Valuing The Environment Essay Research Paper INTRODUCTIONEnvironmental — страница 3

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might say that the donkey chose death yet one could also suggest that the donkey made a mistake in taking so long to decide. Abeslon continues saying that if the donkey had made a choice, one could argue that the chosen haystack is preferable to starving and not preferable to the other haystack. However, the hypothetical preference approach bears the most criticisms due to its nature. The major concern surrounding this method is the existence of different kinds of bias that might distort the results. The figures are derived under hypothetical scenarios and refer to goods that the consumers have no real experience in dealing with, for example, the preservation of grizzly bears. Since we learn by doing and exchanging information conditions that are absent in these surveys – one

could argue that the preferences indicated would not resemble reality. If one agrees that a hypothetical market bias occurs, the question arises of whether these values have any meaning at all (Hanley & Spash, 1993; Jacobs, 1991). Moreover, analysts have revealed evidence of strategic bias, where survey respondents understate their willingness to pay for an environmental good in order to reduce or avoid any subsequent actual payment the free-rider problem (Jacobs, 1991; Hanley & Spash, 1993). For instance, each household surrounding a lake that is polluted by sewage works may understate its willingness to pay to have the works upgraded since it knows that any improvement will benefit all of the households equally and everybody else will pay. Furthermore, the design of the

hypothetical preference study may affect responses. Firstly, it has been shown that the choice of starting bid influences the respondents final value. An example illustrating starting point bias is given by Turner et al. (1994), where a number of households where asked what they would be willing to pay in extra taxes in order to maintain the current river quality rather than allow it to decline to a level unsuitable for any activity. One group of respondents were offered a starting bid of $25 and another group a figure of $125. The first group produced a final average bid of $27.50 whereas the second group averaged a $94.70 final bid. Secondly, the method by which respondents are asked to pay for an environmental asset may also have an effect on the result of a survey. Payment

vehicle bias was illustrated in a recent study regarding willingness to pay for recreation in the Norfolk Broads, where willingness to pay via a charitable trust was noticeably lower than willingness to pay via tax (Turner et al, 1994, p.126). In addition, the respondents valuation may be affected by the amount of information they have been provided with on the subject. Hanley and Spash (1993) report that bids from respondents to preserve various animal species digressed according to the information they were provided with. In general terms, a major problem with valuing the environment according to individual preferences is that the preferences of future generations are not taken into account. The values that count belong to those choosing, the present generation. As Beder

explains (1996), individuals might prefer, in times of recession, to continue adding to the greenhouse emissions rather than cutback on energy use but taken to its extreme this could threaten future generations in a severe way . Another argument against these methods of valuing the environment is that the process is anthropomorphic (Pearce, 1993). In other words, the resulting values relate to preferences held by people and take no account of the intrinsic value of other living creatures. Economists defend themselves by defining values as the prices at which goods and services change hands in competitive markets ; thus environmental assets derive their value through usefulness to people (Sagoff, undated; Hanley & Spash, 1993). For many environmentalists, however, especially

deep ecologists, this is unacceptable and completely arrogant. A further criticism of placing values on the environment is that a respondent s willingness to pay will depend upon the ability to pay, even under hypothetical circumstances. From data collected by Friends of the Earth, as part of their Pollution Injustice campaign, it was revealed that households with incomes of less than 5,000 p.a. are twice as likely to live close to a polluting factory as a household with an income of 60,000 p.a. Thus, the poorer families will regard a reduction in pollution levels very highly. However, their bids to protect or improve their environment would be lower compared to the bids made by the more affluent individuals that would like to exploit it. Any survey, therefore, is likely to be