Economic Valuation

EC O L O G IC A L E C O N O M IC S 6 7 ( 2 0 08 ) 21 7 2 31
a v a i l a b l e a t w w w. s c i e n c e d i r e c t . c o m
w w w. e l s e v i e r. c o m / l o c a t e / e c o l e c o n
Economic valuation of biodiversity: A comparative study

Peter Nijkampa , Gabriella Vindignib , Paulo A.L.D. Nunesc,
a
Free University, Department of Economics, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands
University of Catania, DISEAE, Via Santa Sofia, 98, 95123 Catania, Italy
c
University of Venice, Department of Economics and Foundazione Eni Enrico Mattei, Palazzo Querini Stampalia, 30122 Venice, Italy
b
AR TIC LE I N FO
ABS TR ACT
Article history:
In recent years, an intensive debate on the economic valuation of biodiversity has entered
Received 23 June 2007
the environmental-economics literature. The present paper seeks to offer first a critical
Received in revised form
review of key concepts that are essential for a proper understanding of such evaluation
27 February 2008
issues. Particular attention is given here to various monetary valuation approaches and to
Accepted 5 March 2008
comparative (i.e., meta-analytical) methods from the perspective of conservation and
Available online 4 July 2008
sustainable use of biodiversity. Several illustrative examples are presented in order to

highlight the usefulness of the various approaches discussed. Next, an attempt is made to
Keywords:
infer general findings and lessons from past applied research by means of meta-analysis. In
Meta-analysis
this context, a multi-dimensional technique originating from the field of artificial
Biodiversity values
intelligence is deployed. It allows us to identify the most important variables responsible
Policy formulation
for changes in economic estimates of biodiversity.
Non-market valuation methods
2008 Elsevier B.V. All rights reserved.
Market valuation methods

Benefit transfer
1.
Introduction
Biodiversity requires our attention for two reasons. First, it

provides a wide range of indirect benefits to humans. Second,
human activities have been contributing to unprecedented
rates of biodiversity loss, which threaten the stability of
ecosystems in terms of their provision of goods and services to
humans. Consequently, in recent years many studies of
biodiversity and its loss have appeared. This article critically
evaluates the application of economic valuation methods for
the assessment of monetary values for biodiversity benefits.
Particular attention is given to comparative (i.e. meta-analytical) methods as an alternative valuation approach to the well
known, and often costly, non-market methods. Finally, an
attempt is made to infer general findings and lessons from
available valuation studies by means of meta-analysis, as far
as they address similar issues. In this context, a multidimensional technique originating from the field of artificial
intelligence is deployed. Estimation results allow us to identify
the most important variables responsible for changes in
economic estimates of biodiversity.
The organization of the article is as follows. Section 2
discusses the challenge that comparative research is able to
put forward in the field of economic valuation of environmental quality, in general, and biodiversity in particular.
Section 3 offers a classification of biodiversity value, characterizing the approach adopted in the evaluation here
offered, i.e. economic approach. Section 4 critically evaluates
the use of the economic approach to the valuation of
biodiversity and its wide range of revealed and stated
preference methods. Section 5 shows an empirical attempt
to infer general findings and lessons from past applied
Corresponding author.
E-mail addresses: pnijkamp@feweb.vu.nl (P. Nijkamp), vindigni@mbox.unict.it (G. Vindigni), pnunes@unive.it,
federica.piovesan@feem.it (P.A.L.D. Nunes).
0921-8009/$ see front matter 2008 Elsevier B.V. All rights reserved.
doi:10.1016/j.ecolecon.2008.03.003
218
EC O LO GIC A L E CO N O M ICS 6 7 ( 2 00 8 ) 2 1 7 2 31
research by means of meta-analysis, discusses the range of

empirical findings and evaluates their basis against the earlier
presented framework. Section 6 concludes.
2.
Biodiversity as a comparative
research challenge
In recent years, the awareness has grown that biological
diversity is of critical importance for the stability of the earth's
ecosystem, as it forms the base for sustainable functions of
natural systems. In addition, it also offers a great potential for
human use (such as recreation or scientific research) (ten Kate
and Laird, 2004). Biodiversity may reflect a great variety of
appearances depending on specific geophysical and climatological conditions. For example, European ecosystems encompass more than 2500 habitat types and 215,000 species
(Stanners and Bourdeau, 1995). Biodiversity has both quantitative and qualitative characteristics. It is generally accepted
that biodiversity cannot exclusively be expressed in numbers,
as it also depends on the ecological structure of a whole area. It
is nowadays broadly recognized that human activities are
adversely affecting the earth's biological diversity, as a result
of prevailing production and consumption patterns and of
land use changes (cf. van Kooten et al., 2000). Consequently,
biodiversity tends to become a scarce economic good, for
which however a proper pricing system does not exist. In the
past years, research on the economic valuation of living
natural resources and also of biodiversity has shown a
significant progress, but there is certainly not yet an established framework for valuing biological variety. Apart from the
lack of a solid economic valuation mechanism for biological
diversity, there is also a serious lack of reliable and up-to-date
information and monitoring systems with a sufficient geographical detail on biodiversity. Clearly, studies on biodiversity require a pluridisciplinary approach (see also Cattizone,
1999). Any economic approach to biodiversity is therefore, by
definition, limited and partial in nature (see e.g. Pearce and
Moran, 1994; Barbier et al., 1995). Although various approaches
deploy contingent valuation methods, it ought to be recognized that this class of methods may certainly be helpful in
assessing the use value of biodiversity, but has serious
shortcomings in case of non-use values such as bequest and
existence values (see also Desaigues and Ami, 2001).
The economic valuation of natural resources, in general,
and biodiversity, in particular, is among the most pressing and
challenging issues confronting today's environmental economists. Economists value biodiversity because valuation allows
for a direct comparison with economic values of alternative
options, a corner stone for any cost-benefit analysis exercise.
In addition, the monetary valuation of biodiversity allows
economists to perform environmental accounting, natural
resource damage assessment, and to carry out benefit assessment. Valuation is also essential in the research of individual
consumer behaviour. It indicates the opinion of individual
consumers about certain biodiversity management objectives
and identifies individual consumer motivations with respect
to biodiversity conservation.
Despite some flaws in economic valuation approaches to
biodiversity, there is a clear need to continue with developing
rigorous valuation tools in order to cope with complicated

trade-offs in environmental policy analysis in the context of
sustainable development initiatives and emerging policies
which take explicitly account of the variety in the earth's
ecosystem. The current biodiversity conservation programmes
in various countries require for their implementation considerable financial expenditures, which have to be traded-off
against alternative uses. Although world-wide much progress
has been made in identifying and prioritising such programmes, innovative valuation strategies are still needed to
generate additional information in order to support the actions
advocated in Agenda 21 of the 1992's Earth Summit United
Nations Conference in Rio, Brazil. Biodiversity conservation
programme funds have, in general, a rather poor underpinning
and are not based on solid and explicit economic choice
mechanisms. The reasons for this are manifold, but in general
they are due to insufficient information on a given biodiversity
issue as well as on undefined property rights, high transaction
costs, divergence between private and social costs, inappropriate economic instruments and bureaucratic inertia of relevant
political institutions. Public authority choices concerning
biodiversity preservation programmes should ideally be
based on sound economic principles and information, such
as fair market prices, benefits of specific biodiversity policies
and cost-opportunities of alternative decisions.
There is a growing awareness that biodiversity conservation programmes may generate many social benefits but
sometimes at high costs, in particular in terms of management
and information gathering. Against this background, many
efficiency problems and fair public funds allocation issues
have arisen. Although general information about biodiversity
programmes is available through traditional policy channels, it
is challenging to allocate and manage biodiversity funds
adequately from the perspective of the non-market value of
environmental resources. In order to obtain a balanced tradeoff between programme costs and benefits, it is necessary to
optimise an efficient use of the information available (van den
Bergh et al., 1999). Fortunately, the number of studies
concerning monetary biodiversity evaluation is quickly growing. Consequently, there is the need to deploy and develop
adjusted methodologies and analysis instruments that can
improve our understanding of economic biodiversity values
and, concurrently, that would allow for a more accurate
forecast of biodiversity values. Comparative analysis of many
case studies is a key for enhancing an understanding.
The ecological economics of biodiversity centres around the
crossroads of natural and human values of ecosystems. In
addition to an analysis of methodological complexities, there is
also a need to draw policy lessons and general findings from
past applied research. The large number of applied economic
valuation studies currently available has induced the search for
commonalities and contrasts in different empirical investigations and has also induced the current popularity of metaanalysis and value transfer. In particular, in recent years we
have seen a rising number of publications on the economic
aspects of biodiversity, both theoretical and empirical. This
prompts the intriguing question of whether more general
valuation conclusions might be inferred from a set of specific
empirical investigations on closely related research themes or
issues in the area of biodiversity. Meta-analysis has originally
been developed in the context of the natural sciences (in

particular, in medical sciences) as a statistical tool for developing comparative studies and for creating synthetic knowledge
from controlled experimentation studies (see Florax et al., 2002
for a detailed review). More recently, meta-analysis has been
diffused to the social sciences, including psychology, sociology
and economics. This has generated a new stream of quantitative research seeking for a synthesis of scientific results based
on statistical applied analysis. The application of conventional
statistical methods in meta-analysis is particularly appropriate,
when the study focuses on identifying common trends and
relationships between the variables under investigation. The
methods are also appropriate for the construction of synthetic
indicators and the determination of parameters or other
common elements that can be described in quantitative terms
(more details can inter alia be found in Hedges and Olkin, 1985;
Hunter and Schmidt, 1990; Wolf, 1986).
In recent years, meta-analysis has proven to be a research
instrument of great potential for research synthesis of
previously undertaken case studies. The main objective of
modern meta-analysis is to synthesize in quantitative terms
the empirical results obtained from different studies on a predetermined field or topic of research. Although of great
interest and potentiality, this analysis instrument is of
considerable methodological complexity. In particular, it is
characterized by a high degree of transversality, both horizontal and vertical. Transversality refers to both the heterogeneous nature of the studies and the heterogeneous nature
of the different empirical processes and/or the diverse
evaluation approaches of policies in the selected studies.
Therefore, this analysis instrument requires the identification
and the selection of comparable empirical case studies as well
as the statistical application of comparative analyses by
means of appropriate technical research methods (horizontal
transversality). Moreover, it also needs the adoption of a
vertical perspective in terms of the description of the problem studied, the objective of the study, and the utilization of
the results obtained (Matarazzo and Nijkamp, 1997).
The intrinsic methodological complexity of meta-analysis
becomes particularly obvious when transferring applications
from the field of natural sciences to the field of social sciences,
in particular in the area of environmental economics. In this
field, the causeeffect relations are often characterized by
uncertainty, since social phenomena are influenced by individual behaviour (limited rationality, subjective preferences,
rigidity in behaviour etc.) and by the adoption of specific
multi-faceted policies (Munda et al., 1995).
Variations in comparable case studies can thus be attributed to the various dimensions of the studies, time and space
factors, the presence of a number of determining factors (i.e.,
moderator variables), and finally by variation in time in regard
to the policy effects to be expected. This is closely linked to the
fact that in the social sciences it is only possible to speak of
quasi-experiments and quasi-scientifically methods (Button and Jongma, 1995).
For this reason, it is not always possible or methodologically
correct to apply standard statistical methods in meta-analysis:
the absence of general laws and the difficulty to generate
random, independent and equaldimensional samples render
the use of descriptive statistics and classical Bayesian inference
219
methods difficult. Therefore, the use of specific procedures and

of new instruments of analysis becomes increasingly necessary.
The goal of this paper is to propose an operational methodological framework to support decision-makers in synthesizing
information concerning the economic value of biodiversity conservation studies. This study reviews economic and other
values ascribed to biodiversity as well as related evaluation
methods. The focus is in particular on the issues associated with
a multi-dimensional evaluation of biodiversity, i.e. connections
between economic and non-economic valuation. However, a
clear economic foundation in assessing the loss of biodiversity
is still missing, but is certainly a potentially promising tool for
coping with this loss. The case study approach developed here is
constructed in order to illustrate some recent issues in metaanalysis. It deals in particular with rough set theory based
approaches to decision rules induction for examining different
price attributes to biodiversity conservation programmes. A
discussion on different approaches of decision rules induction
(i.e., conditional predictions) will be presented and extended to a
small illustrative example of a set of studies characterized by the
use of contingent valuation methods. The main aim is here to
find rules that determine whether an object (a study) belongs to
a particular subset called a decision class (i.e., a numerical range
of monetary values of a given biodiversity conservation plan).
These technicalities will be further discussed in Section 2.
3.
Meta-analytical methods for comparative
biodiversity valuation
3.1.
Prefatory remarks
Meta-analysis refers to the use of quantitative methods mainly

statistical that can be deployed for the comparison or
synthesis of outcomes from a set of empirical investigations
on a common, or largely similar, issue (Stanley and Jarrell, 1989;
Cooper and Hedges, 1994). In contrast, value transfer aims to
develop a quantitative framework for the transferability of value
(or benefit) estimates for policy decisions. Recently, many
efforts are undertaken to carry out comparative studies using
a framework offered by meta-analysis and value transfer (for a
survey, see van den Bergh et al., 1997). In this context, applied
environmental-economic research has in recent years proposed
to develop a test on value transfer by conducting two parallel
case studies with the aim of deriving non-market environmental values and comparing them with the obtained results
(see Bergland et al., 1995; Kirchhoff et al., 1997; Bateman et al.,
1995). Besides the case study approach used to obtain the
required values for value transfer purposes, statistical methods
based on meta-analysis can be used to obtain quasi-estimations
of non-market values (see van den Bergh and Button, 1999).
Thus, comparative studies seem to cover new ground in
economics, in general, and in environmental economics, in
particular.
Meta-analysis clearly has many advantages in applied
quantitative research. It avoids the need to develop a costly
and new methodological basis for new case studies, as far as
they address similar issues related to past studies. It allows
for the statistical identification of major driving factors in
causal relationships and can also act as a robustness check on
220
existing studies. In the context of value transfer, such research

synthesis experiments also offer operational frameworks for
making conditional forecasts. In the present section we will
offer a slightly more extensive review of meta-analytical
methods for research comparison.
3.2.
Statistical techniques
Meta-analytical methods have gained much popularity, not

only in the context of research synthesis of previous case study
surveys, but also as a tool for comparative case study research
and benefit transfer in case of uncertain outcomes in different
situations. In recent years, meta-analysis has seen many
applications in environmental economics, particularly in
studies that have performed monetary valuations of environmental goods see Table 1 for some examples.
A variety of statistical methods has been applied in order to
compare outcomes from different methods on a given issue
(van den Bergh et al., 1997; Florax et al., 2002). In general,
different outcomes from various studies can be explained by
differences in the formulation of the research, the size and
type of data analyzed, the statistical methods applied, the
publication bias, and temporal and geographical characteristics of the studies under consideration. The use of (quantitative
and qualitative) multi-criteria techniques is of great importance, when the objective of the synthesis is the qualitative
comparison of studies and when the result of studies can be
interpreted in terms of compliance with desirable criteria.
The application of these methods is especially important when
the studies do not provide one simple value per indicator or
when the analysis focuses on a number of indicators. In
principle, meta-analytical methods are able to encapsulate
these multi-dimensional components.
3.3.
Alternative techniques
3.3.1.
Introduction
Meta-analysis comprises not only the class of quantitativestatistical techniques for synthesizing research outcomes, but
also may also concern numerical methods for dealing with

categorical data. The format of study findings and the
objective of synthesis in many areas of the social sciences,
including economics, are not exclusively based on an experimental investigation of empirical phenomena (van den Bergh
et al., 1997). As a result, over the past decades several new
non-statistical methods that synthesize study findings from
many areas of the social sciences have been developed.
Complementary non-statistical or non-parametric statistical
techniques used for synthesis can be classified into main
categories, in particular: (1) rough set analysis; (2) fuzzy set
analysis; and (3) content analysis. These tools appear to be
promising for drawing quantitative inferences, even on the
basis of a collection of qualitative study findings (Hogenraad,
1989). We will offer here a concise introduction and discussion
of these complementary meta-analytical methods.
3.3.2.
Rough set analysis
Rough set analysis developed by Pawlak (1982) is the most

suitable technique for synthesis when the studies are to be
grouped and classified according to numerical characteristics
that are imprecisely measured. This analysis originates from
artificial intelligence and aims to pinpoint data regularities
that are not immediately evident; it searches for the possible
existence of the principle of causality among data sets and
attempts to eliminate irrelevant information. An important
feature of this synthesis technique is that it does not
necessarily require numerical information about the data
being used, provided it is classified in distinct groups. In this
way it is able to synthesize a mixture of classified qualitative
and quantitative data as well as to combine study findings that
are subject to inconsistencies and inaccuracy (Pawlak, 1982;
Slowinski and Stefanowski, 1989). In fact, rough set theory also
has the advantage that it is able to create a ranking of actions in
multi-attribute decision support processes (van den Bergh
et al., 1997). Given its features, it is clear that rough set analysis
is a readily applicable synthesis technique for decision-making
processes that deal with a large input of similar study findings.
Several software packages are at present available.
Table 1 Applications of meta-analysis

Subject area
Urban pollution valuation
Recreation benefits
Recreational fishing
Water quality
Valuation of life estimates
Contingent valuation versus revealed preference
Wetlands valuation
Noise nuisance
Travel congestion
Visibility improvement
Transport issues
Multiplier effects of tourism
Price elasticity of demand and travel cost
Price elasticity of gasoline demand
Valuing morbidity
Forest ecosystem services
Source: Nunes et al. (2004), adapted.
Studies
Smith (1989), Smith and Huang (1993), Smith and Huang
(1995), Schwartz (1994), van den Bergh et al. (1997)
Smith and Kaoru (1990a), Walsh et al. (1989a,b)
Sturtevant et al. (1995)
Magnussen (1993)
van den Bergh et al. (1997)
Carson et al. (1996)
Brouwer et al. (1999), Woodward and Wui (2001)
Nelson (1980), Button (1995), Schipper (1996)
Waters (1993)
Smith and Osborne (1996)
Button (1995), Button and Kerr (1996)
Nijkamp and Baaijens (2001)
Smith and Kaoru (1990b)
Espey (1996)
Johnson et al., (1996)
Markandya et al. (2008)
3.3.3.
Fuzzy set analysis
Fuzzy set analysis is applicable for the analysis of the same

category of issues as rough set analysis. However, it is the most
suitable technique for synthesis, whenever study findings contain a clear component of linguistic uncertainty in terms of imprecise measurement (see, for example, Kacprzyk, 1978; Munda
et al., 1993). As Dubois and Prade (1992) have demonstrated the
distinction between fuzzy set analysis and rough set analysis is
more subtle than is commonly expected. For example, instead of
the discrete classes used in rough set analysis, fuzzy set analysis
employs a continuous classification scale. Fuzzy sets refer to
linguistically defined variables that do not have an unambiguous
measurement scale. Fuzzy variables can be categorized into
classes for which the boundaries are weakly demarcated, so that
variables can belong to these classes with some degree of
membership. A good example of the use of fuzzy set theory in
environmental quality valuation can be found in Munda (1995),
who also developed the NAIADE software package.
3.3.4.
Content analysis
Content analysis is a method for making inferences by

identifying characteristics of text messages in a systematic
way in order to convert the text message into distinct classes
that can be studied with the use of quantitative methods.
Therefore, this synthesis technique is able to consider
simultaneously the dynamic context of cultural, social,
economic and political factors. Content analysis is able to
synthesize all kinds of verbal messages and texts by means of
quantitative methods, concluding a mapping of specific types
of words in a text into fewer content categories. Besides
coding, sophisticated computer software can be used, such as
the LISREL econometric package (see Weber, 1983). It is clear
that a collection of published study findings from previously
undertaken case studies rather than a single text may serve as
the basis for content analysis. Many interesting applications
can be thought of such as newspapers, Internet sites, and
scientific magazines. Even when we limit ourselves to the
social sciences, a wide range of application possibilities can be
observed. According to Weber (1983, p. 128), in general, social
scientists will be able to use computer-aided content analysis
with greater confidence to address a wide variety of theoretical problems involving the relationships among cultural,
social, economic and political change. As Weber (1983) points
out, content analysis is not only capable of considering mutual
socio-economic relationships but also their dynamic aspects,
which are highly useful in economic research. In particular,
content analysis can be used to generate a flow of benefits
over time and to compute net present values, which can serve
as a value relating to a particular scenario of ecosystem
change or management. Studies that consider these features
of content analysis are, for example, Namenwirth (1969) and
Rosengren (1981). These show the existence of a strong
relationship over time between political statements and the
state of the economy. It is clear that content analysis is also a
powerful tool to extract quantitative or coded information
from qualitative data input.
3.3.5.
Value transfer
In the context of ecosystem and biodiversity valuation, the

general idea is to explore the use of previous and original
221
valuation studies (study site) and to transfer their estimates' values to the site where the new value estimate is
needed (policy site) see Brouwer et al. (1999); and Navrud
and Bergland (2001). Value transfer brings up an important
research question: which lessons can be drawn from a
comparative analysis of monetary estimates derived from
earlier empirical studies for an additional similar case not
included in the meta-sample? The solution is to perform
essentially a meta-analysis, and to use the estimation
results for a prediction of the new or as yet unknown
empirical case. In economics, value transfer can be applied
across different sites spatial value transfer or, for one
specific site or valuation object over time temporal
valuation transfer.
A major advantage of value transfer for policy guidance is
that it ensures more comparability and consistency across
different evaluation studies. It may also be helpful in an initial
screening of a large number of public projects that cannot be
investigated in full detail. Furthermore, the outcome of a
previous study may be used as a benchmark against which
results of studies can be evaluated. But the most important
advantage of benefit transfer is that it is a cost-effective way to
make quantitative statements about phenomena that have
not been subject to previous analysis (see Johnson and Button,
1997).
In empirical research, two value transfer approaches are
available: unit value transfer and function value transfer. Both
can be based on the principles of meta-analysis. The former
transfers mean monetary value estimates, for example, mean
willingness-to-pay, directly from the study site to the policy
site, with possible income adjustments. The latter, instead of
transferring individual willingness-to-pay estimates, explores
the use of more information, such as characteristics of the
object of valuation and the subject who performs the
valuation exercise, and it is able to generate a benefit function
that allows prediction for the policy site. Examples of these
approaches can be found in income elasticity studies, savings
rate studies, consumer's surplus studies, accessibility studies,
value of time studies and evaluation studies on environmental decay. The implicit assumption is then, that the degree of
variation in estimated parameters is sufficiently small to be
able to deploy valuations from the original data in a given case
study to assess corresponding parameters from other similar
cases, usually in different contextual settings. Clearly, the
more uniform the set of previous studies, the more likely the
validity of the above implicit assumption (see Smith and
Kaoru, 1990a; Smith, 1992).
In conclusion, next to quantitative-statistical techniques
such as standard meta-regression analysis, there is a variety
of complementary methods which also offer a great potential
in research synthesis in the economic valuation of biodiversity. The application of these research synthesis techniques is,
however, anchored to a set of primary valuation studies
which, in turn, are exposed to some discussion. The central
problem refers to assessing the validity of value measures
obtained from any primary economic valuation method since
we observe an absence of an unambiguous clear criterion
against which to compare those measures. In fact, many
environmental goods and services, including biodiversity, are
not directly observable and consequently different factors
222
may cause differences in biodiversity estimation. In Section 3

we will address this discussion in detail.
perceive things. Something has a value if it contributes to the

welfare of someone. Therefore, goods do not have a value per
se, but their value is related to people's perceptions.
4.
Caveats in the use of the economic
approach for the valuation of biodiversity
4.2.
4.1.
Market and non-market approaches
Economic, monetary valuation of biodiversity can proceed in

different ways: using market price information and elicit
consumer's preferences using a wide range of non-market
valuation methods. Monetary indicators of biodiversity values
are based on market price valuation mechanisms such as the
value of the financial revenues from tourism activities related
to visits to natural areas and the value of contracts signed by
firms and governmental agencies, also known in the literature
as bioprospecting contracts. Such contracts are characterized
by the search among the genetic codes contained in living
organisms, for the development of chemical compounds of
commercial value, i.e. market priced value (Simpson et al.,
1996). This is dominated by pharmaceutical research since
most prescribed drugs are derived, or patented after natural
sources. In this context, the marginal value of such an input,
often translated in terms of genetic information for medicinal
purposes, is measured by its contribution to the improvement
of health care. Recent registrations and applications of
bioprospecting contracts and agreements between states and
pharmaceutical industries represent important benchmarks of
monetary indicators for these types of biodiversity values. The
most noted of these agreements is the pioneering venture
between Merck and Co., the world's largest pharmaceutical
firm, and Instituto National de Biodiversidad (INBio) in Costa
Rica. At the moment of the signature of the contract, in 1991,
Merck paid Costa Rica about 1 million dollars and agreed to pay
royalties whenever a new commercial product was explored.
Since then, INBio has signed contracts on the supply of genetic
resources with Bristol-Myers Squibb, other companies and
non-profit organizations (ten Kate and Laird, 1999; INBio, 2001).
Another illustration of the market value of genetic diversity
refers to the commercial agreement signed in 1997 between
Diversa, a San Diego based biotechnology, and the US National
Park Service. Diversa paid $175,000 for the right to conduct
research on heat-resistant microorganisms found in hot
springs in Yellowstone National Park (Sonner, 1998; Macilwain,
1998). More recently, a Brazilian company, Extracta, signed a
$3.2 million agreement with Glaxo Wellcome, the world's
second largest pharmaceutical company, to screen 30,000
samples of compounds of plant, fungus and bacterial origin
from several regions in the country (Bonalume and Dickson,
1999). Despite the fact that these agreements show a positive
economic value of genetic diversity, concern remains with
respect to the fairness of such deals. Indeed, some environmental groups have been very critical, claiming that these are
unequivocally biopiracy actions (see RAFI, 2001). In the
absence of market prices for biodiversity values which is
commonly the case different methods have been developed
to derive consumers' preferences these will be discussed in
detail in Section 4. However, value is a cultural and psychological concept, and is related to the question how human beings
A classification of biodiversity benefits
Independently of the valuation approach engaged, value

estimation is concerned with a change in people's welfare,
which stems from a change in the provision or enjoyment of
the good. This change may relate to the quantity of the good or
its quality, or to whichever characteristic of it (or even of a
related good). These changes may be marginal or discrete.
Prices reflect marginal changes; many valuation methods are
used to account for discrete changes. Values may thus be
expressed in marginal or discrete terms. Changes may of
course be positive or negative. When they refer to values, they
could reflect an increase or a decrease in welfare. Both can be
accounted for. Generally, it is expected that a loss of biological
diversity results in a decrease in welfare, and therefore in a
negative value expressed in monetary terms. Similar patterns
can also be observed for landscapes, although it is not as
straightforward, and it may vary more from person to person.
Once the physical change is identified, the value should reflect
the welfare change related to the individuals whose welfare
has been affected by it, or the average welfare change of the
individuals of the population (Riera, 2001).
It should be noted that biological diversity and in
particular the preservation of threatened species can affect
the welfare of many people, even living far away from the site
concerned. In other words, people may derive satisfaction out
of knowing that there is an improvement in biodiversity for
present and future generations, even if they would not benefit
from it directly. Therefore, the relevant population is often not
local, but global. These welfare gains are usually known as
passive or non-use values. The consideration of both use and
non-use values introduces the notion of total economic value. In
the literature, there is a wide range of systematization of the
total economic value of the environment.1 They differ both in
terms of the services included and in the terminological
definition. The total economic value (TEV) of a species or habitat
is constituted by a combination of the use value and non-use
value:
- The use value is a value related to the present or future use
of a particular habitat by individuals. It can be subdivided
into direct use values and indirect use values. Direct use values
are derived from the actual use of a resource either in a
consumptive way or a non-consumptive way (e.g., timber
in forest, recreation, fishing); indirect use values refer to the
benefits derived from ecosystem functions (e.g., watershed
protection or carbon sequestration by forests);
- The non-use values are associated with the benefits derived
simply from the knowledge that a natural resource such
1
A frequent question concerns how TEV is related to the notion
of intrinsic value. Intrinsic value is often regarded as a value that
resides in the assets in question, especially in the environmental
assets, but that is independent from human preferences. Since by
definition TEV relates to preferences of individual human beings,
it cannot encompass an intrinsic value (Pearce and Moran, 1994).
as species or habitat is maintained. By definition, such a

value is not associated with the use of the resource or the
tangible benefits deriving from its use. It can be subdivided
into two parts that overlap in relation to its definition. First,
there are existence values which are not connected to the
real or potential use of the good, but reflect a value that is
inherent in the fact that it will continue to exist independently from any possible present or future use of individuals. Secondly, bequest values are associated with the
benefits of the individuals derived from the awareness
that future generations may benefit from the use of
the resource. These can be altruistic values, when e.g. the
resource in question should in principle be available to
other individuals in the current generation.
223
economic relevance of non-market ecological functions. Farnworth et al. (1981) identified a value category, inherent value,
which was defined as values that support other values in
ecological systems. It includes natural processes of selection
and evolution and life support functions of ecosystems in an
all encompassing perspective.
Another category of value is the contributory value which
focuses on the fact that species can only survive in interactive
relationships and therefore each species contributes to the
survival of other species (Norton, 1986). Wood (1977) illustrates
the importance of the contributory value in the example of the
productive use of the wild species for the preservation of the
resistance of cultivated plants. Because of their limited genetic
diversity, cultivated plants can only perform minor adaptations to changes in environmental conditions. Wild species on
the other hand possess higher adaptability to environmental
conditions because of their higher genetic diversity. Thus, the
wild species forms the basis for preserving or improving the
resistance of cultivated plants against disease or pest, by
cross-breeding with wild species.
Finally, besides ecological values, psychological values are
gaining attention in the field of environmental psychology
(Boerwinkel, 1992; Nunes 2002; Nunes and Onofri, 2004). In this
field the concept of value is interpreted as a reason why people
feel that certain things are important (de Boer and Hisschemller, 1998). Examples of such values are justice, safety, and
beauty. While ecological values are meant to determine the
well functioning of a system, the psychological values are
used to determine the perceived quality or the perception of
nature. As such, the differences between ecological values and
the psychological values pertain to what is being valued: the
quality of the system versus how the system is perceived.
However, empirical findings show that the psychological
value has a strong positive relation with the total economic
value, because they both measure social preferences.
A separate category is made up by option values, i.e. values

attributed by individuals from the knowledge that a resource
will be available for future use. Thus it can be considered like
an assurance that a resource will be able to supply benefits in a
possible future, but not for present use. The quasi-option value,
which is sometimes classified as a non-use value, represents
the value derived from the preservation of the future potential
use of the resource, given some expectation of increase of
knowledge. The quasi-option value is important when the
decisions on consumption are characterized by a high
reversibility.
However, any economic valuation of biodiversity according
to this definition is based on an instrumental perspective on
the value of biodiversity. This means that the value of
biodiversity is regarded as the result of the integration
between humans and the object of valuation, which is the
change in biodiversity. Economic valuation in biodiversity
changes is based on a reductionist approach of the TEV; it is
regarded as a result of the aggregation between various use
and non-use values, reflecting a variety of human motivations, as well as the aggregation of local values to attain a
global value, i.e. a bottom-up approach (Nunes and van den
Bergh, 2001).
5.
Alternative economic valuation methods
4.3.
5.1.
Revealed preferences techniques
A critical evaluation
This classification of the TEV is not always used in straightforward way and free of significant criticism. While its success is
based on several legal cases (e.g., the Exxon Valdez Alaskan oil
spill disaster), this model has its criticism among those who
raise the question about its ability to capture actual values of
natural resources. Nevertheless, an understanding of the wide
range of values attributed to biodiversity forms a basis for
keeping policy-makers informed on their choices on its
conservation and sustainable use (Spash, 2001). According to
Brown and Moran (1994), the economic valuation of biodiversity is required for the purpose of placing a common concern
in the context of the management of natural resources. Thus,
the above classification is often complemented with other
categories of values which consider the ecologicalfunctional
importance of biodiversity in natural systems (see for a review
Fromm, 2000). Early thoughts on these complementary
relationships in the literature can be found in an analysis
carried out by Farnworth et al. (1981) aimed at distinguishing
the manifold values of the ecosystems and to point out the
Revealed preferences techniques seek to elicit preferences

from actual, observed market-based information. Preferences
for environmental goods are usually revealed indirectly, when
an individual purchases a market good to which the environmental good is related in some way. They are all indirect,
because they do not rely on people's direct answers to
questions on how much they may be willing to pay (or accept)
for an environmental quality change. Thus the emphases of
these techniques are mainly on their contribution to valuing
biological resources. The values obtained could be considered
sufficient for cost-benefit purposes, but they will rarely reflect
biological health. As such these techniques provide only a
lower bound estimate of the value of a particular biological
resource. The techniques included in this group are in
particular the travel cost method, or hedonic price and wage
techniques on adverting behaviour. In most cases they only
capture use values, leaving non-use values out of consideration. This is not the case, though, with simulated market
methods.
224
Fig. 1 Methodologies for economic valuation of biodiversity.
The common underlying feature is a relationship between

a market good and the environmental commodity. For
example, when using the travel cost method, researchers
estimate the economic value of recreational sites by looking at
the generalized travel costs of visiting these sites (Bockstael
et al., 1991). Conversely, practitioners of the hedonic price
method estimate the economic value of an environmental
commodity, say, clean air, by studying the relation between
house prices and air quality (Palmquist, 1991). The averting
behaviour or production cost function methods is characterized by exploring the relationship of the environmental
commodity through a generalized cost function (Cropper and
Freeman, 1991). For instance, improvement of air quality can
be assessed on the basis of expenditures made to avert or
mitigate the adverse effects of air pollution. Avoided cost
damage costs, preventive expenditures, repair costs (or
restoration), compensation costs, replacement costs, and
relocation costs are specific instances of this method. Finally,
the production factor method estimates the economic value of
an environmental commodity through the inputoutput relationship of such a commodity in a production function. For
example, the economic value of a cleaner soil is related to the
value of the increased agricultural output through a dose
response method (Nunes et al., 2004).
5.2.
Stated preferences techniques
Stated preferences (SP) techniques are based on the simulation of the market, and thus on prices observed for the good
to be valued. Results are achieved through a questionnaire to
be filled out by the population, or a sample of it. In simulated
market conditions, the supply side is represented by the
interviewer, who typically offers to provide a given amount of
units of the good at a given price. The respondent, who either
accepts or rejects the offer, represents the demand side. One of
the most crucial issues in this kind of method is to be precise
in the description of the market, and yet simple and clear
enough for people to understand it. This is important, because
biological and landscape diversity are among the goods for
which it is difficult to simulate a clear, credible, precise and
understandable market in a poll process. They are based on
collecting data by means of questionnaires. The best known
method is the contingent valuation methodology (Mitchell
and Carson, 1989). Indeed, the contingent valuation (CV)
method is currently one of the most often used techniques

for the valuation of environmental goods. This is partly due to
CV features that constitute important advantages over
revealed preference methods. First, the CV method is the
only valuation technique that is capable of shedding light on
the monetary valuation of the non-use values, which typically
leave no behavioural market trace. Ignoring such values will
lead to a systematic bias in the estimation essentially an
underestimation of the total benefits of biodiversity. Second,
CV allows environmental changes to be valued even if they
have not yet occurred (i.e., ex ante valuation). Therefore, CV
offers a greater potential scope and flexibility than revealed
preference methods. It allows the specification of hypothetical
policy scenarios or states of nature that lie outside the current
or past institutional arrangements or levels of provision.
Third, CV allows to enrich the information base by submitting
the process of value formation to public discussion, and hence
it is recognized as an effective tool for policy decisionmaking (Sen, 1995).
Fig. 1 and Table 2 provide a summary of monetary
valuation techniques and their suitability to measure different
components of the TEV of biodiversity. Not all valuation
methods are usually suitable to measure non-use values. For
instance, if a market would exist, it may be that it fails to
capture non-use values. Sometimes, the ability to capture
passive use values could be a decisive criterion for choosing
for a specific method selection process.
5.3.
Application of the valuation techniques to biodiversity
Extending these procedures to biological biodiversity is

complex. Indeed, the evaluation for biodiversity is perhaps
the most challenging issue in the context of economic
valuation. It is worth noting that all the techniques briefly
described above have been applied to biodiversity valuation.
Each one of them has some advantages over the overs, but
also some disadvantages. The use of one or another depends
mainly on the purpose of the valuation exercise and the
availability of data and resources.
So far, the most popular valuation methodology has been
the family of CVM and SP methods. The reasons for the
momentum of SP methods are diverse. It has a format that
respondents tend to find comfortable, thus reducing the
proportion of no-answers and protest-answers. SP methods
225
Table 2 Review of economic methods for biodiversity conservation

Method
Travel cost
method
Pros
Cons
Use of real market data
Can estimate use values only

May have substantial data requirements
Requires estimates of value of travel/leisure time
Cannot predict the changes in use values due to environmental changes
without prior information
Random
Estimates recreational use value of (i) changing
utility model environmental quality of site attributes and (ii) site in May have substantial data requirements
total
Requires estimates of value of travel/leisure time
Problems arise with multi-purpose trips
Can be hard to handle participation decisions (i.e. whether to make the
visit or not)
Hedonic
pricing
Requires extensive house market data
method
Current evidence suggests it is not suitable for use in benefits transfer
Avertive
Modest data requirements
Can estimate use values only problems arise when (i) individuals make
expenditure
multiple averting expenditures, (ii) there are secondary benefits of an
method
averting expenditure and (iii) averting behaviour is not a continuous
decision but a discrete one (e.g., double glazing is either purchased or
not)
Contingent
Can estimate both use and non-use values
Relatively expensive
valuation
Suitable for valuing environmental changes
Complex and multi-dimensional scenarios may be too much of a
irrespective of whether or not they have a precedence cognitive burden for respondents
Completed surveys give full profile of target
The concept of diversity may similarly be difficult to put across to the
population
respondents
Choice
Can estimate both use and non-use values
Not yet as widely tested as CV
modelling
Suitable for valuing environmental changes
Some techniques are not based on economic theory
irrespective of whether or not they have a precedence
Completed surveys give full profile of target
The concept of diversity may be difficult to put across to the
population
respondents
can cope with valuing different attributes of a forest, like

biological and landscape diversity aspects, in an integrated
manner, therefore being more informative. SP methods tend
to cope better with the so-called embedding problem (valuation being rather insensitive to the scale of the physical
change) in as far as the respondent gets a richer perspective of
the scale of the changes proposed. Both CVM and SP design
exactly the market so as to value the good of interest, whereas
with other methods it is often difficult to isolate the value of
the good from other closely related goods. On the other hand,
expressing biodiversity changes in simple, accurate and
understandable terms in a questionnaire can prove to be a
challenging task.
Table 2 shows that certain valuation methods are more
appropriate than others to address certain types of biodiversity value. For example, revealed preference methods can only
be used for a limited number of biodiversity value categories,
as they do not allow for a monetary assessment of non-use
values. On the contrary, the contingent valuation method is in
principle applicable to a multiplicity of biodiversity value
categories. However, one needs to recognize that this method
will fail for those biodiversity value categories that the general
public is not informed about nor has experience with. In this
respect a questionnaire should be designed that is compre-
hensively enough in order to convey detailed information on

changes in ecosystem life support functions and processes as
related to biodiversity changes so that the latter are not
regarded by respondents as too cumbersome. Such information is crucial to obtain a practical, reliable and effective
questionnaire.
There tends to be an inverse relationship between familiarity with the good and the ability of the respondents to
answer meaningfully. The biodiversity-related goods tend to
be very unfamiliar for a market situation. Therefore, the use of
CVM and SP requires state-of-the-art practice to overcome this
and other potential related problems. In general, the more
specific the change in biodiversity is, the more reliable are the
values obtained by all methods. This is especially the case
with CVM and SP methods. Other techniques tend to be more
suitable for ex post valuation, since they rely on existing
markets, whereas CVM and SP tend to be more adequate for
valuing changes ex ante. They can also be used in ex post
valuation, but there might be a lack of incentives to answer
(see for details Nunes et al., 2004).
In summary, even though estimating the economic values
of changes in biological and landscape diversity of forests is
not a straightforward task, the tools developed by environmental economics makes it possible and, overall, fairly
226
Table 3 List of the valuation case studies

Biodiversity and habitat values
Type of good
Country
Biodiversity
UK
UK
Norway
Germany
UK
UK
Wildlife
UK
UK
UK
UK
UK
UK
UK
UK
UK
National parks and nature reserves
Hungary
UK
UK
UK
Watercourses
Norway
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Landscape
Austria
Sweden
UK
Netherlands
Netherlands
Endangered Species
Norway
Norway
Sweden
Sweden
UK
Sweden
Wetlands
UK
UK
Austria
UK
UK
UK
Woodlands
UK
UK
Netherlands
Sweden
Sweden
Sweden
Sweden
Range of the monetary value estimate
Method
Year of study
8.0115.42 once-off payment/person

46.9962.26/household/year
NOK 194 annual payment/year
DM 16.1/month
75/household
308/household
CVOE
CVOE
CVDC
CV
CVOE
CVDC
1993
1993
1991
1990
1994
1994
0.983.12/visitor/year
1365 ha/year
25 ha/year/person
0.61.7 visit/person
1.022.3 visit/person (full travel cost)
1.182.53/adult
1.992.60/person
16.8 once-off payment/person
CVPC
CVOE
TCM
CVOE
TCM
TCM
CV
ZTCM
CV
1994
1986
1986
1985
1985
1986
1988
1988
1990
6/visitor
24/household
4.54/person
0.82/person
CVPC
CV
CV
CV
1996
1990
1985
1986
$50$100/person/year
0.750.95/adult visitor
0.36/visitor
13.595.56/person/year
546582 once-off payment/household
12.08/person/year
35% increase in property sale price
9.211.2/person/visit
4.9% increase in property sale price
0.513/visit
CV
CV
CV
CVOE
CV
CVOE
CV
HPM
ITCM
HPM
TCM
1990
1991
1989
1988
1987
1987
1987
1989
1988
1990
1989
ATS 9.2/visitor/day
SEK 750/person/year
4955/household/year
NLG 55/household/year
NLG 80/household/year
CVOE
CVPC
CVDC
CVPC
CVOE
1991
1991
1994
1993
1994
NOK 1700NOK 2750/person/year

$15/person/year
$7/person/year
SEK 85/person/year
2.94/year
SEK 406/person
CV
CV
CV
CV
CV
CVDC
1991
1990
1990
1991
1993
1993
67/household/year
75/household/year
ATS 329.25/Austrian/year
21.75/household/year
76.74/visitor/year
83.67/visitor/year
CVOE
CVIB
CVOE
CVOE
CVOE
CVIB
1991
1991
1993
1991
1991
1991
9.94/household/year
NLG 22.83/household/month
SEK 95/person/year
SEK 1014/household/year
$3$4/person/year
$5$8/person/year
CVOE
CR
CVOE
CVOE
CV
1991
1995
1987
1991
1988
1988
1990
227
Table 3 (continued)
Biodiversity and habitat values
Type of good
Country
Woodlands
Norway
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Range of the monetary value estimate
Method
Year of study
$13$18/person/year
1.217.09/person/year
9.73/visitor/year
0.53/visitor
0.33/visitor
1.33.3/visit
1.25/visit
15.13/visitor/year
1/visitor
14.624.5/visitor/year
7.1% increase in property sale price
43 increase in property sale price
0.060.96/visitor
0.430.72/person
1.95/visitor
0.53/visitor
12.55/year
3.51/year
1.822.78/visit
20.630.59/person
0.330.93/visitor/visit
CV
CVOE
CV
CV
CV
ZTCM
CVPC
TCM
CV
TCM
HPM
HPM
TCM
CV
TCM
CVOE
CV
CV
CVOE
CV
CVOE
1990
1991
1990
1988
1987
1988
1987
1988
1986
1986
1990
1988
1988
1988
1988
1988
1994
1994
1990
1990
1991
Source: RIVM (2000).

Note: CV = Contingent valuation; CR = contingent ranking; OE = open ended; PC = payment card; DC = dichotomous choice; TCM = travel cost
method; ZTCM = zone travel cost method; = valuation method unspecified, and = base year unspecified and assumed to be the year before
presentation of the paper.
reliable. Provided, of course, that the methods are applied

according to the state-of-the-art knowledge.
6.
Biodiversity values in plural
6.1.
Valuation data set
Comparative analysis, such as meta-analysis, serves to

provide a framework for quantitative research synthesis. In
particular, it may also serve as a quantitative framework for
the comparative study of previously undertaken studies that
have generated different values. As an illustration of the
potential of this approach, a meta-analysis study will be here
presented based on a data set originating from the Dutch
National Institute of Public Health and the Environment
(RIVM) (ten Brink et al., 2000) Table 3 presents a full list of
the case studies. This data set contains a set of 75 distinct
empirical case studies on the valuation of different aspects of
biodiversity and different kinds of habitat, ranging from
wildlife and endangered species preservation to the protection
of national parks and nature areas (ten Brink et al., 2000)
provide a full list of the case studies and details. The database
includes the following items:
type of environmental asset (e.g., biodiversity, wildlife,
landscape, wetlands, etc.);
study characteristics;
the country or region concerned;

the evaluation method deployed (e.g., contingent valuation,
hedonic prize);
the monetary value of the asset (or a range), including
measurement units and scales used.
The monetary valuation figures have been presented as
standardized willingness-to-pay figures in the study by ten
Brink et al. (2000), and these will be used by us see Table 4 for a
summary. This database contains both numerical information
(such as willingness-to-pay) and alpha-numerical, linguistic
and categorical information (e.g., country, year of study, etc.).
This makes the application of standard statistical tools rather
problematic. Nevertheless, even a linguistic information base
may incorporate a hidden structure in terms of associations
between patterns, or the frequency of occurrence of a given
phenomenon (or qualitative characteristic or parameter). In this
context, we may resort to qualitative pattern recognition
methods, elucidated inter alia in the artificial intelligence
literature. There is a wide variety of such methods, such as
computational neural networks, genetic algorithms, fuzzy and
rough set methods, decision tree induction methods, etc. An
interesting recently developed algorithm in this framework is
the a priori algorithm, which is able to identify association rules
among qualitative data (Agrawal et al., 1996). This metaanalytical method is used by us and will be concisely described
in Subsection 5.2. Subsection 5.3 will then present the quantitative results of our comparative study.
228
Table 4 Mean willingness-to-pay for biodiversity and habitat services and values
Type of good study
Biodiversity preservation
Wildlife preservation
National parks and nature reserves
Wetlands
Watercourses
Landscape
Endangered species protection
Woodlands
6.2.
WTP/person/year (in , 2006)
Countries of the study
28.66
1.8
8.7
35.0
27.2
57.5
120.9
18.8
Assessment of values by association
Nowadays, various methods for data set characterization are

rather well developed. In particular, association rules provide
a competitive advantage by using repeated interactions
among factors within the data, the a priori algorithm, first
introduced by Agrawal et al. (1993), is one of the most popular
methods. It identifies combinations of attribute values or
items that occur with a higher frequency than might be
expected, if the values or items where considered independent of one another. In such a context, a relation R contains ntuples over a set of Boolean attributes A1, A2, An. Let I = {Ai1,
Ai2, Ain} and J = {Aj1, Aj2, Ajn} be two sets of attributes. Then
I J is an association rule, if the following two conditions are
satisfied: the support for the set I J appears in at least an sfraction of the tuples; and a confidence amongst the tuples
shows up if at least a c-fraction also has J appearing in them.
To some extent, the relative popularity of this method can
be attributed to the simplicity of the problem statement and
its wide applicability in identifying hidden patterns in a data
set. However, its success has also much to do with the
availability of an efficient algorithm (a priori).
The analysis aims to identify all valid association rules
within the database for the valuation of different biodiversity
indicators and different kinds of habitats. The first step in the
a priori analysis is to split the database into two distinct sets of
UK,
UK
UK,
UK,
UK,
UK,
UK,
UK,
Norway, Germany
Hungary
Austria
Norway
Netherlands, Austria, Sweden
Sweden, Norway
Netherlands, Sweden, Norway
variables: viz. on the basis of valuation method and the good

under valuation. The second set is characterized by the price
variable. In addition, we use the information about the
number of studies that support an association rule to be
identified and its relative share in terms of frequency, which
incorporates the weight of the association rule on the
database (see Table 5). This table offers also the relevant
information concerning the strength of the association rule
within the database used in our comparative analysis.
6.3.
Empirical results
The use of the a priori algorithm leads to interesting empirical

findings. Table 5 shows that that there are 18 possible
association rules, which correspond to the most frequently
appearing regularities in the database. One particularly
interesting association rule that emerges from the database
links (2) the good under valuation to (3) the price, which is
interpreted in terms of WTP. For example, if the good under
consideration is woodland habitat, the corresponding association rule (see first row) shows that the woodland monetary
valuation falls between 9.4 and 20.1. This price range is
supported by 30 cases, which corresponds to 38% of all case
studies in the database. The empirical magnitude of this
association rule appears to be very high: it corresponds to a
confidence level of 100% (see the last column). In other words,
Table 5 Empirical findings for alternative association rules

Association rule
Good, method (LHS) if
Price in (RHS) then
(1) Good = woodlands

(2) Good = watercourses
(3) Good = wildlife
(4) Good = endangered species
(5) Good = wetlands
(6) Good = biodiversity
(7) Good = landscape
(8) Good = national parks and nature reserves
(9) Method = CV
(10) Method = CVOE
(11) Method = CVOE
(12) Method = TCM
(13) Good = woodlands and method = CV
(14) Good = woodlands and method = TCM
(15) Good = woodlands and method = CVOE
(16) Good = wetlands and method = CVOE
(17) Good = watercourses and method = CV
(18) Good = endangered and method = CV
9.4 b price 20.1

20.1 b price 31.1
Price 9.4
Price N 38.0
31.1 b price 38.0
20.1 b price 31.1
Price N 38.0
Price 9.4
9.4 b price 20.1
31.1 b price 38.0
20.1 b price 31.1
9.4 b price 20.1
9.4 b price 20.1
9.4 b price 20.1
9.4 b price 20.1
31.1 b price 38.0
20.1 b price 31.1
Price N 38.0
Share of
studies (%)
Number
of studies
Confidence
level (%)
38.0
13.9
11.4
8.9
7.6
7.6
6.3
5.1
16.5
5.1
6.3
5.1
16.5
5.1
8.9
5.1
6.3
5.1
30
11
9
7
6
6
5
4
13
4
5
4
13
4
7
4
5
4
100.0
91.7
100.0
100.0
100.0
100.0
100.0
100.0
48.1
20.0
25.0
57.1
100.0
100.0
100.0
100.0
83.3
100.0
all the woodland habitat valuation cases support this

association rule. If the good under consideration is biodiversity, this price-good association rule (see row 6) shows us that
the respective price ranges between 20.1 and 31.1, which is
true for all biodiversity case studies presented in the database.
However, the empirical significance of this rule is rather low,
since it is only valid for 7.6% of the case studies in the
database, i.e. only 7.6% of the sample of case studies was
concerned with biodiversity.
Another association rule that emerges from the database
links (a) the method of valuation to (c) the price. This rule
shows (see row 9) that if the valuation method under
consideration is contingent valuation the respective monetary
estimates range between 9.4 and 20.1. This is true for 13 of
all the 27 case studies that used CV as the selected valuation
method. Therefore, the empirical magnitude of this association rule corresponds to a confidence level with a strength of
48.1%. In other words, about half of the CV valuation cases
support this price association rule, which corresponds to
16.5% of the database. A similar price association rule can be
found for the TCM, i.e., the respective price estimates range
between 9.4 and 20.1 (see row 12). However, despite the
fact that this price rule appears to have stronger empirical
support because it corresponds to a higher confidence level
with a strength of 57%, this association rule is valid for only
5.1% of the case studies registered in the database for our
analysis.
Clearly, the present database is somewhat too small for the
identification of robust compound rules. It seems that the
relatively aggregate and standardized valuation figures are too
imprecise to support firm conclusions and are thus rather
poor to be used for policy guidance. Nevertheless, the
technical method deployed there indicates clearly that there
is no more reliable quantitative information to be extracted
from the present database. In general, the above described
multi-dimensional classification methods are in principle able
to identify relevant causal linkages and structures in a
qualitative database.
7.
Concluding remarks
A comprehensive assessment of ecosystem biodiversity characteristics, structure and functioning requires the analyst to
undertake various important actions. First, the causes of
biodiversity loss should be determined, in order to improve
understanding of socio-economic impacts on biodiversity
processes and attributes. Second, the range and degree of
biodiversity functioning should be assessed, especially in
terms of ecosystemfunctional relationships. Third, the sustainability of biodiversity uses should be assessed and the
consequences of biodiversity loss should be determined.
Finally, alternative biodiversity management strategies should
be assessed and spatial and temporal systems analysis of
alternative biodiversity conservation scenarios should be
carried out.
The concept of economic value has its foundations in
welfare economics. Therefore, valuation in an economic sense
is always the result of an interaction between the subject and
an object. Moreover, economists do not pursue total value
229
assessment of an environmental system, but rather system

changes. The goal is then to assess the human welfare
significance of biodiversity change under consideration,
through the determination of the changes in provision of
biodiversity-related goods and services and consequent
impacts on the well-being of humans who enjoy both use or
non-use benefits from such a provision. Different instruments
are available to assess the economic value of biodiversity. The
choice is not always evident. Survey valuation studies have
often been used, because the use of revealed preference
methods leaves out important biodiversity value types,
notably non-use values. Alternatively, researchers can combine valuation techniques. Special attention however, should
then be given to value aggregation across the resulting values
so as to avoid double counting. Meta-analysis appears to be a
fruitful instrument in this context.
There is a clear need to obtain information about the cause,
type, and persistence of stress on biodiversity and the
estimation of the respective impacts on human welfare. The
combination or integration of the ecological and economic
characteristics to assess and value biodiversity leads to an
integrated framework. Interdisciplinary work is thus required,
involving both economists and ecologists transferring elements or even theories and models from one discipline to
another and transforming them for their specific, mutually
consistent purpose. In other words, the underlying objective is
the development of a common way of thinking about
modelling and valuing biodiversity.
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Economic Valuation

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EC O L O G IC A L E C O N O M IC S 6 7 ( 2 0 08 ) 21 7 2 31

Economic valuation of biodiversity: A comparative study

Received 23 June 2007

Received in revised form

Accepted 5 March 2008

comparative (i.e., meta-analytical) methods from the perspective of conservation and

Available online 4 July 2008

sustainable use of biodiversity. Several illustrative examples are presented in order to

this context, a multi-dimensional technique originating from the field of artificial

intelligence is deployed. It allows us to identify the most important variables responsible

for changes in economic estimates of biodiversity.

Non-market valuation methods

2008 Elsevier B.V. All rights reserved.

Market valuation methods

Biodiversity requires our attention for two reasons. First, it

research by means of meta-analysis, discusses the range of

rigorous valuation tools in order to cope with complicated

been developed in the context of the natural sciences (in

methods difficult. Therefore, the use of specific procedures and

Meta-analysis refers to the use of quantitative methods mainly

existing studies. In the context of value transfer, such research

Meta-analytical methods have gained much popularity, not

also may also concern numerical methods for dealing with

Rough set analysis

Rough set analysis developed by Pawlak (1982) is the most

Table 1 Applications of meta-analysis

Fuzzy set analysis

Fuzzy set analysis is applicable for the analysis of the same

Content analysis is a method for making inferences by

In the context of ecosystem and biodiversity valuation, the

may cause differences in biodiversity estimation. In Section 3

perceive things. Something has a value if it contributes to the

Market and non-market approaches

Economic, monetary valuation of biodiversity can proceed in

A classification of biodiversity benefits

Independently of the valuation approach engaged, value

as species or habitat is maintained. By definition, such a

A separate category is made up by option values, i.e. values

Alternative economic valuation methods

Revealed preferences techniques

Revealed preferences techniques seek to elicit preferences

Fig. 1 Methodologies for economic valuation of biodiversity.

The common underlying feature is a relationship between

Stated preferences techniques

method is currently one of the most often used techniques

Application of the valuation techniques to biodiversity

Extending these procedures to biological biodiversity is

Table 2 Review of economic methods for biodiversity conservation

Use of real market data

Can estimate use values only

can cope with valuing different attributes of a forest, like

hensively enough in order to convey detailed information on

Table 3 List of the valuation case studies

Range of the monetary value estimate

8.0115.42 once-off payment/person

NOK 1700NOK 2750/person/year

Range of the monetary value estimate

Source: RIVM (2000).

reliable. Provided, of course, that the methods are applied

Biodiversity values in plural

Valuation data set

Comparative analysis, such as meta-analysis, serves to

the country or region concerned;

WTP/person/year (in , 2006)