Valuing Environmental and Natural Resources

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Non-market valuation has become a broadly accepted and widely practised means of measuring the economic values of the environment and natural resources. This book provides a guide to the statistical and econometric practices that economists employ in estimating non-market values. The authors develop the econometric models that underlie the basic methods: contingent valuation, travel cost models, random utility models and hedonic models. They analyze the measurement of non-market values as a procedure with two steps: the estimation of parameters of demand and preference functions and the calculation of benefits from the estimated models. Each of the models is carefully developed from the preference function to the behavioural or response function that researchers observe. The models are then illustrated with datasets that characterize the kinds of data researchers typically deal with.