Other useful methods, where detrimental impacts occur, are those rooted in household production function analysis such as avoided costs and estimation of the opportunity cost, provision or replacement cost.
The methods identified above can be classified according to whether they seek to place a value on the good or attribute, by directly asking respondents their willingness to pay for an improvement or their willingness to accept a degradation, or indirectly, by using prices from a related market which does exist. Contingent valuation is an example of the former, while hedonic pricing and travel cost methods are representative of the latter. In addition, there are more qualitative approaches, such as the Delphi technique, a direct method, which might be employed. The box in figure 9.2 in the previous chapter contains a summary on valuation methods and approaches that simply measure participation as a basis for possible valuation. Only the methods that yield monetary valuations are examine in this chapter and reproduced here. It should be noted that choice modelling, given its affinity with CVM and its increasing use as a component of the latter, would be considered as a stated preference approach. The HPM and TCM are revealed preference approaches, as indicated in the summary below.
The methods are eminently suitable for valuing the benefits, and sometimes costs, generated in proposed projects, particularly where they are indirect an intangible ones. Thus, the methods now constitute the means of valuing these in the CBA capital appraisal approach, as indicated in its examination in chapter 9.