INTRODUCTION 



This bibliography is intended for the use of wetlands scientists, policy 

 analysts, and natural resource professionals who have little acquaintance with 

 natural resource economics, and natural resource professionals who have some 

 background in economic analysis and wish to sharpen their appreciation of the 

 specialized methods used to value the nonmarket uses of wetland resources. It 

 is not intended to serve as a first primer on natural resource economics. The 

 purpose of including this discussion is to introduce the reader to the fact that 

 specialized language and analytic techniques are used in this field, and that 

 summary discussions of these techniques are not available in introductory or 

 intermediate level economics textbooks. 



A key difficulty in economic analysis lies in the need that economists have 

 to express common-sense terms such as "demand" or "supply" in a precise way; this 

 facilitates the interpretation of data and is a powerful aid in making internally 

 consistent, policy analysis. Natural resource economists would like to find a 

 consistent, intuitively plausible measure of the social benefits conferred by 

 some good or service. The most common fallacy noneconomists make in this field 

 is to use expenditures as a measure of well-being or benefits. This measure is 

 defective; expenditures may rise, while benefits fall. The following simple 

 example should clarify the issue. Suppose that a certain population center, in 

 the 1940's, is located 5 miles from a riverine recreation site. Suppose that 

 a factory opens up 15 miles away from the site during the 1950's, and closes at 

 the end of the 1960's; and that during this 20-year period, the bulk of this 

 region's populace resides 15 miles from the site, close to the factory. In the 

 1970's, the populace of the region returns to the old population center, 5 miles 

 from the recreation site. The benefits conferred by the site diminished during 

 the 1950's and 1960's, even though travel (and even total) expenditures 

 associated with the use of the site may have risen during this period. 



Both intuition and formal analysis suggest that accurate estimates of 

 benefits conferred by a good or service provide quantitative indices of the 

 availability of good substitutes for the good or service in question. The fewer 

 low-priced substitutes, the greater the benefits conferred by the good. The 

 prices (quantities) of available substitutes may be needed to specify empirically 

 estimated demand (supply) curves. If so, omission of these variables will 

 produce biased estimates of net benefits conferred if the approach used to 

 estimate social benefits is based on the shape and position of an empirically 

 estimated demand (supply) curve. In general, a good grasp of the meaning of both 

 demand and supply (curves) is needed to produce sound estimates of benefits 

 conferred by some commodity. Demand and supply curves are discussed in the 

 following section that deals with various techniques for estimating benefits 

 conferred by outdoor recreation sites. 



