image: This is Dr David Hoyos. view more
Credit: UPV/EHU
This news release is available in Spanish.
The economic valuation of natural resources seeks to express in monetary terms the value of the goods and services that the environment provides. For this, economists use discrete choice experiments in which the people surveyed are given a set of options and are asked to choose the one that maximises their well-being. Each alternative proposed in the survey has an associated cost that can be used to translate the preferences of the surveyees into monetary terms. Basically, it is about measuring, in euros, the social well-being associated with a particular environmental change. All this is very useful in the sphere of social choices because political players can obtain valuable qualitative and quantitative information about what citizens are demanding and how much. Since these preferences are also obtained in monetary terms, this information can be incorporated into a standard "cost-benefit" economic analysis. In other words, it is possible to compare within the same measurement unit, in money, what cost and what benefit an environmental policy may offer society.
Dr David Hoyos and Dr Petr Maril of the UPV/EHU's Department of Applied Economics III have used this model in various locations. One of the locations analysed is the protected Garate-Santa Barbara area between the Basque coastal towns of Zarautz and Getaria. In the study conducted in this area, the surveyees were asked to choose between the revival of the autochthonous woodland and the expansion of the vineyards in the area in order to measure the impact that these different land uses have on the well-being of the people. In other words, they were asked in this case to choose between promoting environmental values as opposed to more commercial uses of the land. On the basis of the responses given by the surveyees, it was concluded that "the promotion of environmental values in the area constituted a social benefit estimated between 57 and 265 million euros per year," explained Hoyos. What is more, in the study it was possible to see that greater social benefit was achieved when environmental values were promoted over commercial exploitation.
Women, people with offspring and nature lovers
The researchers wanted to go further by taking an in-depth look at the results of this study. Having assessed people's preferences economically, they studied the influence exerted by the environmental attitudes of those people when it comes to reflecting their preferences. In other words, they endeavoured to explain why being prepared to pay for environmental improvements varies between some individuals and others. For this purpose they incorporated into the previous model attitudinal environmental information about the surveyees (in relation, for example, to recycling, love of nature, etc.), in order to understand in a more detailed way, why they choose certain options over others. Information gathered from a scale used in psychology was used about the environmental attitudes of the surveyees to classify these people.
By way of conclusion, it should be highlighted that being prepared to pay for environmental improvements is ranked higher in those people who believe it is necessary to take action to preserve the environment. But when analysing the sociodemographic characteristics of these people, the conclusion was reached that the willingness to pay more is greater in women than in men; it is greater in people with offspring compared with those who do not have offspring; and it is greater the keener the person is to be in contact with nature.
Thanks to this new application, apart from managing a natural space while taking people's preferences into consideration, it is possible to design more efficient public policies since, as Hoyos explained, "the public institutions have more detailed information about how these preferences are distributed among the population." What is more, once the population has been characterised, more specific environmental policies can be designed. "For example," he explained, "we can understand that the profile of a man without offspring and who is not a nature lover is a social profile that needs more specific awareness building."
###
Additional information
David Hoyos (Bilbao, 1974) has a PhD in Economics from the UPV/EHU, a Master's degree in the Economics of Development from the University of Manchester, and a degree in Ecomomics and Business Administration from the UPV/EHU. Between 2002 and 2010 he was a researcher in the Environmental Economics Unit funded by IHOBE, S.A. (Public Environmental Management Corporation of the Basque Autonomous Community Government), and has been assistant lecturer in the Department of Applied Economics III (Econometrics and Statistics) at the UPV/EHU since 2010. In 2009 he was a visiting lecturer at Queen's University Belfast.
His main field of research centres on the economic valuation of natural resources. The current research includes the development of methodological and econometric advances relating to economic valuation methods as well as the relationship between transport and the environment. This research was made possible by UPV/EHU funding through the EHUA12/13 project.
Bibliography
D. Hoyos, P. Mariel, S. Hess. 'Incorporating environmental attitudes in discrete choice models: an exploration of the utility of the awareness of consequences scale'. Science of the Total Environment (2014); in press., - 0048-9697
A. Longo, D. Hoyos, A. Markandya. 'Sequence effects in the valuation of multiple environmental programs using the contingent valuation method'. Land Economics (2014); in press, - 0023-7639
Journal
Land Economics