The preventive expenditure method is a cost based valuation method that uses data on actual expenditures made to alleviate all environmental problems. Often, costs may be incurred to mitigate the damage caused by an adverse environmental impact. For example, if drinking water is polluted, extra purification may be needed. Then, such additional defensive or preventive expenditure could be taken as a minimum estimate of the mitigation of benefits beforehand.
In the preventive expenditure method, the value of the environment is inferred from what people are prepared to spend to prevent its degradation. The averting or mitigating behaviour method infers a monetary value for an environmental externality by observing the costs people are prepared to incur in order to avoid any negative effects.
For example, by moving to an area with less air pollution at a greater distance from their place of work thus incurring additional transportation costs in terms of time and money. Both of these methods are again, conceptually closely linked.
These methods assess the value of non-marketed commodities such as cleaner air and water, through the amount individuals are willing to pay for market goods and services to mitigate an environmental externality, or to prevent a utility loss from environmental degradation, or to change their behaviour to acquire greater environmental quality.
The preventive expenditure method is a cost based valuation method that uses data on actual expenditures made to alleviate all environmental problems. Often, costs may be incurred to mitigate the damage caused by an adverse environmental impact. For example, if drinking water is polluted, extra purification may be needed. Then, such additional defensive or preventive expenditure could be taken as a minimum estimate of the mitigation of benefits beforehand.In the preventive expenditure method, the value of the environment is inferred from what people are prepared to spend to prevent its degradation. The averting or mitigating behaviour method infers a monetary value for an environmental externality by observing the costs people are prepared to incur in order to avoid any negative effects.For example, by moving to an area with less air pollution at a greater distance from their place of work thus incurring additional transportation costs in terms of time and money. Both of these methods are again, conceptually closely linked.These methods assess the value of non-marketed commodities such as cleaner air and water, through the amount individuals are willing to pay for market goods and services to mitigate an environmental externality, or to prevent a utility loss from environmental degradation, or to change their behaviour to acquire greater environmental quality.
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