Introduction to Non-Market Goods Valuation
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Freeman, A. M. 2003. The Measurement of Environmental and Resource Values: Theory and Methods. Washington, Resources for the Future. Second Edition.

This book provides a detailed review and explanation of the concepts and methods of measuring the value of non-market environmental and resource values. The concept of resource values as shadow prices is explored as well as the concept of defining and measuring welfare changes. Various measurement techniques are reviewed such as revealed preference methods, stated preference methods, property value models and hedonic wage models.

Sinclair, M. T. and M. Stabler. 1997. Environmental Valuation and Sustainability. In The Economics of Tourism. New York, Routledge: 182-213.

This book chapter deals with the concept of the valuation of non-market goods in the context of sustainability in tourism. It discusses three main methods it describes as dominating the field: hedonic pricing; travel cost method; and contingent valuation. Other methods of valuation include: production function method; Dose-response functions; avoided cost method; opportunity cost; replacement cost; provision cost and the Delphi technique. The chapter concludes with an examination of the various policy and price-based instruments available for dealing with these non-market goods.

Dwyer, L. and P. Forsyth. 1997. "Measuring the Benefits and Yield from Foreign Tourism." International Journal of Social Economics 24(1/2/3):223-236.

This paper explores the issues associated with measuring tourism yield in the international tourism sector. While it is theoretically possible to calculate tourism yield by measuring all cost and benefits of the tourism sector, it is not possible on the basis of currently available information. The best overall indicator appears to be net domestic tourist expenditure (total expenditure less leakages on imports). Further analysis may make it possible to distinguish different externality impacts, taxed paid and terms of trade effects, although it is not clear the the differences would be significant.

Marcouiller, D. W. and S. C. Deller. 1997. "Natural Resource Stocks, Flows, and Regional Economic Change: Seeing the Forest and the Trees." Journal of Regional Analysis and Policy 26(2):95-116.

The use of regional science and its corresponding tools to examine issues affecting natural resource-dependent regions are reviewed and critiqued. Particular attention is drawn to the increased importance of non-market uses of these natural resources. The authors suggest that because most regional science tools are market-based, the increased importance of non-market uses of these resources is overlooked in policy analysis. In addition to reviewing this issue, the authors outline a method to explicitly capture the non-market aspects of natural resources within a regional economic model.

Smith, S. L. J. 1995. Shadow Prices and Non-Market Valuation. In Tourism Analysis: A Handbook. Essex, Longman Group Limited. Second Edition: 250-272.

This chapter deals with the valuation of non-market goods using the expression of willingness of travelers to pay for either the continued access to that resource or for some degree of enhancement. The concept of consumer surplus - the amount a user is willing to pay above and beyond the current cost - is also reviewed and its use in evaluating the real or potential benefits derived from improvements or additions to tourism development. This chapter reviews the willingness to pay estimation methods that ask users directly - contingent valuation method - or determine values through an inferred method - travel cost method or travel savings method.

Smeral, E. 1994. Measuring and Managing the Demand for Public Resources. Tourism Marketing and Management Handbook. Stephen F. Witt and Luiz Moutinho (ed.), New York, Prentice Hall Second Edition: 510-515.

The chapter reviews the effects of the inability of the market to price the public and natural resources that are often largely responsible for tourism demand. Environmental damage is caused by tourism demand because the public resources utilized as part of the tourism supply are too cheap or even free, resulting in a tendency towards excess demand. The chapter explores the concept of willingness to pay, the measure for pricing these non-market goods, and the two principle methods to measure willingness to pay: the travel cost method and contingent value method. The chapter concludes with a look at various strategies for managing tourism demand.

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