range of techniques, the estimation of subcomponents of that total value is
more straightforward.
Typically, use values are easier to estimate than nonuse values. For exam-
ple, the economic returns from crops, timber, and other forest products (direct
use values) or the indirect gains of fishers and hydroelectric companies bene-
fiting from forest conservation (indirect use values) might be simply estimated
using market prices or, in a less straightforward but superior way, using
shadow prices, which are prices corrected for internal distortions that could
cause them to deviate from true economic costs (see the Sudan case study later
in this chapter for more details on shadow pricing). If the area where the agro-
forestry system exists has potential for ecotourism, then the tourist benefits
can be assessed indirectly by looking at how much visitors are spending to
travel to the site and how much they spend during their visit. This is called the
travel cost method. Needless to say, what these alternatives are also depends on
the scale of the areas involved. If the analysis is related to a small area, alterna-
tive land uses such as ecotourism may be severely limited. This suggests that,
to maximize options, fairly large areas must be combined to exploit fully con-
servation economic values.
Only a few years ago, nonuse values were commonly called intangibles pre-
cisely because they are naturally harder to measure. But economists have
developed a number of sophisticated techniques to estimate the full economic
value of environmental resources, including nonuse values. These techniques
are mostly survey based and are generally known as stated preference methods.
Of these, contingent valuation (CV) is the most frequently used method (Car-
son 2004 lists more than 5,000 CV studies covering a wide range of subject
areas and more than 100 countries). CV works by asking people directly how
much they value a particular environmental change that is described via a spe-
cially designed questionnaire. In particular, they might be asked for their will-
ingness to pay (WTP) to secure the environmental improvements arising from
agroforestry; alternatively, the question might be how much individuals would
be willing to accept (WTA) to incur any losses arising from the adoption of
agroforestry (vis-à-vis alternative land uses). These WTP and WTA measures
are monetary estimates of the total value people place on the land use change
of interest. The reasons why people are prepared to pay for an environmental
improvement (or require compensation for a deterioration) are diverse and
might include considerations of personal gains in parallel with a preoccupa-
tion with the benefits that might befall other members of their family, third
parties, or future generations or simply concerns with the environment itself;
therefore, WTP and WTA measures reflect both use and nonuse values. To
draw a parallel, the contingent valuation method works in a similar way as
survey-based market research studies that assess people’s preferences and will-
ingness to pay for new market products and services. There is a fundamental
- The Economic Valuation of Agroforestry’s Environmental Services 75