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A Review of Economic Appraisal of Environmental Goods and Services: With a Focus on Developing Countries

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  • Hearne, Robert R.

Abstract

Environmental economics has an extensive literature on procedures for placing economic values on the environment. Most of these methodologies have been developed and refined in the context of developed countries, where high levels of disposable income allow for a high demand for environmental amenities and a willingness to pay for non-use values. This paper argues that the applicability of these methodologies may be limited in developing countries. A microeconomic model, designed to highlight the different roles of environmental goods and services in developed and developing counties, is presented. In developing countries the value of environmental amenities is relatively less important than the value of environmental resources in the production process. The use of the procedures to estimate the value of environmental services in production should be respected, promoted and refined, particularly in light of widespread market failure in developing countries.

Suggested Citation

  • Hearne, Robert R., 1996. "A Review of Economic Appraisal of Environmental Goods and Services: With a Focus on Developing Countries," Discussion Papers 24144, International Institute for Environment and Development, Environmental Economics Programme.
    • Handle: RePEc:ags:iieddp:24144
    DOI: 10.22004/ag.econ.24144
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    References listed on IDEAS

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    2. Langford, Ian H. & Bateman, Ian J., 1996. "Elicitation and truncation effects in contingent valuation studies," Ecological Economics, Elsevier, vol. 19(3), pages 265-267, December.
    3. Whittington, Dale & Lauria, Donald T. & Mu, Xinming, 1991. "A study of water vending and willingness to pay for water in Onitsha, Nigeria," World Development, Elsevier, vol. 19(2-3), pages 179-198.
    4. Peter Abelson, 1996. "Project Appraisal and Valuation of the Environment," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-37474-4, March.
    5. Peter Abelson, 1996. "Valuation Methods for the Environment," Palgrave Macmillan Books, in: Project Appraisal and Valuation of the Environment, chapter 4, pages 57-87, Palgrave Macmillan.
    6. Munasinghe, M., 1993. "Environmental Economics and Sustainable Development," Papers 3, World Bank - The World Bank Environment Paper.
    7. Echeverria, Jaime & Hanrahan, Michael & Solorzano, Raul, 1995. "Valuation of non-priced amenities provided by the biological resources within the Monteverde Cloud Forest Preserve, Costa Rica," Ecological Economics, Elsevier, vol. 13(1), pages 43-52, April.
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    Cited by:

    1. Cavatassi, Romina, 2004. "Valuation methods for environmental benefits in forestry and watershed investment projects," ESA Working Papers 23799, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).

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