The Definition and Choice of Environmental Commodities for Nonmarket Valuation

60 Pages Posted: 29 Sep 2009

See all articles by James Boyd

James Boyd

Resources for the Future

Alan Krupnick

Resources for the Future

Date Written: September 17, 2009

Abstract

Economic analyses of nature must somehow define the “environmental commodities” to which values are attached. This paper articulates a set of principles to guide the choice and interpretation of nonmarket commodities. We describe how complex natural systems can be decomposed consistent with what can be called “ecological production theory.” Ecological production theory - like conventional production theory - distinguishes between biophysical inputs, process, and outputs. We argue that a systems approach to the decomposition and presentation of natural commodities can inform and possibly improve the validity of nonmarket environmental valuation studies. We raise concerns about the interpretation, usefulness, and accuracy of benefit estimates derived without reference to ecological production theory.

Keywords: nonmarket valuation, stated preference, revealed preference, commodities, endpoints

JEL Classification: Q30, Q51, Q57

Suggested Citation

Boyd, James William and Krupnick, Alan, The Definition and Choice of Environmental Commodities for Nonmarket Valuation (September 17, 2009). Available at SSRN: https://ssrn.com/abstract=1479820 or http://dx.doi.org/10.2139/ssrn.1479820

James William Boyd (Contact Author)

Resources for the Future ( email )

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Alan Krupnick

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

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