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The International Handbook on Non-Market Environmental Valuation

The International Handbook on Non-Market Environmental Valuation

Elgar original reference

Edited by Jeff Bennett

Non-market environmental valuation (NMEV) is undergoing a period of increased growth in both application and development as a result of increasing recognition of the role of economics in environmental policy issues. Against this backdrop, The International Handbook on Non-Market Environmental Valuation brings together world leaders in the field to advance the development and application of NMEV as a tool for policy-making.

Chapter 8: Decision versus Experiences Utility: An Investigation Using the Choice Experiment Method

Dugald Tinch, Sergio Colombo and Nick Hanley

Subjects: economics and finance, environmental economics, valuation, environment, environmental economics, valuation

Extract

8 Decision versus experienced utility: an investigation using the choice experiment method Dugald Tinch, Sergio Colombo and Nick Hanley1 EMPIRICAL CONTEXT The upland areas of the UK are replete with rich and varied landscapes. Few of these are ‘wild’ landscapes; most are managed in some way, and can at best be described as semi-natural. Management is vital for maintaining these semi-natural upland landscapes. However, many land management practices, and in particular agricultural activity, are currently uneconomic, making a loss net of subsidy payments (Peak District Rural Deprivation Forum, 2004). Therefore, the maintenance of landscape quality is at least in part dependent upon funding from agri-environmental schemes. An analysis of preferences for upland management intensity is therefore indicated as it provides a useful tool for analysis of appropriate agri-environmental policies from an economic efficiency standpoint. In his seminal 1967 paper on non-use values, Krutilla identified landscape quality as being an important source of utility for individuals, making up a significant part of ‘real income’. This, he suggested, argued for an increase in attempts to value the environment. There has been much research on the topic of environmental resources since Krutilla wrote his article but the central tenet, that environmental goods should be considered in the decision-making process as they have significant value, remains the same. Given that government spending decisions are increasingly being made on a cost–benefits basis there is a further requirement that environmental goods are quantified in such a way as to be included in this structure, that...

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