Non-market Valuation Techniques Research Articles

The values of cultural goods and cultural capital externalities: state of the art and future research prospects

AbstractCultural economics has largely looked toward environmental economics and used non-market valuation techniques such as contingent valuation to estimate the total economic value of cultural goods. These methods are well suited to the valuation of cultural heritage goods, where the benefits are mostly related to the level of supply and mainly take the form of existence and bequest values. This stands in contrast to cultural institutions such as theatres, libraries, exhibitions, and concerts, where the value is produced, when the goods are consumed. For this type of cultural goods, I suggest that cultural economics rather turn to find inspiration in the economics of education. The value of schooling can be divided into private returns and social returns (human capital externalities). Likewise, the value of cultural consumption can have a private and a public component, where I suggest labeling the public component cultural capital externalities. The idea is that when private consumption of arts and culture is taking place, the individual will accumulate cultural capital. This accumulated cultural capital can impact other people (e.g., through changed behavior, future decisions or interactions) and create externalities, i.e., the cultural capital externalities. The size of the externalities is expected to increase (or decrease) with the level of consumption. Without the consumption by the users, no externalities are produced. While this is one of the most fundamental arguments for cultural policy, it has not yet been extensively studied within cultural economics.

Leveraging big data for outdoor recreation management: A case study from the York river in Virginia

Outdoor recreation is important for improving quality of life, well-being, and local economies, but quantifying its value without direct monetary transactions can be challenging. This study explores combining non-market valuation techniques with emerging big data sources to estimate the value of recreation for the York River and surrounding parks in Virginia. By applying the travel cost method to anonymous human mobility data, we gain deeper insights into the significance of recreational experiences for visitors and the local economy. Results of a zero-inflated Negative Binomial model show a mean consumer surplus value of $26.91 per trip, totaling $15.5 million across nearly 600,000 trips observed in 2022. Further, weekends, holidays, and the summer and fall months are found to be peak visitation times, whereas those with young children and who are Hispanic or over 64 years old are less likely to visit. These findings shed light on various factors influencing visitation patterns and recreation values, including temporal effects and socio-demographics, revealing disparities that warrant targeted efforts for inclusivity and accessibility. Policymakers can use these insights to make informed and sustainable choices in outdoor recreation management, fostering the preservation of natural resources for the benefit of both visitors and the environment.

The lost value for users of cultural institutions during the COVID-19 pandemic: a life satisfaction approach.

Studies related to the assessment of the non-market values of culture typically employ methods based on stated or revealed preferences. In this paper, we implement a new emerging non-market valuation technique, namely the life satisfaction approach. In particular, we quantify in monetary values, the additional utility that people benefit from cultural experiences, as well as the additional disutility suffered by cultural consumers specifically due to the closure of cultural organisations during the COVID-19 pandemic, as the pandemic provides a unique setting. Using a survey conducted in Denmark in the spring of 2020, we confirm the link between cultural participation and well-being by estimating a life satisfaction model, instrumenting for both income and cultural participation to avoid simultaneity problems. Furthermore, we show that fervent cultural consumers have experienced an additional welfare loss during the lockdown period, controlling for all other known life dimensions affected by the pandemic. Our results aim to highlight the role of cultural participation insustaininglife satisfaction and, consequently, to support a well-being evidence-based cultural policy that facilitate cultural accessibility as a mean to increase the individual well-being.

Exploring Associations between Subjective Well-Being and Non-Market Values When Used in the Evaluation of Urban Green Spaces: A Scoping Review

Proximity and access to urban green spaces (UGSs) provide city dwellers with multiple benefits related to health and well-being. Understanding what (and how) characteristics of these spaces affect individuals’ perceived preferences and sense of well-being (subjective well-being) could be critical for relevant future planning interventions, policy design, and investments in green spaces. This scoping review aims to summarize, synthesize, and compare previous research findings about the application of (stated) preference-based methods, using non-market valuation techniques (e.g., willingness-to-pay methods), and non-preference-based measures of well-being (e.g., subjective well-being) to evaluate UGSs. By comparing these two methodologies, we aim to explore the differences and similarities among the determinants of benefits associated with UGS design and planning. We also seek to identify the most commonly used research approaches for measuring and/or projecting the impact of (new or rejuvenated) UGSs on people’s welfare and well-being. The review focuses on peer-reviewed empirical scientific work published during the period from 2010 to 2022.

Reviewing the use of proxies to value coastal and marine biodiversity protection: The Great Barrier Reef in Australia

Coastal and marine resources often require to be valued to assess management options and encourage sustainable policy-making. While numerous non-market valuation techniques are available, the complexity of biodiversity makes applications challenging. Typically, a small number of proxy assets (e.g. coral reefs) are used to represent more complex natural assets and processes in valuation exercises. While using proxies simplifies the assessment process, it can be challenging to interpret what values represent. We conduct a comprehensive review of the use of proxies to represent coral reef biodiversity in the Great Barrier Reef, Australia, spanning four decades (1983–2020) of literature. Studies are categorized based on the Total Economic Value and Ecosystem Services components they refer to, and the different approaches to the use of proxies. We identify that value estimates are sensitive to the type of proxy, and recommend habitat- or process-focused proxies over species-focused proxies as being more holistic and accurate. The most adequate proxies may, however, be considered on a case by case basis, depending on the policy question being addressed.

A systematic review of the use of environmental economics in the mining industry

Environmental economics is increasingly being used in project appraisals, environmental liability estimates and design of market-based instruments. Mining, an actor capable of causing adverse effects on the environment, human health and well-being, has already been affected by these developments, at a great extent. Up to date, several research studies have been carried out to monetise the externalities of mining projects. Nevertheless, a systematic review of these publications has not been carried out, yet. This paper aims to fill this gap in the literature by investigating (i) the main non-market valuation techniques used; (ii) the main external costs or benefits of mining projects monetized; and (iii) the monetary estimates of mining-related externalities. The analysis shows that practically all economic valuation techniques have been implemented towards assessing, in monetary terms, the mining impacts on the environment. However, the findings from the statistical analysis of the reveal a wide range of monetary estimates, which are attributed not only to the valuation methods and assumptions used but also to the specific characteristics of the mining projects in question. Also, the research draws directions for future research, as the analysis of the published studies indicates areas of limited availability of estimates or high heterogeneity between the available estimates.

Valuing nature-based recreation using a crowdsourced travel cost method: A comparison to onsite survey data and value transfer

Representing the economic value of recreation generated by natural ecosystems can provide a powerful incentive for their conservation. Demonstrating value, however, requires resource-intensive surveys or reliance on techniques which transfer value from other sites. Recent technological developments have contributed to an abundance of georeferenced public data as an alternative for exploring human-nature interactions, offering a potential substitute to costly and time-consuming visitor surveys and their commonly adopted alternative for the valuation of recreation, value transfer. Here, we (1) integrate data crowdsourced from geotagged photographs from social media into the travel cost method non-market valuation technique and (2) validate the results with value estimates generated using representative on-site surveys for German national parks and value transfer techniques. As expected from standard economic and consumer demand theory for ordinary goods, we find downsloping demand curves. Consumer surplus for access to the parks ranges between €16.54 and €34.90 (2016 rates). Value estimates are significantly correlated with those generated by on-site surveys, with a mean absolute error of €4.93 and a mean absolute percentage error of 22%, outperforming basic unit value transfer. We highlight the entailed, unprecedented opportunities to extend the scope and reduce costs of research seeking to value outdoor recreation.

The Role of Ecotourism in the Prespa National Park in Greece. Evidence from a Travel Cost Method and Hoteliers’ Perceptions

The Prespa National Park, is situated in a cross-border region in Greece, constitutes a protected ecosystem that provides very significant ecosystem services. In this region, ecotourism may constitute a powerful driving force for both environmental protection and local economic development. Therefore, future planning and management of this area should take under consideration its potential (eco)tourism benefits. However, as most of the recreation and leisure benefits cannot be directly captured by market valuation models, non-market valuation techniques should be applied to identify them. One of the most frequently used non-market valuation techniques to assess outdoor recreational services of specific sites (e.g. forests, protected areas, cultural heritage sites etc.) is the travel cost method (TCM). This methodology aims to relate the observed behavior of visitors to the total cost of their visit. In this paper, a hybrid travel cost model is developed and then applied to determine the individual recreational values and then to measure the total benefits of ecotourism in Prespa region. Then, in order to get a more comprehensive picture about the current and future role of ecotourism in this area, two surveys were implemented on local hotel owners by using both structured and semi-structured approaches.

Income and Ecosystem Service Comparisons of Refined National and Agroforestry Accounting Frameworks: Application to Holm Oak Open Woodlands in Andalusia, Spain

There is growing consensus regarding the implementation of a new statistical framework for environmental-economic accounting to improve ecosystem related policies. As the standard System of National Accounts (SNA) fails to measure the economic contribution of ecosystems to the total income of individuals, governments recognize the need to expand the standard SNA through the ongoing System of Environmental Economic Accounting (SEEA). Based on the authors’ own data, this study focuses on linking 15 economic activities and 12 ecosystem services for a holm oak (Quercus ilex L.) open woodlands (HOW) ecosystem type in Andalusia, Spain. We emphasize that overcoming the challenges of multiple use is preferable to measuring single ecosystem products for improving habitat conservation policies. The objectives of this paper are to measure and compare the environmental assets, ecosystem services, and incomes at basic and social prices by applying a refined version of the standard System of National Accounts (rSNA) and the authors’ Agroforestry Accounting System (AAS), respectively, to HOW. Considering intermediate products and consumptions of HOW farmer and government activities, we find that the rSNA ecosystem services and environmental incomes at basic prices are 123.3 €/ha and −28.0 €/ha, respectively, while those of the AAS at social prices are 442.2 €/ha and 250.8 €/ha. Given advances in non-market valuation techniques, we show that an expanded definition of economic activities can be applied to measure the contribution to total income of managed natural areas taking into account the multiple uses of the ecosystem type. However, HOW sustainability continues to be a challenging issue that requires ecological threshold indicators to be identified, not only because of the economic implications but also because they provide vital information on which to base policy implementation.

Costs and benefits of agricultural ammonia emission abatement options for compliance with European air quality regulations

BackgroundIn Europe, ammonia (NH3) emissions strongly contribute to fine particulate matter (PM2.5) pollution and associated premature human mortality. The National Emission Ceilings Directive 2016/2284/EU has set an obligation for all European Union countries to reduce the NH3 emissions by 6%, relative to 2005, by 2020. This study aims to assess the costs and benefits of four NH3 emission abatement options for the compliance of the agricultural sector with the commitments of the European air quality regulatory framework. A regional atmospheric model (WRF/Chem) was used to assess the effects of regulating NH3 emissions reductions on PM2.5 concentrations over Europe. Non-market valuation techniques (value of statistical life) were used to monetize the associated health outcomes.ResultsWe calculated that 16 out of the 28 EU member states exceeded their 2020 NH3 emission ceilings in 2016. The highest exceedances from the 2020 emission commitment level occurred in Latvia (15%), Germany (12%) and the UK (12%). Simulation of the required NH3 emission reduction by WRF/Chem showed that relatively large reductions in PM2.5 concentrations occur over central-western Europe and the UK. The largest health benefits (> 5% reduction in premature mortality) were found for Scandinavia. The economic benefit from avoided premature deaths over Europe amounts to 14,837 M€/year. The costs of four NH3 emission abatement options, where each would fully achieve the required emission reduction, range from 80 M€/year for low nitrogen feed to 3738 M€/year for low-emission animal housing, with covered manure storage (236 M€/year) and urea fertilizer application (253 M€/year), in between.ConclusionOur analysis indicates that the costs of compliance by the agricultural sector with the commitments of the European air quality regulations are much lower than the economic benefit. Thus, much more ambitious reduction commitments for NH3 emissions could be applied by the EU-28. The monetization of the health benefits of NH3 emission abatement policies and the assessment of the implementation costs can help policy-makers devise effective air pollution control programmes.

Application of choice modelling on mangrove forest valuation in West Lombok, Indonesia

A mangrove forest in West Nusa Tenggara is one of tourist destination that attracts many local and domestic tourists thanks to their natural beauty. In addition to its natural beauty, this place is also used as mangrove conservation and education-based tourism. However, there were various critical statuses in West Nusa Tenggara which damaged. The critical status is also spread in various regions on the island of Lombok, among others in the area of West Lombok Regency. The loss of mangrove forest occurs was because mangrove forests often are converted in order to generate directly marketable products, such as aquaculture that might lead to massive economic losses for the surrounding community. To make efficient resource allocation choices, decision makers need a framework to estimate the non-use values that might be held by the community for mangrove forest conservation. Non-market valuation techniques can be used for this purpose, by applying a choice modelling (CM), appears to hold some promise because it can be used to model complex situations and to frame choices consistent with ‘real life’ choices. In this paper, a CM method applied for assessing the values that the community and tourists hold for mangrove forest conservation in West Lombok, Indonesia.

Economic valuation of recreational attributes using a choice experiment approach: An application to the Galapagos Islands

Despite the increasing number of visitors to Galapagos National Park, the tourism industry pays little attention to the distinct preferences of tourists toward park attributes, including both its natural resources and managerial emphasis. To “monetize” the benefits of these attributes requires utilizing nonmarket valuation techniques. Using a stated preference questionnaire, we estimated the economic value of the park’s recreational attributes. The following five attributes were selected: endangered species, prevalence of garbage, site infrastructure, air quality, and entrance fees. The results of this study demonstrate that tourists place the highest willingness to pay values on increased protection of animal species (US$26.9) and garbage reduction (US$111.2). These results highlight the economic contributions for park management, with a potential for value improvement of US$38.1 per tourist if the park’s combined attributes are upgraded from the present condition to the optimum condition.

Understanding PES from the ground up: a combined choice experiment and interview approach to understanding PES in Costa Rica

Payments for environmental services (PES) are part of a suite of market-based conservation mechanisms that have gained international attention for their potential to produce ecosystem services across private landholdings. The Costa Rican government, a PES pioneer, provides landowners with remuneration for conserving forest cover on their properties. The efficiency and effectiveness of PES programs have been critiqued, because little is understood about the ability of payments to alter landowner behavior. Unique to the existent literature, we combine data from semi-structured interviews with an economic nonmarket valuation technique, the stated choice experiment, to explore preferences for PES and the impact of PES on decision making in the mixed-use Bellbird Biological Corridor of Costa Rica. The choice experiment reveals farmer preferences for PES, while interviews provide context for the choice experiment results and illuminate the implications for policy. Results show that farmer objections to PES design and program implementation influence willingness to accept payments for conservation efforts. Results further indicate that a significant share of farmers in the study area are resistant to the PES program irrespective of competitive payments offered. We suggest that this overall resistance to the program is a key driver of program inefficiency. We further suggest that potential program improvements require better engagement with multifaceted landowner values, and that PES may not constitute an effective mechanism for engaging small-scale farmers in conservation.

Contingent valuation and rural potable water systems: A critical look at the past and future

Determining the value of environmental goods that impact human populations, such as potable water, is often highly problematic. The all‐too‐common lack of realistic markets for the provisioning of these goods necessitates the use of nonmarket valuation techniques. Contingent valuation surveys are often an appropriate method, thanks to their ability to value hypothetical changes and nonuse values, and their limited prior data requirements. When properly implemented, contingent valuation surveys can estimate the maximum willingness to pay of surveyed individuals, allowing the value of the environmental good to be accurately measured. An analysis of the extant body of contingent valuation studies of rural potable water systems in developing and emerging countries indicates that rural water consumers are willing to pay, often substantially, for the creation of a potable water system or for improvements to existing system. Studies involving changes to existing potable water system, through improving an existing system for greater reliability or sustainability, showed a high degree of consistency in respondents' willingness to pay estimates as a percentage of income or current water tariff. Higher incomes, higher levels of education and youth, among other characteristics, were found to be positively correlated with higher willingness to pay estimates. Future contingent valuation studies focusing on improving comparability through greater methodological consistency, and addressing the impact of community power dynamics, intercommunal cleavages, and subsidies could be especially productive.This article is categorized under: Human Water > Value of Water Engineering Water > Planning Water Human Water > Water Governance

Ecosystem services’ values and improved revenue collection for regional protected areas

The management of conservation areas is a costly enterprise, especially vulnerable to budget cutting when austerity measures are being considered. Optimal spatial taxation dictates that tax-payers contribute proportionally to the benefits they receive. This paper provides a framework to derive spatially varied benefit estimates for ecosystem services produced in Natura 2000 protected areas of Lombardy (Italy). These may be used as a framework for spatially optimised taxation to improve the efficiency of public funding. In the process we used non-market valuation techniques, as well as benefit functions’ transfer.

Testing the regional transferability of coastal recreation values for report card application with limited data

Including socio-economic indicators in aquatic health report cards is becoming more common place, with the Gladstone Harbour Report Card a pioneering example in Australia. There has been limited consensus about the selection and range of social and economic indicators applied in different aquatic report cards. However, because tourism and recreation are one of the main ways people experience and enjoy aquatic resources, particularly in coastal areas, these uses have typically been included as socio-economic indicators. Estimating the economic value of recreation is more challenging than for tourism as specialist nonmarket valuation techniques are required, which can be expensive and time consuming to apply. One alternative is to estimate the economic benefits of outdoor recreation from secondary sources in a process known as benefit transfer.The aim of this study is to test the transferability of the recreation values estimated for the Gladstone Harbour Report Card for application in other similar report cards. A paucity of similar valuation studies limited the scope for comparison. An alternative approach was employed where an existing dataset was analysed to test for cross regional similarity and the results applied to infer the transferability of the Gladstone Harbour value for beach recreation. The results indicate that regional values for beach recreation are generally transferable across the large area (1400 km) of the Great Barrier Reef coastal zone and should be applicable elsewhere. However, the valuation scope can influence transferability and broader regional valuations are more transferable than smaller scale valuations. It is suggested that while for some purposes a more statistically robust definition of value equivalence maybe required, it is not necessary for report card purposes and transfer errors of up to 73% are acceptable.

Valuation approaches to ecosystem goods and services for the National Botanical Garden, Bangladesh

Abstract The main attractions of national parks include their scenic beauty, security, wildlife and trees. For preserving and maintaining national parks, an appropriate pricing policy can be used. The current study focuses on using the travel cost method (TCM) and contingent valuation method (CVM) as a non-market valuation technique to value the National Botanical Garden in Bangladesh, a developing country where little or no previous works of this kind has been conducted before. The main objective of the paper was to suggest an appropriate entrance fee for the park by assessing the willingness to pay (WTP) from the TCM and CVM; by determining a revenue maximizing entrance fee from the CVM; and by considering socio-demographics, the characteristics of visits and the motivation of the visitors to preserve the National Botanical Garden. The study sampled 100 visitors. These visitors participated in a survey which consisted of closed questions followed by a semi structured in-depth interview. For data processing, SPSS and Microsoft Excel were used. Based on the travel cost demand function using the TCM, the study found that the amount respondents were willing to pay for entrance was 0.955 US dollars and yearly consumer surplus was 593634.5 USD. From the CVM, it was estimated that the WTP was 0.225 USD for the entrance and revenue maximizing entrance fee was 0.376 USD. Finally, the entrance fee suggested for National Botanical Garden was around 0.225 USD.

The contingent valuation study of Heiðmörk, Iceland – Willingness to pay for its preservation

The decision-making and policy formation context in Iceland has been largely devoid of total economic valuations in cost-benefit assessments. Using an internet survey and applying the double bounded dichotomous choice methodology, this contingent valuation study sets out an estimate of the total economic value pertaining to Heiðmörk, a popular recreational area of urban open space located on the fringes of Reykjavík, Garðabær and Kópavogur. In so doing, this case study advances the practice of using non-market valuation techniques in the country. The welfare estimates provide evidence that Icelanders consider Heiðmörk to possess considerable total economic value, with taxpayers willing to pay a mean lump-sum tax in the range 17,039 to 24,790 ISK per payment to secure its preservation, equating to an estimated total economic value of between 5.87 and 35.47 billion ISK. In the light of possible competitive land management demands among Heiðmörk's three owners and many recreational users in the future, the establishment of these values and their potential use in cost-benefit assessments informs the debate concerning whether the area should be preserved or further developed to satisfy economic objectives. Additionally, a body of experimental evidence is formed suggesting that the increased duration of a fixed payment vehicle is associated with much higher total economic valuations compared to a one-year payment period.

WILLINGNESS TO PAY IN KUBAH NATIONAL PARK AND MATANG WILDLIFE CENTRE: A CONTINGENT VALUATION METHOD

National Park is an important component in the protected area system, and plays a key role in the tourism industry, precisely through ecotourism. Since its inception, the national park concept has been defined in different ways, but it is often connected with the idea of conservation and preservation of the nature and its ecosystems. Having the challenges in the determination of the value (price) of the non-market goods and services, non-market valuation techniques such as Contingent Valuation Method and Choice Experiment have been developed to cater the issues in valuing environmental goods. This study seeks to study on the association of ecotourism as a segment of tourism in Malaysia. However, the scope of this study is limited to the valuation of ecotourism of NPs in Malaysia, particularly in Kubah National Park, Sarawak. Data were obtained using questionnaires from face-to face interviews. A sample of 618 respondents, comprising of visitors and non-visitors (Kuching residents) were involved in the study.Keywords: Willingness to Pay; Kubah National Park; Ecotourism; Contingent Valuation Method; Entrance Fees.

An ecosystem services perspective for classifying and valuing the environmental impacts of geothermal power projects

An ecosystem services perspective can provide a useful means of understanding, in human well-being terms, the type, scale and value of environmental impacts deriving from the deployment of renewable energy technologies. This paper provides the first thematic review of the ecosystem service impacts commonly associated with developing geothermal areas for power projects. In this study, the typical ecosystem service impacts of geothermal power projects are classified using the Common International Classification of Ecosystem Services (CICES) typology. Next, in order to develop a guide for future practitioners, an analysis is conducted of the most suitable valuation methods for the respective ecosystem service impacts. A pluralist approach is advised to aide decision-making, involving the use of monetary and non-monetary information. A number of non-market valuation studies may be required to estimate the total economic value of affected geothermal ecosystems, likely including the contingent valuation and travel cost methods. The more intangible ecosystem services associated with geothermal areas, such as artistic inspiration and landscape aesthetics, are best valued using non-monetary approaches, including deliberative methods. Finally, in recognition of the importance of having a strong physical basis underpinning non-market valuation techniques, this paper critically assesses the merits of the most appropriate data sources for future environmental economists working in a geothermal context. A literature review reveals that neither Environmental Impact Assessments (EIA) nor Life Cycle Analysis (LCA) studies in a geothermal context have embedded an ecosystem service perspective into their processes. EIA are closest to fulfilling the needs of environmental economists, encompassing the majority of ecosystem service impacts, yet further methodological progress is recommended to ensure that all project stakeholders are given voice and arbitrage in the data-gathering process.