Non-use value
Encyclopedia
The concept of non-use value refers to the value that people derive from economic goods (including public goods or natural resources) independent of any use, present or future, that people might make of those goods. These are generally differentiated from use value
, which people derive from direct use of the good.
Non-use value includes both existence value
and pure non-use value, as well as bequest value, option value, and value arising from paternalistic altruism. Rick Freeman (1993) refers to pure non-use value as the value that occurs for an individual when current prices preclude use of a good, but there exists some lower price at which the individual would use the good. The continued availability of the good provides some value to the individual insofar as s/he may eventually be in a position to use the good.
Bequest value arises from the desire of individuals to preserve a good for the use of future generations. Option value arises from uncertainty about the future demand or supply for the good, although this is generally treated differently from other non-use values in current literature. The value arising from paternalistic altruism is value one derives from others' use of a good.
In general, it is not possible to use revealed preference
methods to measure non-use value. As a result, (controversial) stated preference methods are generally used, including most prominently contingent valuation
methods (CVM).
Use value
Use value or value in use is the utility of consuming a good; the want-satisfying power of a good or service in classical political economy. In Marx's critique of political economy, any labor-product has a value and a use-value, and if it is traded as a commodity in markets, it additionally has an...
, which people derive from direct use of the good.
Non-use value includes both existence value
Existence value
Existence values are an unusual and somewhat controversial class of economic value, reflecting the benefit people receive from knowing that a particular environmental resource, such as Antarctica, the Grand Canyon, endangered species, or any other organism or thing exists.Existence value is a...
and pure non-use value, as well as bequest value, option value, and value arising from paternalistic altruism. Rick Freeman (1993) refers to pure non-use value as the value that occurs for an individual when current prices preclude use of a good, but there exists some lower price at which the individual would use the good. The continued availability of the good provides some value to the individual insofar as s/he may eventually be in a position to use the good.
Bequest value arises from the desire of individuals to preserve a good for the use of future generations. Option value arises from uncertainty about the future demand or supply for the good, although this is generally treated differently from other non-use values in current literature. The value arising from paternalistic altruism is value one derives from others' use of a good.
In general, it is not possible to use revealed preference
Revealed preference
Revealed preference theory, pioneered by American economist Paul Samuelson, is a method by which it is possible to discern the best possible option on the basis of consumer behavior. Essentially, this means that the preferences of consumers can be revealed by their purchasing habits...
methods to measure non-use value. As a result, (controversial) stated preference methods are generally used, including most prominently contingent valuation
Contingent valuation
Contingent valuation is a survey-based economic technique for the valuation of non-market resources, such as environmental preservation or the impact of contamination...
methods (CVM).