Option value

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Option value is the economic advantage that is associated with keeping an option open in view of an uncertain future. The term option value is often used as a component of the total economic value of environmental goods. Burton A. Weisbrod is considered to be the author of the concept of the option value .

definition

Pearce and Moran (1994) define option value as a value category that approximates the individual willingness to pay for an environmental good to be protected for future use. In this respect, the option value is comparable to an insurance value. Its source lies in people 's aversion to risk . As with legacy and existence values, it is often more difficult to quantify option values ​​than use values.

An economic preference for the conservation of biological diversity (species, habitats) often has at least one component that corresponds to an option value. It is often not clear how species or habitats can be used later. Whether benefits will be realized, and if so which, is therefore at least partially unknown. Clever reasons can now speak in favor of keeping such future uses open. In the economic sense, such an intuition becomes an option value for biological diversity, if this leads to an individual willingness to exchange or pay for the preservation of biodiversity.

Quasi-option value

A related concept, sometimes called "option value", is the quasi-option value. It was first proposed by Kenneth Arrow and Anthony Fisher. In contrast to Weisbrod's option value, the quasi option value is independent of the risk attitude. Instead, its source lies in the potential irreversibility of changes in ecosystems. Even if such a change in an ecosystem appears sensible (in terms of a cost-benefit analysis ), newly acquired knowledge could overturn this assessment. Sometimes the concept is not interpreted as a value category, but rather as a decision rule.

Single receipts

  1. ^ Burton A. Weisbrod: Collective-consumption services of individual-consumption goods . In: The Quarterly Journal of Economics . tape 78 , no. 3 , 1964, pp. 471-477 .
  2. ^ David W. Pearce, Dominic Moran: The Economic Value of Biodiversity . Earthscan, London 1994, ISBN 1-85383-195-6 , pp. 20th ff .
  3. ↑ Anthony C. Fisher, W. Michael Hanemann: Option value: Theory and measurement . In: European Review of Agricultural Economics . tape 17 , no. 2 , 1990, p. 167-180 .
  4. ↑ Kenneth Arrow, Anthony Fisher: Environmental preservation, uncertainty, and irreversibility . In: The Quarterly Journal of Economics . tape 88 , no. 2 , 1974, p. 312-319 .
  5. ↑ A. Myrick Freeman III: The measurement of environmental and resource values: Theory and methods . Resources for the Future, Washington DC 1993, ISBN 0-915707-68-3 .