Value of Improved Information about Forest Protection Values, with Application to Rainforest Valuation

Value of Improved Information about Forest Protection Values, with Application to Rainforest Valuation

What is the utility from obtaining more precise values of natural resource objects (rainforests), through surveys or other similar information gathering? In the value of information problems studied here, a principal who wishes to preserve a resour...

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Bibliographic Details
Main Authors: Strand, Jon, Siddiqui, Sauleh
Format: Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2015
Subjects:
PURCHASE PRICE
RISKS
PRODUCTION
VALUATION
CARBON
INTEREST
EXPECTATIONS
AGRICULTURAL PRODUCTION
OBJECTS
RESOURCE MANAGEMENT
INFORMATION
RESOURCE ALLOCATION
TIMBER
EMISSIONS
WELFARE
GROSS VALUE
EFFECTS
DISTRIBUTION
VARIABLES
ASYMMETRIC INFORMATION
UTILITY VALUE
INFORMATION ANALYSES
DECISIONS
PAYMENTS
PROBABILITIES
CDF
WILLINGNESS TO PAY
KNOWLEDGE
INFLUENCE
MATHEMATICS
DOCUMENT
DOMAIN
RENT
PROBABILITY
IMPERFECT INFORMATION
TRANSFERS
CASES
CARBON TAXES
MARKETS
ORGANIZATIONS
WTP
EXPECTED VALUES
ECONOMICS LITERATURE
BENEFIT ANALYSIS
RESEARCH
ENVIRONMENTAL ECONOMICS
NATURAL RESOURCES
UTILITY
CLASSIFICATION
CONTINGENT VALUATION
EFFICIENCY
PRIVATE INFORMATION
TAXES
RESOURCES
EQUITY
ENVIRONMENTAL VALUATION
RISK NEUTRAL
OPPORTUNITY COST
CLIMATE CHANGE
POLICIES
VALUES
ECONOMIC RESOURCES
VALUE
DEFORESTATION
ABATEMENT
UTILITY FUNCTION
INEFFICIENCY
EXPECTED VALUE
EXPENDITURES
AGRICULTURE
PROPERTY
DECISION MAKING
INFORMATION ANALYSIS
MEASUREMENT
ENVIRONMENT
BENCHMARK
ECONOMIC THEORY
ECONOMICS
CASE
MANAGEMENT
TRADE
LAND
THEORY
OBJECT
EXPECTED UTILITY
RISK
INFORMATION MODEL
BARGAINING
SUPPLY
OPTIMAL ALLOCATION
GAME THEORY
RISK MANAGEMENT
STANDARD
ECONOMISTS
PERFECT INFORMATION
CONCEPTS
ENVIRONMENTAL
OUTCOMES
NATURAL RESOURCE ECONOMICS
AGRICULTURAL USES
DEVELOPMENT POLICY
FUTURE RESEARCH
Online Access:http://documents.worldbank.org/curated/en/2015/09/25093627/value-improved-information-forest-protection-values-application-rainforest-valuation
http://hdl.handle.net/10986/22846
Description
Summary:What is the utility from obtaining more precise values of natural resource objects (rainforests), through surveys or other similar information gathering? In the value of information problems studied here, a principal who wishes to preserve a resource sets a price to offer to a seller without knowing precisely the protection value or opportunity value, to the seller. The value of information related to more precise information about the protection value for the principal is a key issue in environmental and natural resource valuation, but it is in most cases implicit and not analyzed. More precise resource values reduce the frequency of two types of mistakes (saving the resource when it should not be saved, and not saving the resource when it should be saved), and increases the principal’s ex ante expected utility value. This paper applies the model to Amazon rainforest protection and considers the hypothetical value of perfect information. The analysis finds that the value of perfect information can easily exceed realistic information costs, thus perhaps justifying significant expenditures for valuation studies, given that all available information is used efficiently for conservation decision purposes. The value of perfect information also depends on the nature of buyer-seller interactions, and is higher in the altruistic case, where the principal has full concern for the outcome for the seller.

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