Progress on valuation Part I

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Progress on valuationPart I
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Overview

• Benefit transfer
• Point transfer NJ project
• Function transfer Meta analysis
• Inventory creation of environmental economic
  literature

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VALUING NEW JERSEYS ECOSYSTEM SERVICES USING A
BENEFIT TRANSFER APPROACH

• Shuang Liu, Matthew Wilson,
• Robert Costanza, Austin Troy,
• John DAgostino and William Mates

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Project background

• Purpose estimate economic value of services
  provided by NJs natural environment.
• First comprehensive statewide study in US.
• Participants NJDEP, Geraldine R. Dodge William
  Penn Foundations, Gund Institute.
• Work began 7/04, completed 3/07.
• NYT coverage on May 21, 2007
• http//www.nj.gov/dep/dsr/naturalcap/

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Benefit transfer

• Save time and resources.
• Included 100 studies (temperate zones in NA and
  EU) 94 from peer-reviewed journals, with a total
  of 210 individual value estimates.
• Translate each estimate into USD2004/(ha yr)

total statewide acreage
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Value-Transfer Data Source Typology
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Gap analysis
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Values by Ecosystem
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Variation in NJ studies
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A META-ANALYSIS OF ECOSYSTEM SERVICE VALUATION IN
COASTAL AND NEAR-SHORE MARINE ECOSYSTEMS

• Shuang Liu, Matthew Wilson, and David Stern

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Meta-analysis (MA)

• Definition using statistical methods to
  synthesize the results found in a well-defined
  class of empirical studies (Smith and Pattanayak
  2002)
• Purposes (Bergstrom and Taylor, 2006)
• 1) synthesize
• 2) test hypotheses
• 3) predict values across time and space, i.e.
  function transfer

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Why coastal?

• Under significant pressure
• Supply 75 of the world fish catch, 7590 of
  the global sink of suspended river load and its
  associated elements/pollutants (Turner 2000)
• Demand 40 of the global population lived within
  100 km of a coastline (MEA 2005)
• US gt50 population lives along the coast/in
  coastal watersheds (Beach 2002) China gt56
  reside in coastal provinces, Shanghai and Tianjin
  (Hinrichsen 1998).

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Literature review

• Peer-reviewed only
• Total of Studies 70
• Total data points/observations 155
• Wilson and Liu. 2007. Evaluating the Non-Market
  Value of Ecosystem Goods and Services provided by
  Coastal and Nearshore Marine System. In
  Pattterson and Glavovic (eds.) Ecological
  Economics of the Oceans and Coasts.

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by valuation method
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Meta-analysis

• 120 observations from 39 CV studies
• Y WTP in USD2006/(household year)
• Xs 3 categories 50 variables
• The estimated model
• Ln (y) a Xcbc Xmbm Xqbq u

Commodity consistency
Quality consistency (publication year
primary data only?)
Methodology consistency
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Xs for commodity consistency

• Objects of valuation
• ecosystem service, land cover, geopolitical
  region, marquee status, size of the study area,
  urban/rural
• Subject of valuation income, population density
• Context type degree of marginal changes

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Xs for methodology consistency

• Valuation method
• Only non-users included?
• Lump-sum/annual payment
• Substitution included?
• Elicitation method
• Outliers excluded?
• Median vs mean?
• Payment vehicle

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Meta-regression

• Ordinary Least Squares (OLS) log-log model
• Stepwise regression, 18 explanatory variables
  left (Plt0.1), df 102
• Adjusted R2 78.4
• Passed heteroscedasticity test but residuals are
  not normally distributed, though both factors
  were taken into account when running the model

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Selected model results
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Conclusion

• Observable attributes account for a substantial
  proportion of the variance in WTP estimates
  across studies
• Some often omitted information is important in
  explaining coastal values, e.g. the size of the
  study area
• Result of the model could be used for function
  transfer the prediction/estimation of the value
  of a coastal area given knowledge of its physical
  and socio-economic characteristics.

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Inventory creation

• Go through all the peer-reviewed environmental
  economic literature listed in EVRI, and classify
  each data point by biome, by ecosystem service,
  and by country
• Total of data points 730 from 675 studies

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By ecosystem service
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• Thank you!
• Questions and comments?