Environmental Engineering Reference
In-Depth Information
parks, and to this end, it has been widely used in the USA and to a lesser extent the
UK (Perrings
1995)
. The underlying assumption of the TCM is that the incurred
costs of visiting a national park, nature reserve, open space or any other recreational
site are directly related to the benefits individuals derive from the amenities within
the area, such as hiking, camping, fishing, bird watching and, swimming. The method
involves using the value of time spent in travelling, the cost of travel (e.g., petrol
costs) and entrance and other site fees as a proxy for computing the demand
price of the environmental resource. Because TCM is primarily concerned with
recreation and tourism values, the application of the method for quantifying
agro-biodiversity values is rather limited. That is, the method is well suited to
assessing values related to leisure and recreation in agricultural landscapes, but it is
incapable of assessing other agro-biodiversity values, such as water and air quality
or the role of bee species in crop pollination.
Hedonic Pricing Method
The hedonic pricing method (HPM) derives the value of environmental amenities,
such as pollution and noise level, from actual market prices of some private goods.
Just like the travel cost method, the HPM is based on observed behaviour. By far
the most common application of HPM is to the real estate market. House prices are
affected by many factors, not only by house characteristics like the number of
rooms and the size of the garden, but also by the environmental quality of the
surroundings, including proximity to natural areas and the quality and uniqueness
of such areas. If the non-environmental factors can be controlled for, then the
remaining differences in real estate prices are expected to be the result of environ-
mental differences (Turner et al.
1994)
. HPM is suitable for the estimation of
changes in water and air quality, but is especially appropriate for assessing noise and
air pollution (from activities such as large agricultural machinery, landfilling or
transport of waste) (Spash and Carter
2002)
.
Contingent Valuation Method
TCM and HPM are both revealed preference methods. A common problem with
these methods is that in the absence of appropriate data or interdependent market
goods, assessing the value of agro-biodiversity is either not possible or will lead to
spurious results. Stated preference methods bypass the need to refer to market
prices by asking people directly what their willingness to pay (WTP) for a change
in environmental quality or biodiversity is. This requires the presentation of a
change scenario, for example the loss of bee colonies, a decline in farmland bird
species, or the conversion of agricultural land into urban land. The contingent
valuation method (CVM) is the most used stated preference method: there are now
thousands of papers and studies dealing with the topic (Carson
2000
; for an
overview of 50 years of CVM, see Smith
2004)
. CVM has been used extensively
