- Techniques To Value Environmental Resources An Introductory Handbook Pdf
- Techniques To Value Environmental Resources An Introductory Handbook Free
ADVERTISEMENTS:The following methods are used for environmental valuation: (A) Expressed Preference Methods:The demand for environmental goods can be measured by examining individuals’ expressed preference for these goods relative to their demand for other goods and services. These techniques avoid the need to find a complementary good (travel or house), or a substitute good (compensating wage rate), to derive a demand curve and hence estimate how much an individual implicitly values an environmental good. Moreover, expressed preference techniques ask individuals explicitly how much they value an environmental good. Contingent Valuation Method (CVM):Analytic survey techniques rely on hypothetical situations to place a monetary value on goods or services. Most survey-based techniques are examples of contingent valuation method. Contingent valuation frequently elicits information on willingness to pay or willingness to accept compensation for an increase or decrease in some usually non-marketed goods or services. ADVERTISEMENTS:This method puts direct questions to individuals to determine how much they might be willing to pay for environmental resources or how much compensation they would be willing to accept if they were deprived of the same resources.
This method is more effective when the respondents are familiar with the environmental good or service and have adequate information on which to base their preferences. We will discuss trade-off game method, costless-choice method, and Delphi method as part of contingent valuation approach.(1) Trade-Off Game Method:This method relates to a set of contingent valuation techniques that rely on the creation of a hypothetical market for some good or service.
Techniques To Value Environmental Resources An Introductory Handbook Pdf
In a single bid game the respondents are asked to give a single bid equal to their willingness to pay or willingness to accept compensation for the environmental good or service described. In an iterative (repeating) bid game the respondents are given a variety of bids to determine at what price they are indifferent between receiving (or paying) the bid or receiving (or losing) the environmental good at issue.The trade-off game method is a variant of the bidding game wherein respondents are asked to choose between two different bundles of goods. Each bundle might, for example, include a different sum of money plus varying levels of an environmental resource. The choice indicates a person’s willingness to trade money for an increased level of an environmental good. When no money is involved, the approach becomes similar to the costless-choice method. ADVERTISEMENTS:(2) Costless-Choice Method:The costless-choice method is a contingent valuation technique whereby people are asked to choose between several hypothetical bundles of goods to determine their implicit valuation of an environmental good or service.
Since no monetary figures are involved, this approach may be more useful in settings where barter and subsistence production are common.(3) Delphi Method:The Delphi method is a variant of the survey-based techniques wherein experts, rather than consumers, are interviewed. These experts place values on a good or service through an iterative process with feedback among the group between each iteration. This expert-base approach may be useful when valuing very esoteric resources. ADVERTISEMENTS:This is really a specialized survey technique designed to overcome the speculative and isolated nature of expert opinions. A sufficiently large sample of experts is presented individually with a list of events on which to attach probabilities and to which other events, with probabilities may be added. Some recent Delphi exercises have been recreation-specific. But testing the accuracy of their forecasts is not yet possible, especially since the predictions are only meant to be general perspectives.
(B) The Revealed Preference Methods:The demand for environmental goods can be revealed by examining the purchases of related goods in the private market place. There may be complementary goods or other factor inputs in the household’s production function. There are a number of revealed preference methods such as travel- cost method, hedonic price method and property value method. (1) Travel-Cost Method:The travel-cost method is a widely used surrogate market approach that relies on information on time and travel costs to derive a demand curve for a recreational site. This curve is in turn used to estimate the consumers’ surplus or value of the site to all users. This approach is widely used to value the recreational benefits of public parks and other natural areas.This method seeks to determine the demand for a recreational site (i.e.
Number of visits per year to a park) as a function of variables like price, visitors’ income, and socio-economic characteristics. The price is usually the sum of entry fees to the site, cost of travel, and opportunity cost of time spent. The consumers’ surplus associated with the demand curve provides an estimate of the value of the recreational site in question. ADVERTISEMENTS:The most common forecasting technique for a specific site is the Clawson- Knetsch-Hotelling method. It is a technique commonly associated with benefit estimation in recreation cost-benefit analysis. This method uses information on travel costs to generate a final demand curve for a recreation outlet.
Hence it is most appropriate for those outlets where travel cost is a major component of total visit costs typically to free countryside outlets.According to Clawson and Knetsch, outdoor recreation activities satisfy individual needs, such as physical, social or psychological. It is necessarily a kind of package deal involving anticipation, travel to the site, the activity itself, the return travel and finally recollection.The travel-cost method is explained in Figure 50.1. Suppose there is a single lake in a city, where the entry fee is OP which is fixed per visit. Initially, recreational demand for the lake is shown by the demand curve BD o and the environmental quantity level is E 0. ADVERTISEMENTS:Pi = f S 1iS ki, N 1i.N mi, Z 1i.Z niWhere, S represents structural characteristics of the house i i.e. Type of construction, house size and number of rooms; N represents neighbourhood characteristics of house i, that is accessibility to work, crime rate, quality of schools etc.
Techniques To Value Environmental Resources An Introductory Handbook Free
It is assumed that only one environment variable affects the property value i.e. Air quality (Z).For example, if the linear relation exists, then the equation becomesP i = α 0 + α 1S 1i +. + α KS Ki + β 1N 1i +. + β mN mi + γ aZ a.