Valuation Techniques: The Production Function Approach

Production Function Approaches

This looks at the impact of pollution externalities upon the production function ie. value of the environmental impacts on inputs and subsequent output levels.

The "dose-response models" measure the consequences on production with the emission of toxic pollutants.

The "ecosystem function valuation model" attempts to break up an ecosystem into their component functions and put a monetary value on each of these. An example would be how coastal wetlands serve as estuaries, waste filters, protection against hurricanes, and sources of seafood. Each of these functions would be valued and then summed.