Preventive/defensive expenditures
19th Dec 2018
Preventive/defensive expenditure
Suitability for the forest ecosystem service to be valued:
Water quality, water purification
Erosion protection
Storm protection services
Description of the method:
The method uses the costs of preventing damage or degradation of environmental benefits. It involves obtaining a figure for what it would cost to maintain environmental benefits by investing in the prevention of their degradation.
Benefits of the method:
Useful in estimating indirect use benefits when prevention technologies are available
Costs incurred by individuals in order to avoid damages at already existing goods can be interpreted as a lower bound of the willingness to pay for this good
Limitations of the method:
Mismatching the benefits of investment in prevention to the original level of benefits may lead to spurious estimates of willingness to pay
No measure of individual utility if only decision-maker´s preferences count