Economic valuation of public goods

In the context of the PROVIDE Project, valuation focuses on benefits stemmed from (demand-side valuation) and costs associated with (supply-side valuation) the provision of public goods by agricultural and forestry systems. As these goods are not marketed (i.e. there is no market price for them), specific valuation methods have to be used to estimate both benefits and costs. They can be generally classified in monetary and non-monetary methods, with the former usually providing more policy-relevant information. Within monetary valuation methods, stated (especially contingent valuation and discrete choice experiments) and revealed preference (especially hedonic pricing and travel cost methods) methods, stand out, together with direct cost-based methods. Non-monetary valuation methods include multicriteria, experts-based, deliberative assessments, among others. As one of the main objectives of the PROVIDE Project was to explore different valuation approaches, a diversity of non-monetary and, especially, monetary valuation methods have been used to carry out demand-side and supply-side assessments of the public goods provided by agricultural and forestry systems. As shown below, both types of assessments have been applied in 14 different cases studies, mainly focusing on the valuation of biodiversity, water, soil and climate, recreation, and rural vitality provided by these systems. From them, a common remark clearly raises: public goods provided by agricultural and forestry systems are highly valued by the society (both at local and EU scale), but their provision generally entails extra costs for the farmers/foresters, with the higher the level of provision, the higher these costs are.

For further description and information about the valuation assessments made within the PROVIDE Project, interested readers may consult the project’s deliverables D4.1, D4.2, D4.3 and D4.4. They can be found here.

The graphic gives an overview of the valuation studies which have been conducted in PROVIDE. Explore the clickable components for more information.

Public Goods Biodiversity and Habitat Water Quality, Availability and Retention Soil Functionality and Climate Regulation Landscape, scenery and Recreation Rural Vitality and Development case study Regions Contingen Valuation Methods Discrete Choice Experiments Revealed Preference Methods Cost Accounting Methods Other Methods Economic Valuation Marchfeld (AT) Economic Valuation Aberdeenshire (UK) Economic Valuation Brandenburg (DE) Economic Valuation Kromme Rijn (NL) Economic Valuation Dolina Biebrzy (PL) Economic Valuation Sluknov (CZ) Economic Valuation Yuzhen Tsentralen (BG) Economic Valuation Vatra Dornei (RO) Economic Valuation Bretagne (FR) Economic Valuation Andalusia (ES) Economic Valuation Emilia-Romagna (IT) Economic Valuation Harju (EE) Economic Valuation Ruka Kuusamo (FI) Economic Valuation Geopark Ralsko Intensive and mixed agricultural landuse systems Extensive agricultural systems Systems at risk of land abandonment Forestry systems