Economic evaluation of environmental goods

The evaluation of environmental goods poses a major new challenge to economics. It is not possible to simply apply, without extension, existing theory about demand for private goods to environmental goods and other public goods. Indeed, it is possible that demand for private goods will turn out to be the trivial case for some new theory of demand in which the demand for public goods is the general case. Exploring the nature of demand for environmental goods offers economics the opportunity of applying experimental methods. The conventional scientific requirements of testing the validity and reliability of any proposed measurement method also requires the adoption of experimental methods. These methods have long been the province of the social sciences and in all probability the one outcome will be the abandonment of the artificial boundary between economics and the other social sciences.