Valuing or pricing natural and environmental resources?

This paper is a critique on contemporary non-market valuation study. We argue that the consumer value (willingness to pay (WTP)) derived from contingent valuation method or other methods is a poor guideline for resource allocation and cost-benefit analysis. Only shadow value is meaningful for the public and decision makers in resource allocation. Shadow value is the value to the society, or exchange value in the context of society level. Consumer value and shadow value are apparently different, but they are often not distinguished in many valuation studies. Attention should be given to investigating shadow value rather than willingness to pay or willingness to accept (WTA) in valuing non-market environmental resources. Theoretically, shadow value can be derived from full marginal cost pricing, but it often faces some technical problems for many non-market resources. Appraisal value, which is more holistic but considers both demand and supply, might be a good potential approach to assess shadow value or price.