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Pricing the Priceless: Valuing Nonmarket Goods and Ecosystem Services
Patty Champ, USDA Forest Service, Rocky Mountain Research Station, Fort Collins, CO
One of the most basic ideas in economics is that of tradeoffs. Thinking about the tradeoffs associated with a project or program is straightforward when costs and benefits are observed in a market setting. When Walmart increases the size of a parking lot, they can observe how that change affects sales. However, measuring benefits and costs can be tricky when the benefits are not associated with a revenue stream or the costs fall on future generations. Land managers often operate in such settings. What if someone is charged with the Utilitarian concept of managing the land for "the greatest good for the greatest number"? Or worse yet, the Pinchot idea of managing the land for “the greatest good for the greatest number in the long run”? In this presentation, I describe both why and how economists measure benefits and costs that fall outside of structured markets. I make a case for understanding nonmarket values and valuing ecosystem services in the effort to sustain the Great Basin landscapes.