The Valuation of Environmental Goods and Services

Chapter 5 introduces the concept of value, and the methods used to obtain estimates of the value of scarce environmental goods and services—particularly the provision, cultural, and regulating ecosystem services. It discusses the concept of social opportunity cost, and shows how the concept informs our understanding of the trade-offs involved in application of the equimarginal principle. It clarifies the relation between the income and substitution effects of changes in value, compensating and equivalent variation, and the willingness to pay or willingness to accept. Valuation methods discussed include both revealed preference (travel cost, averting behavior, hedonic price, production function, replacement cost) and stated preference (contingent valuation, contingent behavior, choice modeling) approaches. The valuation of biodiversity is approached through the regulating ecosystem services, using a portfolio approach to the management of uncertainty. The chapter shows how managers may select which species to conserve so as to balance environmental risk and the benefits from ecosystems.

• Publication year

  2021

• Venue

  Unknown venue

• Publication date

  2021-07-15

• Fields of study

  Business, Economics, Environmental Science

• Identifiers
  DOI 10.1093/OSO/9780190613600.003.0005
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

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• No concepts are published for this paper.

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