalutat multidimensional choices
Indirect method
Interfering monetary value of exchange in E from market data on commodity C
based on observations of behavior
complementarity
A person receives utility from the attributes of a site only by visiting the site
zonal TCM
Region is divided into different zones and the travel cost is determined in each zone
- needs less information
individual TCM
Data is collected on individual use of recreational site
- precise locations is determined
- control for socio-economic determinants (age, income, gender)
- substitute sites taken into account, but not multipurpose trips
Pooled TCM
Used to estimate changes in site quality
- travel cost from different sites combined; with different qualities
- higher quality: shift outwards; more visits
random utility theory (RUT)
Utility function rising from “yes” or “no” response (x) to a CV question is compromised of a deterministic, observable component (Vi) and a random unobservable component (e, error term)
Ui = Vi + e
avoided cost method
The cost relates to that that would have been incurred in the absence of the ES
ex. wetlands value based on the flood damages that are avoided
replacement cost method
Estimation of the costs that incurred by replacing an ES with artificial technologies
es. wetlands value based on the cost for human made flood defense system
restoration cost method
The cost of getting ES restored
ex. grassland instead of feed
double counting
Counting the value of an ES twice
Benefit transfer
The process of taking evidence of the value of benefits or damages from the study site and transferring this to the other context policy site
- study and policy site need to be similar
- we assume constant value/ha
- cheaper and easier to perform
