Adam Snyder's Environmental Economics

Environmental Economics

The Difficulties of Assigning Values to non market values

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In class on Wednesday we discussed three different types of Non-market benefits; use value, option value, and passive use value. Each of these is a way to establish a dollar cost for things that do not actually a market value for them. Use value is when we come to a dollar value based on the value of its use. Option value is the dollar cost comes from the option of having that thing in the future. Passive value is coming to a dollar value based on having the good even if they never use it. These prices can actually be measured using polling and asking people for real values.

However I believe that these definitions lead to some grey areas. For instance, what about national parks? National parks have value in all three categories. Use value could be the economic benefits from the park rangers having jobs. The option value could be having the future benefits of cleaner air that trees make for your children in the future. The passive use value could be just being proud that your country has created a national park system, and that you’d be upset if they were all demolished. This goes to show that although polling might work, it could never cover all of the values, and that could lead to a juristically different value because there is so much grey area when measuring values

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