Valuation Book

Environmental resources constitute the core of life supporting systems of mother earth. They offer a number of services for human well being which are ordinarily not accounted in imputing their market value. Many of these services could be considered as public goods and externalities of conserving the resources. Therefore, economists have explained the problem of valuing them as a good example of market failure and tried to develop specially designed methods of valuation. The valuation of environmental services occupies a central place in the Environmental Economics literature because it provides information for (a) the design of policy for the sustainable use of environmental resources, (b) making investment project choices with a due consideration of their environmental impacts and risks, and (c) measuring a country's Green GDP, a true measure of well being.

Environmental Economics describes environmental values as user values, option value and non-user values and categorizes the methods of measuring them as revealed preference methods and stated preference methods. There are already a large number of well done empirical studies dealing with the environmental valuation in the developed world. The developing countries in Asia, Africa and Latin America, especially the emerging economies of China, India, Brazil and Russia have been witnessing the environmental degradation of formidable proportions. Therefore, there is an urgent need for carrying out a number of environmental valuation studies in these regions of the world to understand the importance of environmental conservation in a path for the sustainable development. This book makes a contribution in this direction to the South Asia region, one of the environmental hotspots in the world, witnessing recently the worst ever environmental degradation.

Since 1999 many young economists from South Asia have been obtaining rigorous training and doing research projects in environmental and resource economics under the aegis of South Asian Association of Environmental and Development Economics (SANDEE). Environmental valuation has one of the focused areas of SANDEE research and training producing already a good number of excellent studies in South Asia. Many of these are peer reviewed by the international experts and appeared as the SANDEE working papers. Some of these papers have also found place in the prestigious international journals. This book brings together many of these studies for a wider use of students and researchers.

The first set of studies presented in this book deal with the measurement of benefits of reduced morbidity and mortality risks from the reduction of air and water pollution. The methodologies of household health production function model and the dose response functions and cost of illness were used in these studies. The second set of studies deal with the problem of measurement of recreational benefits from the conserved environmental resources using the travel cost method. The third set of studies deal with the measurement of environmental benefits using hedonic prices models. The fourth set of studies deal with the measurement of environmental benefits when environment is an input into some sort of production process and deal with issues such as soil conservation and its effects on land productivity and the effect of mangroves in containing the fury of storms and cyclones. Also included is one study on contingent valuation.

This book is designed such that it could be a work book for the students and practitioners of environmental valuation. Each chapter starts with a description of valuation method followed by the discussion of methods of estimation and results. Data of selected case studies are provided in a CD so that the students and practitioners could use the real data sets for understanding the methods of estimation and replicating the results. Students could also use the data sets for estimating the various variants of general models of valuation described in this book.

There are in all five studies dealing with the air and water pollution and health risks. Two studies one from Bangladesh and another from India deal with the problems of mitigation and adoption of arsenic pollution of ground water. Three studies consisting of one each from India, Sri Lanka and Nepal deal with the air pollution and health risk. These three studies deal with different aspects of air pollution. The Indian study deals with the urban air pollution, while the Sri Lankan study measures the health damages of air pollution from the cement industry in a rural setting. The Nepalese study provides estimates of health benefits of improved technologies to reduce indoor pollution.

Three interesting studies one each from Nepal, Bangladesh and India look at the effects of farming practices on land productivity. The Nepal study provides a benefit cost analysis of pesticide use in vegetable farming while the Bangladesh study measures the effect of zoom cultivation on soil erosion and land productivity. The Indian study provides an analysis of externalities of shrimp farming on paddy cultivation.

There are two very well attempted studies on the measurement of recreation benefits of environmental conservation using the travel cost method. The study from Pakistan deals with a national park protecting wildlife while the study from India is about the protected marshy lands in a river delta.

There are three interesting studies from India dealing with some difficult problems of environmental valuation. One of them evaluates the effects of mangroves in containing the fury of storms and cyclones. Another attempts to measure the non-user benefits of cleaning a major river using the contingent valuation method. The third evaluates environmental and other risks at work place using hedonic wages model.

While the list of studies is finalized, there may well be some changes in the chosen studies depending on how ready they are for use in the book. These changes will be made by the editors of the book, who are A.K.E. Haque, M.N. Murty and P. Shyamsundar. The corresponding lead editor will be Dr. M.N. Murty. Over the next few months, several international publishers such as Oxford University Press, Routledge, McGraw Hill and others will be approached to gauge interest in the book.