Beyond monetary evaluation…

At fi rst sight, the monetary evaluation of environmental goods clearly implies that the economic value of changes can be measured in monetary terms, which does indeed appear to be the most convenient option. However, economists have long been concerned with the issue of examining the preferences of peo-ple who have insuffi cient income, as is typically the case in most developing countries. When asked about their willingness to pay, individuals with a low in-come may have nothing to offer, which could lead an investigation to conclude that the environmental change under evaluation is of no value to such people (i.e., willingness to pay may converge to zero), while in fact the exact opposite may be true (as pointed out, for example, by Holland, 1995). Based on an analysis of eight stated-preference studies conducted in developing countries, Whittington (2010) fi nds that, in these countries, regarding almost any envi-ronmental or health issue, willingness to pay (as measured using money) is low in both absolute and relative terms compared to income. So, how can we measure environmental changes in monetary terms in societies where people are struggling to make ends meet, and are both unable and unwilling, even in theory, to support environmental changes that they consider a luxury, or to preserve existing natural assets? (Kocsis–Marjainé Szerényi, 2018)

Environmental economists offer several answers to that problem. Rather than money, one option is to use commodities and products that people are familiar with and encounter in their daily lives, and whose fair value is presum-ably better known to them. For example, Shyamsundar–Kramer (1996) used rice as a substitute for money in a survey conducted among Madagascar’s population to fi nd out how much rice would buy people’s willingness to dis-claim an area which they had previously cultivated so that it could be used for the establishment of a national park.

Another option is to allow respondents to offer their time and labour for a cause, which could then be converted into a monetary equivalent by experts.

There exists much greater equity with time or labour than with money (i.e., there is a lower degree of inequality of time than there is with wealth and in-come): everybody has 24 hours in a day, which makes everyone equal in this regard. In the literature, a variety of interchangeable terms are used to refer to contributions of time or labour, such as willingness to spend time (WTST), will-ingness to work (WTW), or willwill-ingness to contribute labour (WTCL). Although time (labour) as a measure of willingness to pay for environmental goods is primarily used in developing countries (precisely due to low incomes), there are also related fi ndings from developed countries (Ninan et al., 2007; Tilahun et al., 2013; Rai–Scarborough, 2014; Lankia et al., 2014).

From the literature that investigates how to establish the relationship between money and the amount of contributed time, or to estimate the value of time, some conclusions may be drawn:

• comparisons between willingness to pay (WTP) and willingness to spend time (WTST) are becoming increasingly frequent in the literature;

• the monetary value of time offered tends to be much higher than values measured directly in terms of money in both developing and developed countries;

• the amount of labour offered is strongly dependent on the context: other than the amount of people’s spare time, willingness to contribute labour is also affected by the quality of labour that may be offered (light vs.

hard), the time any work takes to complete, and the nature of the re-spondent’s daily work;

• the literature offers a great many examples of how to determine the op-portunity cost of time, ranging from the objective (wage based) to the subjective, all of which produce a different result;

The foregoing observations show that the use of money still has the greatest number of advantages over other measures (time, commodities) in efforts to determine people’s preferences with regard to environmental goods.

Although the focus of this chapter is monetary evaluation and its meth-ods and concepts, brief mention must also be made of another approach, namely non-monetary (for our purposes: socio-cultural) valuation. As shown earlier, the identifi cation of ecosystem services and, consequently, of the components of total economic value often starts with a non-monetary valu-ation. In addition to monetary valuation, ecological economists propose the use of multi-criteria, participation-based, socio-cultural non-monetary valuation methods, which are designed to capture a wide range of eco-system services. For example, such evaluations could be instrumental in identifying confl icts that arise from different ideas about landscape use, as well as in community planning for sustainable landscape use (Kovács et al., 2011b, Kelemen–Pataki, 2014b, Kelemen et al., 2014). The fi gure provided in Scholte et al. (2015) is a clear illustration of the criteria that are applied in these types of valuation (see Figure 4-16.). These criteria concern three interrelated areas: the characteristics of the natural environment, the inter-actions between benefi ciaries and ecosystem services, and the character-istics of the benefi ciaries. Socio-cultural value is derived as the aggregate of these characteristics, which may represent either group or individual values. The chart indicates the more detailed factors and issues that may be investigated in each fi eld which also affect the nature of the values. In Hungary too, a number of examples of non-monetary (socio-cultural)

evalu-ation exist (see e.g. Kelemen et al. 2009; Pataki et al., 2014; Kalóczkai et al., 2014; Fabók et al., 2014; Kalóczkai et al., 2015; Kovács et al., 2015a).

Figure 4-16. Determinants of the socio-cultural values of ecosystem services (Scholte et al., 2015, p. 69, Figure 1.)

Non-monetary valuation explores the signifi cance of natural capital and eco-system services, proposing arguments that may be cognitive, emotional or ethical, but which may also express preferences, needs and demands (Pan-deya et al, 2016). Although non-monetary valuation is a suitable complement to monetary valuation, and may provide an alternative to and, at least partially, address the critical issues raised in connection with monetary valuations, non-monetary valuation, as used in the evaluation of ecosystem services, still lacks a consistent and established methodology, despite the pressing need for one to complement monetary evaluations.