Non-Market Valuation Methods

In this lecture, Dr. Pete Schuhmann presents an overview of non-market valuation methods and the data needed to use them in the case of environmental goods and services. He starts by presenting definitions of value and valuation and notes the differences between willingness-to-pay and willingness-to-accept, as well as the differences between costs and gain. He notes that in the context of environmental goods and services for which there may or may not be a market, there are a range of market and non-market valuation approaches that can help generate common units of measure and comparisons for decision-making. He highlights market-based methods of valuation like replacement costs and damaged avoidance and non-market revealed preference models, travel costs, random utility modeling, and hedonic pricing. He notes the need for biophysical data that can be translated into indicators that can be meaningfully valued by people.