Chapter

The Theory and Measurement of Passive‐Use Value

Richard T. Carson, Nicholas E. Flores and Robert C. Mitchell

in Valuing Environmental Preferences

Published in print November 2001 | ISBN: 9780199248919
Published online November 2003 | e-ISBN: 9780191595950 | DOI: http://dx.doi.org/10.1093/0199248915.003.0004
 The Theory and Measurement of Passive‐Use Value

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An attempt is made to disentangle passive‐use value and contingent valuation and present them in a useful perspective as regards environmental goods. The first part of the chapter provides a theoretical exposition of passive‐use value – defined as value oriented towards the researcher in that it relates to what is potentially observable or estimable. The approach taken differs from earlier definitions that rely on motives. In the second main part of the chapter, six issues are addressed concerning the measurement of total value that are frequently advanced as criticisms of contingent valuation and are thought to be related to passive‐use value. These are commodity valuation; the effect of different means of project provision and payment aspects on the value of goods; resource familiarity; the claim that passive‐use values are an issue only in cases of irreversible changes to unique resources; how to deal with substitutes in a valuation analysis; and the incentive compatibility structures of contingent valuation questions.

Keywords: commodity valuation; contingent valuation; environmental goods; incentive compatibility structures; irreversible change; measurement of passive‐use value; passive‐use value; resource familiarity; total value

Chapter.  16696 words. 

Subjects: Economic Development and Growth

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