Valuing Environmental and Natural Resources: The Econometrics of Non-Market Valuation (New Horizons in Environmental Economics)

Non-market valuation has become a broadly accepted and widely practiced means of measuring the economic values of the environment and natural resources. In this work, the authors provide 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 analyse 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 typically deal with.