The story is told of an accountant, a physicist, and an economist who took a refresher course in mathematics. To gauge the sophistication of the class, the instructor asked, “What is the value of pi?” The accountant answered without hesitation, “The value is three, as rounded to the nearest integer.” The physicist replied with equal assurance: “The value equals 3.1415926, taken to seven decimal places.” The economist chuckled at the naiveté of his classmates. With Olympian condescension, he answered, “The value of pi depends on how much people are willing to pay for it.”

Environmental economists define value in terms of preference and measure the relative significance of preferences in terms of willingness to pay (WTP). In Chapter 2, I argued that WTP does not correlate with or measure any substantive conception of the good, such as happiness. In Chapter 3, I tried to show that preferences, in any case, are inscrutable and unobservable. The behavior one can observe – I used the example of my purchase of several packages of Girl Scout cookies – is consistent with any number of different preferences. By paying for several boxes of cookies, I bought or tried to buy something else, for example, the good feeling that I had acted decently, that I had supported the Scouts, that I had not shamed my family, or the like. Every object one buys comprises myriad qualities and relationships, only some of which one may desire and few of which may be visible to others.