Introduction

During the past thirty years the valuation of environmental goods and services has become one of the most heavily researched areas within environmental economics. Several techniques for valuing goods and services that do not ordinarily enter the market system have been devised. One of the emerging areas in valuation is the use of SP theory and methods in the valuation of environmental goods and services. SP techniques offer many advantages in this area, and their consistency with random utility theory allows them to be used to generate economic measures of benefits (or costs) associated with changes in environmental service flows.

This chapter reviews the general topic of environmental valuation, and more specifically, the use of SP techniques in valuation. This is followed by an examination of two case studies. The first case study illustrates the use of SP in measuring the value of recreation, in which SP is used as a stand-alone tool for valuation and combined with RP data for the same activity. The second case study examines the use of SP in the valuation of an endangered-species conservation programme, in which SP is used to elicit consumer preferences over environmental goods and services where there is no behavioural trail (i.e., no market in which to compare SP and RP data). Finally, advanced issues in the use of SP for environmental valuation are discussed, including the relationship between SP and the most common direct environmental valuation technique: contingent valuation.