Resource Economists Should Do More Cost Analysis and Less Benefit Analysis
AbstractIn this paper I argue that Resource and Environmental economists are doing a disproportionate level of nonmarket valuation, "demand" or benefit estimation research, relative to what one could loosely call "supply" or cost analysis. By nonmarket valuation I mean deriving willingness-to-pay (WTP) values for unpriced goods and services. By cost analysis I mean economically oriented trade-off analyses e.g. estimating potential opportunity costs of managing forests to provide these goods and services. The first part of the paper reviews the basis of my skepticism of nonmarket valuation. The second part of the paper identifies why I believe cost analysis is a challenge, particularly in the context of ecological sustainability, and provides some examples of such work.
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Bibliographic InfoPaper provided by Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program in its series Working Papers in Ecological Economics with number 9801.
Date of creation: Feb 1998
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This paper has been announced in the following NEP Reports:
- NEP-ALL-1998-08-31 (All new papers)
- NEP-PBE-1998-08-31 (Public Economics)
- NEP-PUB-1998-08-31 (Public Finance)
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- Montgomery Claire A. & Brown Jr. , Gardner M. & Adams Darius M., 1994. "The Marginal Cost of Species Preservation: The Northern Spotted Owl," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 111-128, March.
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