Economic Environmental Valuation
Wawire, N. H. W.
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This chapter attempts to place a monetary value on environmental resources describing various methods of valuing an environmental resource with respect to costs and benefits. This is because externalities do arise from production and consumption of goods and services that are not accounted for in a competitive market due to market failure (Stiglitz, 1988; Hyman, 1996 and Kolstad, 2000). Marketsfail if prices do not communicate the society's needs and constraints accurately, thereby understating the services provided by an environmental resource. In the worst scenario, prices do not exist to send a signal about the value ofa resource within the environment.