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The development and application of economic valuation techniques and their use in environmental policy - A survey

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  • Ellen Moons

    (K.U.Leuven, C.E.S., Energy, Transport and Environment)

Abstract

This paper is concerned with the issue of how to introduce monetary valuation into public decision-making. This issue is closely related to introducing rational procedures into public decision-making (Pearce, 2001). All public decision-making involves choice. To economists, rational choice means making the 'best' use of available resources, i.e. choose that option that has the lowest opportunity cost or the lowest value to be sacrificed. Costs and benefits of any project should therefore be weighed as well as compared to cost and benefits of alternative projects. This implies that all impacts of these projects need to be expressed in the same unit to make comparison possible. Money seems to be the most obvious numéraire. We discuss some of the most popular economic valuation techniques and their potential role in public decision-making. Due to the high cost and time that is needed to perform original valuation studies and the limited knowledge of decision-makers with these techniques, we recommend that the Flemish Administration primarily invests in performing high-quality transfer studies.

Suggested Citation

  • Ellen Moons, 2003. "The development and application of economic valuation techniques and their use in environmental policy - A survey," Energy, Transport and Environment Working Papers Series ete0307, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    • Handle: RePEc:ete:etewps:ete0307
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    File URL: https://lirias.kuleuven.be/bitstream/123456789/119383/1/ETE-WP-2003-07.pdf
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    References listed on IDEAS

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    1. C.L. Kling & J.R. Crooker, 1999. "Recreation Demand Models for Environmental Valuation," Chapters, in: Jeroen C.J.M. van den Bergh (ed.), Handbook of Environmental and Resource Economics, chapter 52, Edward Elgar Publishing.
    2. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    3. Carson, R.T. & Mitchell, R.C. & Hanemann, W.M. & Kopp, R.J. & Presser, S. & Ruud, P.A., 1992. "A Contingent Valuation Study of Lost Passive Use Values Resulting From the Exxon Valdez Oil Spill," MPRA Paper 6984, University Library of Munich, Germany.
    4. Jeroen C.J.M. van den Bergh (ed.), 1999. "Handbook of Environmental and Resource Economics," Books, Edward Elgar Publishing, number 801.
    5. Trudy Ann Cameron, 1992. "Combining Contingent Valuation and Travel Cost Data for the Valuation of Nonmarket Goods," Land Economics, University of Wisconsin Press, vol. 68(3), pages 302-317.
    6. Francois Bonnieux & Pierre Rainelli, 1999. "Contingent valuation methodology and the EU institutional framework," Post-Print hal-01594003, HAL.
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    Cited by:

    1. Verbic, Miroslav & Slabe-Erker, Renata, 2009. "An econometric analysis of willingness-to-pay for sustainable development: A case study of the Volcji Potok landscape area," Ecological Economics, Elsevier, vol. 68(5), pages 1316-1328, March.
    2. Verbic, Miroslav & Erker, Renata, 2007. "Economic Valuation of Environmental Values of the Landscape Development and Protection Area of Volcji Potok," MPRA Paper 1819, University Library of Munich, Germany.
    3. Ruggiero Sardaro & Vincenzo Fucilli & Claudio Acciani, 2015. "Measuring the Value of Rural Landscape in Support of Preservation Policies," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(2), pages 125-138.

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