Non-market Valuation Research Articles

Cost benefit analysis of diversified farming systems across Europe: Incorporating non-market benefits of ecosystem services

Crop diversification can enhance farm economic sustainability while reducing the negative impact on the environment and ecosystem services related. Despite the market and non-market benefits of crop diversification, monocropping is a widely used dominant practice in Europe. In this context, this works aims to assess the overall economic impact of several crop diversification systems across Europe and compared it to the monocropping system. For this purpose, an economic valuation by integrating market and non-market values for eight case studies distributed across three different European pedoclimatic regions (Southern Mediterranean, Northern Mediterranean and Boreal) is proposed. The economic valuation was conducted both in the short and medium-long term. For the short-term we conducted a social gross margin analysis, while for the medium-long term a cost-benefit analysis is developed. The results show an improvement in social gross margins for most of the diversification scenarios assessed when environmental and socio-cultural benefits are considered in the short-term. In the medium and long-term the transformation of cropping towards a more diversified agriculture is encouraged by greater economic benefits. These results provide a first insight in global economic performance of diversified cropping systems, whose main contribution relies on the integration of market and non-market values of ecosystem services from crop diversification. They are expected to be useful for guiding policy makers to promote crop diversification practices as a key instrument for building resilience in farming systems for an adaptive management to climate change.

Adoption of Cashless Transaction by the Farming Households in Coimbatore District of Tamil Nadu, India

Aims: The research study aims to study the level of adoption and factors influencing the adoption of cashless transaction by the farming households in farming and non-farm activities.
 Study Design and Methodology: A development index for Tamil Nadu districts, prioritizing e-infrastructure, was crafted from secondary data on agriculture, health, infrastructure, and telecommunication. Coimbatore, with a high development index, was selected using a three-stage stratified random sampling approach involving 120 households. Utilizing tools like the development index, econometric models, scoring/ranking techniques, and non-market valuation methods, values ranged from 0 to 1, indicating low to high development. An adoption index classified respondents into low, medium, high, and very high adopters, evaluating cashless transaction adoption. The logit model pinpointed factors influencing cashless transaction adoption among farm households.
 Results and Conclusion: This study shows a gradual shift towards cashless transactions among farmers, primarily driven by government policies promoting bank account usage for subsidies and loans. In Coimbatore, a developed district in Tamil Nadu, the adoption index is 63 per cent for non-agricultural and 44 per cent for agricultural transactions, highlighting a significant difference. The slow adoption is attributed to incomplete sales portal transformation and farmers' limited awareness of online platforms for input purchases. Despite challenges, farmers exhibit a positive attitude, emphasizing the importance of addressing issues such as financial literacy, internet connectivity, and infrastructure for successful cashless transactions.

Non-market value of recreational areas for hiking: the case of the Apennines around Parma

ABSTRACTThe recreational value of mountain areas is an important non-market service provided by forest ecosystems. However, as with other public goods, the lack of a market typically leads to underprovision. In this study, we combine the travel cost and the contingent behaviour methods to evaluate the recreational value of the Western part of the Apennines around Parma (Italy), a free-access area of great natural beauty which also qualifies as a marginal area, under current and hypothetical conditions. Using the data collected through an online survey of 113 visitors of the area and the estimated parameters from a truncated negative binomial regression, we find that the recreational value of the site under current conditions is equal to 187 euro per visitor per year, corresponding to an overall value of 374,340 euro for all the hikers visiting the area each year. Moreover, the provision of additional services such as the creation of wellbeing trails may significantly increase the value of the site (+32.8%). The results from this analysis suggest that policymakers may wish to invest in natural resources to support the economic development of marginal areas.

Spatial dimensions in stated preference valuation: The role of place attachment

The importance of considering spatial dimensions in welfare analysis is increasingly acknowledged, but there are still knowledge gaps. For this purpose, we turn to environmental psychology and use place attachment, the functional and emotional bond people have to a defined place. We conduct a stated preference study of new recreational mountain homes in southeast Norway and investigate the concept of place attachment to explain spatial preference heterogeneity towards reducing recreational home developments and preserving the mountain landscape and biodiversity. Using structural equation modelling, we find that place attachment is spatially determined and helps explain spatial variations in pro-environmental preferences and distance decay in nonmarket values. In contrast to most previous studies, place attachment reduces pro-environmental behaviour across the entire sample. However, among respondents preferring the smallest development plan, we find that place attachment explains a substantial part of an identified distance decay effect in willingness-to-pay (WTP). About 55 per cent of the negative impact of travel time on WTP indirectly channels through reduced place attachment. Place attachment also substantially improves the fit of our econometric model. Place attachment may provide valuable information on the affected populations when evaluating land-use policies.

Estimating the non-market value of island biodiversity in China: Controlling for warm glow bias in contingent valuation method

Island ecosystems have always played a leading role in conservation biology globally. However, the rich biodiversity of islands is seriously threatened by human activities. Quantifying island biodiversity in economic terms is important since it allows the benefits associated with island biodiversity to be directly compared with the economic value of alternative resource use options, which is essential in the formulation of effective policies for island biodiversity conservation. The main objective of this paper is to assess the economic value of island biodiversity on Pingtan Island, China. The contingent valuation method (CVM) was used to obtain a public willingness to pay (WTP) estimate for a policy to protect island biodiversity. To obtain a more reliable WTP estimation result, a grouped data model was used to test and correct for warm glow bias. The results demonstrate that more than half of the positive bidders are individuals who could be considered to exhibit warm glow behavior and that the warm glow effect will result in an overestimation of WTP. After endogenizing the warm glow effect, the estimated total value of marine biodiversity on Pingtan Island is 73.72 million Chinese yuan (CNY) per year. The results could provide a data basis for cost-benefit analysis, ecological restoration and other environmental management schemes related to island biodiversity.

Study on the Economic Valuation of Water Resources and the Allocation of Rights and Interests in Water Resources

With the increasing scarcity and uneven distribution of water resources around the world, scientific assessment and rational allocation of water resources have become urgent tasks in today’s society. This study focuses on the assessment of the economic value of water resources and the allocation of water resources’ rights and interests, aiming to explore how to accurately assess the economic value of water resources and how to realize a reasonable and fair allocation of resources’ rights and interests among different stakeholders. The importance of water resources and their values in economic, ecological and social aspects are analyzed from the background of global water resources issues. Reveal the multidimensional value of water resources by integrating market and non-market valuation methods. The study further examines the existing equity allocation mechanisms, analyzes their strengths and weaknesses, and points out that the traditional mechanisms may lead to over-exploitation of resources and imbalance of equity. The systematic theoretical discussions and practical case studies provide new perspectives and methods for water resources management and policy making

Public perception and preferences of industrial green infrastructure in Northwest China

The increasing global demand for sustainable urban development has led to the widespread adoption of Green Infrastructure (GI) worldwide. However, there remains a lack of understanding regarding public support for implementing GI specifically at industrial sites. This study focuses on promoting industrial GI (IGI) and examines residents' willingness to pay (WTP) for GI installation and the nonmarket value of GI is estimated using the travel cost method (TCM). Among respondents residing in neighborhoods surrounding industrial areas, a significant proportion (90%) expressed their WTP for GI promotion. The aggregated annual WTP for IGI and Neighbourhood GI (NGI) were estimated to be approximately CNY 16.2 million and CNY 21.9 million, respectively. Moreover, the annual nonmarket value provided by IGI and NGI to human well-being was estimated to be around CNY 4.5 million and CNY 20.7 million, respectively. The study reveals that middle-aged and middle-income groups exhibit a higher propensity for WTP, with specific GI measures such as rain gardens, vegetated swales, trees, and naturalized landscaping receiving greater WTP intentions. The primary challenges identified for promoting IGI include cost, policy, and maintenance considerations. This study recommends customizing planning approaches for IGI promotion, considering diverse demographics, including constructing youth apartments near industrial areas, implementing age-friendly design features, and enhancing landscape design in elderly communities. Disseminating GI knowledge through media and partnering with local organizations for awareness enhancement is essential for encouraging higher WTP. The effectiveness of water features and pedestrian-friendly areas in improving and promoting IGI spaces is also highlighted. These findings offer valuable insights to policymakers and city planners, facilitating the identification of more effective GI designs for promoting sustainable urban environments that align with societal preferences and demands.

Willingness to Contribute Time versus Willingness to Pay for the Management of Harmful Algal Blooms

The harmful impacts of the ongoing Sargassum invasions in the Atlantic Ocean include fish kills, skin and eye irritation, beach fouling, and declines in fisheries and tourism in West Africa and the Americas. This study was conducted to address important gaps in the non-market valuation literature and support the design of effective adaptation policies to reduce the harmful impacts of algal blooms. Contingent valuation survey data and linear mixed-effects regression models were utilized to estimate the drivers of willingness to pay (WTP) and willingness to contribute time (WTCT) for the management of invasive Sargassum seaweeds in Ghana. The study revealed that income, education, family size, years of residence, sex, attitudes, and political affiliation are significant drivers of WTP, while distance to the beach, occupation, house ownership, attitudes, and political affiliation are also significant predictors of WTCT. Hence, only attitudes about invasive seaweeds and political affiliation influence both WTP and WTCT. The findings suggest that for developing countries to generate enough funding and adequate economic support for coastal resource conservation, they should design local resource protection programs that give residents the option to contribute both time and money.

Willingness to pay to avoid mining with adverse externalities

ABSTRACT This paper is one of the very few to use the discrete choice experiment method (DCEM) to estimate the nonmarket values of the impacts on the environmental and health related to mining activities in a developing country. We show that the local population that live close to the mining sites is willing to contribute relatively high levels of money or working hours to avoid mining projects using open pits as their exploitation technology and having important adverse impacts on residents’ environment and health. This study is also one the first to apply the DCEM on the mining setting, to analyse the welfare differences between two contribution modes, money and working hours, and to use the mixed-logit model in this context. We found that the willingness to pay with money, relative to the willingness to work, is not downward biased, a concern in the related literature considering developing countries. To prevent social conflicts, mining companies and governments need to consider the high value that local populations assign to avoid mining with adverse attributes. Such conflicts are costly for mining companies, local populations and countries.

Valuing surfing ecosystems: an environmental economics and natural resources management perspective

Surfing ecosystems—surf breaks and their surrounding areas—can provide multifaceted benefits, including support for tourism industries, personal and social wellbeing and shoreline protection. Previous research has predominantly concentrated on quantifying direct expenditures, sidelining non-market values, and failing to consider the interactions between multiple ecosystem components. To address these gaps, this paper provides a review of key principles of environmental economics and natural resource management in relation to surfing ecosystems. We examine how the value of surfing ecosystems can affect (and be affected by) factors related to environmental sustainability, tourism demands and economic development. We propose a novel framework for characterizing the values of surfing ecosystems and conducting economic assessments, based on six main features: (i) surf breaks, (ii) surfing resources, (iii) surfing ecosystems, (iv) economic values, (v) economic valuation, (vi) equity and sustainability. This structured approach may serve to improve decision-making processes concerning environmental changes that impact surfing ecosystems, including tourism management plans and environmental regulations. Our study aligns with broader global initiatives to better account for ocean-based values and support sustainable, nature-based tourism.

The amenity value of natural views

AbstractWe estimate nonmarket values for natural views in an urban setting. These views contain the aesthetics of natural areas commonly found in public parks and open space, and offer an aspect of property valuation that previous research is unable to disentangle from proximity to parks and open space. We incorporate machine learning techniques on Google Street View images to identify natural views in an urban setting. We find positive capitalization rates associated with household views of park‐like properties. Estimates are robust to a variety of specifications, including models that are identified off of new developments on neighboring properties and falsification tests that help to rule out the effect of a broader neighborhood environment. From a policy perspective, our results inform as to the optimal size, location, and shape of open space. Furthermore, machine learning methods used in the construction of our view variable provide a potentially powerful tool for other nonmarket valuation studies.

Total economic costs of climate change at different discount rates for market and non-market values

What will be the aggregated cost of climate change in achieving the Paris Agreement, including mitigation, adaptation, and residual impacts? Several studies estimated the aggregated cost but did not always consider the critical issues. Some do not address non-market values such as biodiversity and human health, and most do not address differentiating discount rates. In this study, we estimate the aggregated cost of climate change using an integrated assessment model linked with detailed-process-based climate impact models and different discount rates for market and non-market values. The analysis reveals that a climate policy with minimal aggregated cost is sensitive to socioeconomic scenarios and the way discount rates are applied. The results elucidate that a lower discount rate to non-market value—that is, a higher estimate of future value—makes the aggregated cost of achieving the Paris Agreement economically reasonable.

Social cost of waste-to-energy (WTE) incineration siting: From the perspective of risk perception

Faced with the rapidly growing amounts of municipal solid waste, the development of waste-to-energy (WTE) plants is conducive to resolving the garbage siege problem. However, the public tend to exaggerate the fire and explosion risks and the toxic pollutants from WTE incineration plants. Protest campaigns against the siting of WTE facilities are mounting in China, implying that the excessive risk perceptions would result in social costs such as the reduction in net benefits for operating WTE facilities and market failure in the housing market due to negative externalities. Considering the importance of public risk perception in energy policy options, this study uses a social cost model to identify the determinants of risk perception, how the risk perception would influence facility expansion, and measure the non-market value of marginal efforts made by the government based on the field survey data in Shenzhen. Results showed that: (1) residency status, household income and living distance influence public risk perception; (2) the fitting risk perception significantly reduces the probability of approving facility expansion with the marginal effect of 8.8%; (3) exaggerated risk perceptions distort the adjacent property market and the marginal cost of government's efforts to maximize individual welfare is 651–932 USDs.

Using social media data to estimate recreational travel costs: A case study from California

Understanding the economic value of ecosystem services is necessary to facilitate sustainable land use management, and to inform policy and decision making. However, valuing and monetizing ecosystem services remains challenging. Benefit-transfer and non-market valuation methods typically rely on administrative data and surveys, but this is time consuming, limited, and requires much more resources. Social media and other types of big data provide accessible and georeferenced data that can be incorporated into valuation approaches. We use recreation as an example and the Tahoe Central Sierra Initiative (TCSI) project area in California as a case study to explore the usefulness of such data in estimating travel costs that form an integral part of determining the value of recreational ecosystem services through the travel cost model. We estimated 6,951 person user days of recreation from 2,245 visitors who uploaded photographs to the Flickr photo-sharing application between 2005 and 2019. We used metadata from the images to infer visitor origins and estimate trip distance and costs of travel for visitors that took day trips (<500 miles (∼800 kms) roundtrip) to the area. Our results show that the most demand for recreational opportunities in the TCSI came from domestic visitors, particularly those from California and Nevada who took day trips. On average, visitors spent $156 per single day trip. The total cost of travel for recreational visits to the TCSI for the period was $491,500 (an average of $32,800 per year). However, when adjusted to align with actual visitation, the travel costs could range from $1.35 to $1.84 billion per year. Estimating recreational use and highlighting the travel cost for recreational opportunities illustrates how crowdsourced data can refine valuation approaches such as the widely used travel cost approach, which may fill in data gaps in valuing ecosystem services.

Willingness to pay for higher environmental standards for avocado production in Great Barrier Reef catchments

There is substantial evidence that consumers prefer food to be produced at higher environmental standards. There are two main options for improving demand signals for environmentally sensitive production through markets: ecolabels, where consumers can choose to buy differentiated products, and environmental standards, where consumers can opt for higher standards at higher costs. Yet there is limited information about the extent to which consumers would be willing to pay extra and support these options. In this study we apply three separate parallel non-market valuation experiments (best worst scaling, contingent valuation and discrete choice experiments) in a survey of Australian households to identify the level of consumer support for avocados to be produced at higher standards. We estimate both the willingness to pay and the proportion of consumers prepared to support ecolabelling and environmental standard approaches, correcting for quantity changes and factors affecting support. Our case study application is avocado production in catchments of the Great Barrier Reef in Australia, where we find a similar willingness to pay per unit for five star water quality improvements under the ecolabelling option with a discrete choice experiment ($0.22/unit) compared to the environmental standards option assessed with contingent valuation ($0.22/unit). The key insight from our work is that assessing the quantum of consumer support is more important than assessing the price premiums, and that more consumers will support universal higher environmental standards than ecolabelled options.

Conservation motivations and willingness to pay for wildlife management areas among recreational user groups

Conservation agencies routinely evaluate the costs and benefits of land management and land acquisition options for wildlife management areas (WMAs). Non-market values, for example visitors’ consumer surplus, are often absent from these comparisons. Better estimates of willingness to pay (WTP) for WMAs will allow managers to quantify consumer surpluses for different user groups, identify opportunities to generate additional conservation funding, and improve communication with users. We used the contingent valuation method to estimate the WTP for conservation of WMAs by different user groups. We used interval censored regression to estimate WTP for each user group and modeled how WTP varied with visitation frequency, demographics, and type of use. Dual users, those who participated in both licensed (hunting, angling, or trapping) and non-licensed (all other) activities, had greater WTP ($200.07, 95% CI [$161.18, $238.95]) than users who exclusively participated in either a single non-licensed ($74.74, 95% CI [$50.45, $99.02]) or a single licensed activity ($68.21, 95% CI [$48.41, $88.00]). Willingness-to-pay increased with the number of visits to WMAs per year, college education, and income. The most popular donation motivations were that respondents cared about WMA conservation (72%), wanted WMAs to be around for future generations (70%) and personally benefited from the conservation of WMAs (64%). Similar to a scope test, this study demonstrated greater WTP by users who participate in more diverse recreation types on WMAs. Additionally, our findings show that WMA users, particularly users who engage in multiple activities including at least one that does not require a license, enjoy large consumer surpluses and thus could be drawn on for additional financial support for WMA conservation.

Translating Tourists’ Satisfaction Data into Economic Value of the National Forest Parks in China

ABSTRACT Conventional nonmarket valuation methods have several shortcomings and limitations. This study presents a novel method of the tourist satisfaction approach (TSA) and employs it to value the attributes of national forest parks (NFP) in China. A tourist satisfaction model was established to depict the underlying relationship of tourists’ satisfaction with park attributes, tourists’ demographic traits, and their travel costs. Data on tourist satisfaction and park attributes were collected from 30 Chinese NFPs. The results reveal that TSA can be a powerful tool for valuing NFP resources and their related management activities. The empirical results show that the quality of NFP attributes directly affects tourist satisfaction, which can lead to a significant amount of economic value. For example, on average, a visitor is willing to pay ¥323.18 ($47.86) to reduce park congestion, and ¥118.22 ($17.51) lessen the number of observable litter on the park sites.

Are citizens willing to pay for the ecosystem services supported by Common Agricultural Policy? A non-market valuation by choice experiment

Public attention to the impact of human activities on the environment is growing over time across several sectors, particularly agri-food.In Europe, the agricultural sector's focus on sustainability has influenced EU policies for at least 40 years. The Common Agricultural Policy (CAP) has for years been proposing tools, commitments, and incentives to mitigate the over-use of natural resources and to increase or maintain the flow of ecosystem services (ES) provide by agro-ecosystems.In the latest reform (23–27), the EU strengthens the commitments required of farmers for environmental issues. The role of farmers in natural capital management and ES provision seems to be recognized, EU subsidies for farmers seem to be more related to sustainability and well-being concerns of European citizen.However, it is necessary to understand whether society recognizes these benefits and legitimizes this transfer of public money for these purposes. This study aims to evaluate non-farmers citizen preference through a Choice Experiment for the potential higher flows of ES provided by three of the reformulated and new Good Agricultural Environmental Conditions – GAEC.The case study developed in Italy collected data from 185 citizens of the Po Valley, one of the most intensely cultivated areas in Europe. Analyses demonstrated how society recognizes the benefits provided by more sustainable agricultural systems, showing a preference for higher ES flows.The results show that there is a hypothetical value recognized by society for ES attributable to new GAECs that will be implemented by CAP farmers. In the case study, this value is higher than what farmers currently receive for general environmental purposes through direct payment for the management of arable land. Analysis it could justify that efforts required by the new CAP reform (23–27) to the farmers to achieve sustainable agricultural systems could be compensate and supported by positive citizens valuation.

The Influence of Ambient Weather Conditions on Stated Preferences for Ecosystem Services Management

One of the assumptions in stated preference studies is the stability of respondents’ preferences. This assumption might be violated in situations of context dependence, i.e., when the contingent situation influences respondents’ choices. Ambient weather conditions (AWCs) are one element of the context that may influence stated preferences. The literature suggests that AWCs affect people’s emotions, behaviors, and decision-making processes; however, the potential AWCs impact in environmental preference studies has not yet been investigated. This aspect is of high importance because context-dependent choices return biased willingness to pay estimates and affect the subsequent welfare analysis that informs public policy. To shed light on this important aspect of non-market valuation studies, we explore the effect of AWCs on preferences elicited with a Discrete Choice Experiment for ecosystem services management of a Nature Park. Results of a generalized mixed logit model evidenced a significant effect of AWCs on respondents’ choices, with good weather conditions leading to higher preferences and willingness to pay for ecosystem services management. This result, which is consistent with previous psychological studies, raises the issue of sampling design and reveals the importance of a sensitivity analysis of WTP. As this issue is still unexplored in stated preference studies, we also encourage undertaking similar studies to add a priori knowledge for more accurate ex-post calibration of WTP estimates.

Multi-Criteria Decision Analysis (MCDA) for estimate economic valuation for flood risk in DKI Jakarta Province

A 4-day-flood occurred in Jakarta Province, Indonesia at the end of 2019 caused severe moral and material losses and weakened the economy. Various flood risk management methods are available to mitigate this damage. Assessing flood risks is thus an essential task for disaster management activities. An accurate flood risk map is required to be developed. In this research, we developed an economic valuation of flood risk that combines a quick flood map with the consequences of flooding using the Multi – Criteria Decision Analysis (MCDA) in the DKI Jakarta area. A quick identification of flood zones was carried out using SAR (Synthetic Aperture Radar). We estimated that about 54.10 km2 area was flooded area with a total economic loss about 1.406 trillion rupiahs. The sector of construction (10.10%), manufacturing (11.51%), wholesale, rental trade and repair of vehicles (13,90%), business activities (6.77%), financial & insurance (7.33%), and information & communication (7.6%) are major affected sectors that contributes 56.86% of the total economic loss from the market value. 20.49%-other service activities implicitly underestimate the value of environmental services and human productivities. To understand this, a detailed analysis of non-market value is needed in understanding the actual total economic loss.