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Chapter 6: VALUING THE ENVIRONMENT - Coggle Diagram
Chapter 6:
VALUING THE ENVIRONMENT
Why Value?
Types of
Economic Value
Use/Active
Non-Use/ Passive
Market-Based Valuation
Shadow prices
Indirect Methods
(Indirect Prices)
Hedonic Pricing
Travel Cost
Contingent Valuation
Hypothetical market, WTP surveys
Steps
WTP Formats
Limits
Empirical Evidence
Price Concepts compared
Shadow Price
Indirect Price
Contingent Cost
Measuring Costs
Opportunity Costs
Regulation
Behavioral Adjustment
Consumer Welfare Loss
Net Social Value
NSV = TB − TC
Positive NSV → society better off
Intertemporal Valuation
Lifetime economic resources
→ present value of future benefits
Hotelling rule
Uncertainty diagram → risk-adjusted rents
Real-world deviations
: shale oil, 1974 oil crisis, copper
SCARCITY
Mayflower Example
Inverted U-curve of prices → prices reflect the past
types
physical
economic
instituional
models
MALTHUSIAN
(
absolute
: stock & flow)
RICARDIAN
(
relative
: rising MC, technology helps)
Scarcity rent within unit cost
LIMITS of Monetary Valuation