the use value can be greater than this price for all but the marginal consumer, on the assumption of a downward sloping demand curve from left to right as there are many purchasers who are willing to pay a price above that which prevails in the market. This is known as consumers’ surplus which yields an aggregate use value above the price paid by individual consumers and the quantity each purchases. In practice, the concept of consumer’ surplus is rarely invoked for priced goods to ascertain total user value, but it is of interest because it forms the theoretical foundation of valuation methods to establish the willing to pay for non-priced goods.
Although environmental benefits are often unmeasured and un-priced, the true value of many collective consumption or public goods can be considered as being much greater because they are unique so that if they are over-used an irreversible trend may be initialted which lead to their destruction as indicated in chapter 9. Moreover as unique resources they cannot be reproduced. This often imparts a non-use or passive value in addition to the use benefits. Thus they have a value that transcends their exchange and use value, i.e. respectively, any price paid and the consumers’ surplus. In the context of environmental and collective consumption goods a number of non-use benefits or values have been identified which should be added to the use values to yield what is known as total economic value (TEV)
With respect to static benefits, which are generated at one point in time and arise from existing resources, such as heritage sites and public spaces, in effect from the stock of resource in their present state, it is possible to perceive the natural and human-made environment as possessing total economic value consisting of use value and non-use value.
Use value
Use value can be both direct and indirect. For human-made resource traded in the market, such as occupation of an historic building, whether purchased or rented, use value would represent the direct exchange value, which may include consumer ’surplus as indicated in the first paragraph of 10.2.1. The appearance of the historic building almost certainly also confers social benefits giving pleasure to the local community and tourist very likely enhancing their quality of life. These social benefits constitute indirect value. Likewise natural resources not traded in the market, for example a lake river or amenity open space, would confer similar benefits on residents and visitors as an un-priced positive externality of wider socio-cultural benefit. This social value does not necessarily arise from their utility in the market, as with most human-made resources possess indirect value irrespective of that which is instrumental. These should be identified and their value estimated under a different category of use; this is examined in the next section.
Non-use value
Economist suggest that in addition to use value whether direct or indirect, there are two other forms of value: option and existence or intrinsic. Here there is some confusion, as in the economics literature option value has been considered by some as relating to potential demand should people’s circumstances change , for instance a higher level of income or the increased leisure time that would enable them actually to use resources that hitherto they were prevented from gaining access to. However, other commentators on total use value perceive option value as relating to a desire by the current generation to ensure that resources are passed on to future generation; this view is examine below.
Existence or intrinsic value is that which suggests resource, particularly natural ones, such as other living organisms and the physical environment, for example forests, mountains and wetlands, which are not necessarily of instrumental value to humans, have a right to exist. There is also an