There is a growing demand for methods of valuing natural resources, specifically those aspects that cannot be valued in economic markets. The use of discrete choice stated preference methods for valuing multiple-use natural resources has increased substantially in recent years in response to this demand and to criticisms of the most common method of valuation, being contingent valuation. Choice modelling (CM) is one such method that is gaining support in the valuation literature and is being applied in the context of decision making for the management of multiple use natural resources.
This thesis aims to review environmental valuation and its methods through an examination of the philosophical, methodological and practical issues raised in the process; and by comparing the different methods in terms of their validity, reliability, applicability and practicality. The thesis then focuses on CM, giving a detailed description including its theoretical foundations and procedure, and examines the issues raised in its application to a multiple-use natural resource, being the Nerang State Forest on the hinterland of the Queensland Gold Coast.
The exercise shows that CM, while having some technically demanding elements, is a transparent, accessible, and inclusive method of valuation that allows for the incorporation of ecological requirements for sustainability, community values, and management directives into the process of valuation. This thesis demonstrates that CM is statistically rigorous, firmly founded in its theoretical underpinnings, and is flexible and encompassing in terms of the information it can provide to decision makers. While CM cannot address some of the overriding difficulties that face all methods of environmental valuation, it's potential to take economists a step closer in giving accurate and realistic estimates of previously unmeasured environmental value is palpable and hence, should not be overlooked