Using economic valuation techniques to inform water resources management : A survey and critical appraisal of available techniques and an application

doi:10.1016/J.SCITOTENV.2006.02.032

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Using economic valuation techniques to inform water resources management : A survey and critical appraisal of available techniques and an application

Journal Article•DOI•

Using economic valuation techniques to inform water resources management : A survey and critical appraisal of available techniques and an application

Ekin Birol¹, Katia Karousakis², Phoebe Koundouri³•Institutions (3)

University of Cambridge¹, University College London², Athens University of Economics and Business³

15 Jul 2006-Science of The Total Environment (Elsevier)-Vol. 365, Iss: 1, pp 105-122

TL;DR: The role of economic valuation techniques in assisting in the design of efficient, equitable and sustainable policies for water resources management in the face of environmental problems such as pollution, intensive land use in agriculture and climate change is defined.

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About: This article is published in Science of The Total Environment.The article was published on 2006-07-15. It has received 357 citations till now. The article focuses on the topics: Integrated water resources management & Contingent valuation.

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Journal Article•DOI•

The science of the total environment

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Peter Arlien-Søborg, Peter Gregersen

01 Jul 1987-Science of The Total Environment

2,261 citations

Economics of natural resources and the environment

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Ronaldo Seroa da Motta

01 Apr 1990

1,294 citations

Journal Article•DOI•

Using a choice experiment to account for preference heterogeneity in wetland attributes: The case of Cheimaditida wetland in Greece

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Ekin Birol¹, Katia Karousakis², Phoebe Koundouri³•Institutions (3)

University of Cambridge¹, Organisation for Economic Co-operation and Development², Athens University of Economics and Business³

01 Nov 2006-Ecological Economics

TL;DR: In this article, a choice experiment is employed to estimate the values of changes in several ecological, social and economic functions that Cheimaditida wetland provides to the Greek public.

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505 citations

Journal Article•DOI•

Management of the marine environment: integrating ecosystem services and societal benefits with the DPSIR framework in a systems approach.

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Jonathan P. Atkins¹, Daryl Burdon¹, Michael Elliott¹, Amanda J. Gregory¹•Institutions (1)

University of Hull¹

01 Feb 2011-Marine Pollution Bulletin

TL;DR: Taking a systems approach incorporating an understanding of The Ecosystem Approach, the DPSIR framework is integrated with ecosystem services and societal benefits, and the focus this gives allows to create a specific framework for supporting decision making in the marine environment.

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399 citations

Cites methods from "Using economic valuation techniques..."

...…the travel cost method, contingent valuation, the choice experiment method, damage costs avoided, defensive expenditures, relocation costs, replacement/substitution costs and restoration costs (see for example Turner et al., 2001; Birol et al., 2006; Beaumont et al., 2008; Turner et al., 2010)....
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...These methodologies include: market analysis, productivity gains and losses, production function analysis, hedonic pricing, the travel cost method, contingent valuation, the choice experiment method, damage costs avoided, defensive expenditures, relocation costs, replacement/ substitution costs and restoration costs (see for example Turner et al., 2001, 2010; Birol et al., 2006; Beaumont et al., 2008)....
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Journal Article•DOI•

Economics of Outdoor Recreation

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S. J. Toth

01 Nov 1967-Soil Science

366 citations

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References

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Conditional logit analysis of qualitative choice behavior

[...]

Daniel McFadden

01 Jan 1972

15,741 citations

Book•

Limited-Dependent and Qualitative Variables in Econometrics

[...]

G. S. Maddala

01 Jan 1983

TL;DR: In this article, the authors present a survey of the use of truncated distributions in the context of unions and wages, and some results on truncated distribution Bibliography Index and references therein.

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Abstract: Preface 1. Introduction 2. Discrete regression models 3. Probabilistic-choice models 4. Discriminant analysis 5. Multivariate qualitative variables 6. Censored and truncated regression models 7. Simultaneous-equations models with truncated and censored variables 8. Two-stage estimation methods 9. Models with self-selectivity 10. Disequilibrium models 11. Some applications: unions and wages Appendix: Some results on truncated distributions Bibliography Index.

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13,828 citations

Book Chapter•DOI•

A New Approach to Consumer Theory

[...]

Kelvin Lancaster

01 Apr 1966-Journal of Political Economy

TL;DR: In this article, the authors extend activity analysis into consumption theory and assume that goods possess, or give rise to, multiple characteristics in fixed proportions and that it is these characteristics, not goods themselves, on which the consumer's preferences are exercised.

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Abstract: Activity analysis is extended into consumption theory. It is assumed that goods possess, or give rise to, multiple characteristics in fixed proportions and that it is these characteristics, not goods themselves, on which the consumer’s preferences are exercised.

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9,495 citations

"Using economic valuation techniques..." refers background or methods in this paper

...A relatively new addition to the portfolio of SPM, the choice experiment method (CEM), is theoretically grounded in Lancaster's characteristics theory of value (Lancaster, 1966) and based on random utility models (RUMs) (Luce, 1959; McFadden, 1974)....
[...]
...The hedonic pricing method (HPM) is based on Lancaster's characteristics theory of value (Lancaster, 1966), which states that any good can be described as a bundle of characteristics and the levels these take, and that the price of the good depends on these character- istics and their respective…...
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...This is true for both developed and developing countries alike, and is due to the nature of the economic development and growth path that has been chosen thus far, which has readily substituted environmental resources (such as water) for other forms of economic resources such as capital and labour…...
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...Revealed preference methods, also known as indirect valuation methods, look for related or surrogate markets in which the environmental good is implicitly traded (i.e., if it is one of the many components of a good that is purchased by the consumer; Lancaster, 1966)....
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Book•

Using surveys to value public goods : the contingent valuation method

[...]

Robert Cameron Mitchell, Richard T. Carson

01 Mar 1989

TL;DR: Mitchell and Carson as discussed by the authors argue that at this time the contingent valuation (CV) method offers the most promising approach for determining public willingness to pay for many public goods, an approach likely to succeed, if used carefully, where other methods may fail.

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Abstract: Economists and others have long believed that by balancing the costs of such public goods as air quality and wilderness areas against their benefits, informed policy choices can be made. But the problem of putting a dollar value on cleaner air or water and other goods not sold in the marketplace has been a major stumbling block. Mitchell and Carson, for reasons presented in this book, argue that at this time the contingent valuation (CV) method offers the most promising approach for determining public willingness to pay for many public goods---an approach likely to succeed, if used carefully, where other methods may fail. The result of ten years of research by the authors aimed at assessing how surveys might best be used to value public goods validly and reliably, this book makes a major contribution to what constitutes best practice in CV surveys. Mitchell and Carson begin by introducing the contingent valuation method, describing how it works and the nature of the benefits it can be used to measure, comparing it to other methods for measuring benefits, and examining the data-gathering technique on which it is based---survey research. Placing contingent valuation in the larger context of welfare theory, the authors examine how the CV method impels a deeper understanding of willingness-to-pay versus willingness-to-accept compensation measures, the possibility of existence values for public goods, the role of uncertainty in benefit valuation, and the question of whether a consumer goods market or a political goods market (referenda) should be emulated. In developing a CV methodology, the authors deal with issues of broader significance to survey research. Their model of respondent error is relevant to current efforts to frame a theory of response behavior and bias typology will interest those considering the cognitive aspects of answering survey questions. Mitchell and Carson conclude that the contingent valuation method can obtain valid valuation information on public goods, but only if the method is applied in a way that addresses the potential sources of error and bias. They end their book by providing guidelines for CV practitioners, a list of questions that should be asked by any decision maker who wishes to use the findings of a CV study, and suggestions for new applications of contingent valuation. Additional features include a comprehensive bibliography of the CV literature and an appendix summarizing more than 100 CV studies.

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5,546 citations

"Using economic valuation techniques..." refers background in this paper

...Only 3 respondents (i.e. 2.5% of the sample) had true zero WTP, whereas 15% of the responses were protest votes, constituting a substantial portion of zero bids (Mitchell and Carson, 1989)....
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...Ultimately, the mean WTP bids that have been obtained from the sample can then be extrapolated across the population to obtain the aggregate WTP or value of the environmental resource (Mitchell and Carson, 1989)....
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Journal Article•DOI•

The Economics of Exhaustible Resources

[...]

Harold Hotelling¹•Institutions (1)

Stanford University¹

01 Apr 1931-Journal of Political Economy

TL;DR: In this article, a discussion is confined in scope to absolutely irreplaceable assets, including peculiar problems of mineral wealth, free competition, maximum social value and state regulation, monopoly, value of a mine monopoly, retardation of production under monopoly, price effects from cumulated production, and the author's mathematically derived optimum solutions.

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Abstract: The discussion is confined in scope to absolutely irreplaceable assets Topics include peculiar problems of mineral wealth, free competition, maximum social value and state regulation, monopoly, value of a mine monopoly, retardation of production under monopoly, price effects from cumulated production, and the author's mathematically derived optimum solutions (PCS)

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3,508 citations