
Contents
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5.1 Introduction 5.1 Introduction
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5.2 The basis of value 5.2 The basis of value
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5.3 Ecosystem services and the value of nonmarketed environmental resources 5.3 Ecosystem services and the value of nonmarketed environmental resources
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5.4 The valuation of provisioning and cultural services 5.4 The valuation of provisioning and cultural services
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5.5 Revealed preference methods 5.5 Revealed preference methods
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5.6 Stated preference methods 5.6 Stated preference methods
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5.7 The valuation of regulating services 5.7 The valuation of regulating services
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5.8 Summary and conclusions 5.8 Summary and conclusions
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References References
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5 The Valuation of Environmental Goods and Services
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Published:May 2021
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Abstract
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.
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