EXISTENCE VALUE, CONTINGENT VALUATION, AND NATURAL-RESOURCES DAMAGES ASSESSMENT

The purpose of this paper is to review recent developments in economic s and public policy with regard to environmental resources. We describ e the traditional concepts of externalities, public goods, efficient p roperty rights, and the more recent concept of existence values for wi lderness areas and other natural resources. A feature is the inclusive ness of modem economic theory. We trace the development of economic ap proaches to estimating values. We briefly review approaches based on o bservable market behavior and contingent market responses. Contingent valuation plays a vital role in estimation because it is the sole tech nique available for estimating the potentially important existence val ues. Benefit-cost analysis for regulatory decisions and natural resour ce damages assessment for implementation of Superfund legislation are discussed. We conclude that estimates of existence values based on con tingent valuation can be useful especially when the alternative is gre ater reliance upon an imperfect political process.