eration was given to the wide range of interests in the results of the test, including the varied interests of the Indian tribes along the Grand Canyon, the process used in getting inputs from these interests was not clear in the reports on which this case study is based.

Applicability to biodiversity

What is Different about Biodiversity (from the Perspective of Valuation)?

Biodiversity presents two kinds of challenges for valuation: complexity and preponderance of nonmarket benefits. Biodiversity is an especially complex good, service, or amenity; in some ways, it is all these things. It might be most appropriate to think of biodiversity as a state of the world. Biodiversity involves complex suites of environmental services and amenities, which raise difficulties of several kinds:

  • Information needs concerning the productivity of the environment with and without the proposed action in terms of services and amenities, stretch the capacity of the natural sciences.
  • Many of the environmental services and amenities are unfamiliar to ordinary citizens, whose WTP and WTA are the fundamental information for valuation.
  • Theoretical requirements for valuation of complex policies are systematically violated by schemes that value components of biodiversity separately, each by whatever method is feasible and appropriate, and then calculate total economic value by adding the component values. Valid approaches are limited to holistic total value (for example, one-shot WTP for the proposed change in the state of the world, with respect to the particular habitat) and sequential piecewise valuation in which each successive component is valued, assuming that budgets have been adjusted for WTP for all components earlier in the sequence (Hoehn and Randall 1987). Perhaps unsurprisingly, sequential piecewise valuation has seldom been implemented, and published valuation efforts using the piecewise strategy typically are susceptible to criticism in this regard.

Although we should be mindful of the inherent complexity of biodiversity, not all valuation tasks call on us to address its full extent (see the Pacific Northwest case study, below). Often, we are asked to value not total biodiversity, but the benefits and costs of proposed actions that would make relatively modest changes in it, for example, actions addressing just a few species in a particular place or modifying a particular section of habitat. The challenge of valuing modest changes in biodiversity is not trivial, but the task is more manageable than valuing total biodiversity. We note that, according to Norton (1988), a long series of marginal decisions can collectively make nonmarginal changes; and WTP to prevent those nonmarginal changes is greater than the sum of the mar-



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