Research and Environment
John Loomis, Guest Editor
Economic Values without Prices: The Importance of Nonmarket Values and Valuation for Informing Public Policy Debates
Including nonmarket values of changes in food safety or environmental quality provides a more complete picture of benefits and costs to decision makers. Economists have developed a wide variety of tools for valuation of nonmarket values and they are seeing increasing application by state and federal agencies.
The Road Less Traveled: Revealed Preference and Using the Travel Cost Model to Value Environmental Changes
W. Douglass Shaw
One can measure the value people place on an environmental good by looking at how much they spend to get there. The travel cost method examines actual expenditures to estimate the value of environmental changes. The paper explains how this is done, and highlights issues that arise when comparing the travel cost to other nonmarket valuation methods.
Another method for obtaining nonmarket valuation estimates is to ask people for their preferences through a questionnaire or interview. Stated preference methods have been widely used to provide estimates of total economic values for a wide variety of nonmarketed environmental effects and natural resources. Since stated preference methods do not require observations of past behavior, they allow valuation of potential policies that are quite different than policies that exist today.
Richard Ready and Ståle Navrud
Nonmarket valuation studies can be demanding of resources, time, and expertise. Thus, the question has arisen as to when the results of one study in one place can be transferred to another place. This has become called benefits transfer and is widely used by federal agencies, because it is faster and cheaper than conducting original valuation research. Although the potential for transfer error exists, a well-conducted benefit transfer based on a high-quality existing study is preferable to a new, poorly funded, rushed original valuation study.
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