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Reconsidering Heterogeneity and Aggregation Issues in Environmental Valuation: A Multi-attribute Approach

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Abstract

The economic valuation of complex environmental goods (composed of multiple attributes) is an expanding field of research in ecological and environmental economics. However, several issues are still subjects of debate. This paper focuses on three of them: the linearity of the valuation function in the attributes; aggregation criteria for obtaining social values; and the heterogeneity of individuals’ utility functions. A methodological approach based on Multi-attribute Utility Theory, which enables us to contrast the impact of these concerns on the valuation of environmental goods, is proposed. We employ the methodology to value a protected natural area and, from the results obtained, we can conclude that the non-linearity and the heterogeneity of the individual utility function are relevant aspects of environmental valuation that need to be taken into account when valuing environmental goods.

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Authors and Affiliations

  1. Agricultural Economics Area, Andalusian Agricultural Research Institute (IFAPA), Centro IFAPA Camino de Purchil, PO BOX 2027, Granada, 18080, Spain

    Jesús Barreiro-Hurlé

  2. Agricultural Economics Area, ETS Ingenierías Agrarias de Palencia, University of Valladolid, Valladolid, Spain

    José A. Gómez-Limón

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  1. Jesús Barreiro-Hurlé
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  2. José A. Gómez-Limón
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Correspondence to Jesús Barreiro-Hurlé.

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Barreiro-Hurlé, J., Gómez-Limón, J.A. Reconsidering Heterogeneity and Aggregation Issues in Environmental Valuation: A Multi-attribute Approach. Environ Resource Econ 40, 551–570 (2008). https://doi.org/10.1007/s10640-007-9169-5

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