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Existence, Option, and User Demands for Nonmarket Resources

1990

An ambitious survey of households in the Northeastern United States ' conducted during July of 1989 allows an unusual opportunity to make an empirical assessment of the effects upon individual resource valuations of different categories of demand for fresh-water recreational resources. The theoretical and empirical literature using contingent valuation methods to measure the demand for nonmarket goods typically emphasizes user demands only. By neglecting the magnitude of option and existence demands, the total social value of these resources (or changes in them) can be systematically understated. We are careful to address the simultaneity between demand status and individual environmental values, employing ordered probit models, censored normal regression models, and a generalization of selectivity correction models in an effort to uncover the true contribution of demand status to the explanation of resource values.

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