Valuing environmental goods and services requires distinguishing between private goods and public goods. Private goods can be provided separately to different individuals with no external benefits or costs to others; public goods have benefits or costs that are spread indivisibly among the entire community or even the entire planet. Price data are relatively reliable for private market goods, such as the timber produced from forestry assets. Values for near-market goods—such as freely collected firewood—can be constructed by comparing the near-market goods with their market counterparts. Techniques for valuation of public goods are still under development. Some techniques—such as hedonic-price or travel-cost studies—rely on behavioral or market-based estimates; while these estimates are subject to significant measurement problems, they are conceptually appropriate in economic accounts. Other techniques, such as contingent valuation, are not based on actual behavior, are highly controversial, and are subject to potential measurement errors. An important issue here (as it is throughout the federal statistical system) is developing measures of accuracy, both for satellite accounts and the main accounts.

For valuation, BEA should rely whenever possible on market and behavioral data. However, novel valuation techniques will be necessary for the development of a comprehensive set of nonmarket accounts. (Recommendation 5.7)

Quantitative data on many market and near-market activities are at present comparatively adequate. Quantitative data for natural resources are often reliable because in many cases there are well-established conventions for their measurement. Quantitative data on some near-market activities, such as the collection of fuel wood for private use and recreational fishing, are conceptually straightforward, and many of these data are currently collected by federal agencies. Quantitative data on other marketable goods, such as stocks of commercial fish, could be improved substantially. The measurement of quantities for nonmarket goods and services, particularly those that have public-good characteristics, suffers from severe methodological difficulties and insufficient data. There are relatively good physical data on emissions of many residuals from industrial and human activities, but there is very little systematic monitoring of human exposures to most harmful pollutants. The data on many environmental variables are currently poorly designed for the construction of environmental accounts.

The panel recommends a concerted federal effort to identify and collect the data needed to measure changes in the quantity and quality of natural-resource and environmental assets and

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