Environment, Environmental Goods and Valuation Methods

Abstract

The close relationship between the social welfare of citizens and environmental goods is as clear as the fact that such environmental goods cannot be sold in the market, simply because they are priceless. This leads people to misuse them, preventing them from fulfilling their vital social functions. Based on this relationship, this study describes and analyzes the main specific methods and the respective econometric models of valuation of those goods, generated in valuation processes as a result of extra economic actions or fortuitous situations that did not arise from their own economic or market actions. Thus, its public nature is defined from a legal point of view and from the conventional economic theory, and the importance of its valuation is dimensioned in detail. In addition to highlighting the most relevant limitations, direct and indirect methods of valuation for non-marketable assets are examined, particularly the contingent valuation method and its referendum variant, as well as the hedonic valuation method, applied to non-homogeneous goods, distinguishable by their attributes, including the environmental ones.