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Valuing Externalities of Watershed Restoration and Erosion Control Projects in Mediterranean Basins: A Comparative Analysis of the Contingent Valuation and Replacement Cost Methods

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  • Saez, Maria Del Carmen Almansa
  • Calatrava-Requena, Javier

Abstract

The methodology used for Economic Valuation of the Externalities generated by the Watershead Restoration and Erosion Control Projects in the Hydrographic Basins of the Mediterranean Slope, is based on the Replacement Cost Method. Environmental Economics, however, today offer us other methodological possibilities, whose application to the valuation of this type of project may prove to be of interest. It is the case of the Contingent Valuation Method used for the evaluation of the effects of the Watershead Restoration and Erosion Control Projects of the Aljibe Basin (Almería) Spain, presented here. The results obtained show that, in this case study, application of Contingent Valuation ascribes greater social profitability of the project, with 5.23 % of IRR (Internal Rate of Return), compared to the value obtained using classic methodology of 2.25%, thus enabling us to draw closer to the true socio-environmental value of this type of project. In any case, both possibilities rather than alternatives can be considered as complementary, by focusing on the valuation from different perspectives.

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  • Saez, Maria Del Carmen Almansa & Calatrava-Requena, Javier, 2002. "Valuing Externalities of Watershed Restoration and Erosion Control Projects in Mediterranean Basins: A Comparative Analysis of the Contingent Valuation and Replacement Cost Methods," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24847, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae02:24847
    DOI: 10.22004/ag.econ.24847
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    1. Bergstrom, John C. & Dillman, B. L. & Stoll, John R., 1985. "Public Environmental Amenity Benefits of Private Land: The Case of Prime Agricultural Land," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(1), pages 139-149, July.
    2. Pruckner, Gerald J, 1995. "Agricultural Landscape Cultivation in Austria: An Application of the CVM," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 22(2), pages 173-190.
    3. Kevin J. Boyle & F. Reed Johnson & Daniel W. McCollum & William H. Desvousges & Richard W. Dunford & Sara P. Hudson, 1996. "Valuing Public Goods: Discrete versus Continuous Contingent-Valuation Responses," Land Economics, University of Wisconsin Press, vol. 72(3), pages 381-396.
    4. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
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    1. Almansa Sáez, Carmen & Calatrava Requena, Javier, 2007. "La Problemática Del Descuento En La Evaluación Económica De Proyectos Con Impacto Intergeneracional: Tasa Ambiental Crítica Y Montante De Transferencia Intergeneracional/Discounting In The Context Of ," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 25, pages 165-198, Abril.

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