Ecosystem accounting: Reconciling consumer surplus and exchange values for free-access recreation

The United Nations Statistical Commission (UNSC) has adopted chapters 8-11 of the System of EnvironmentalEconomic Accounting-Ecosystem Accounting (SEEA EA) as the internationally recognized statistical principles and recommendations for the valuation of ecosystem services and assets for use in ecosystem accounts. This has provided new challenges for environmental economists. Ecosystem accounts capture the contribution of ecosystem assets to economic activity in a compatible way to the traditional System of National Accounts. Both are based on exchange instead of welfare value, with the latter commonly estimated and used in welfare analysis. To estimate exchange values for ecosystem services that contribute to the generation of non-market benefits, exchange prices need to be derived. In this paper, we apply the simulated exchange value (SEV) method to derive exchange prices and values to account for recreation-related services using the travel cost method. We show that exchange prices and average consumer surplus estimates are related. Further, we show that when travel-cost based exchange prices are considered, the proportional reduction in trip numbers is constant if the marginal enabling cost are zero, simplifying the modelling process. We demonstrate the development of accounts for an example recreational fishery based on these measures.

Automated summary

The United Nations Statistical Commission has adopted the chapters 8-11 of the SEEA EA as the international standards for valuing ecosystem services and assets. This presents new challenges for environmental economists. Ecosystem accounts and National Accounts both focus on exchange value rather than welfare value, and we apply the SEV method with the travel cost method to derive exchange prices and values for recreation-related services.