3.0 METHODS OF ECONOMIC VALUATION OF NATURAL
RESOURCES AND ECOSYSTEM SERVICES
3.1 REVEALED PREFERENCES
In this text, we take great concern as it is a case study. The research is more connected to the development of people. The approach, as well as the context that is applied in the case study, is most likely to affect how nature is taken care of and the way land is degraded. It will impact the level of worthiness that is taken care of by people when it comes to ecosystem services in the Amazonian region of Peru. Based on the case study approach mechanism used, it is accompanied by a plan that will ensure that a detailed rise in the natural, standard life scenario in the manner in which the different communities in this selected part of Peru view the determined advantages that natural forest can come along with, and the various ways in which cultural behavior of conserving this forests can be developed.
The above case study was selected based on the fact that it takes more consideration in the accuracy of data. As a result, it assured that by using such as case study and the methods chosen will make the data obtained to be more accurate as no alliterations or change of data is possible. In other words, the chances of manipulation of data are minimal (Ozdemiroglu, 2016). AMNR Loreto is one of the largest provincial regions in the Republic of Peru, and considering that the areas are a bit more protected and restricted, it makes it easy for the outcome of the case study to be more accurate. The region covers the Amazonian areas of Peru hence making it the most suitable place to carry out the research.
Valuation relies on the information provided by the natural resources in the chosen region. In the travel cost methods, many people in the globe take much of their time to visit the forests and other natural resources in the northern parts of Peru specifically to leave back a trail of evidence that is not supported.
3.1.1 MARKERT PRICE
The method is used in the process of making approximations of the economic value that is possessed by the goods and services from the ecosystem. The technique is best suited in the method of measuring the quality as well as the quantity of the goods and services that come from the economic resources. It puts into use the standard economic criterion that approximates the degree of economic benefit that is brought about by the natural resources in this region. However, the approximation is majorly based on the quantity that the surrounding community buys at varying prices, as well as the number of goods and services that is distributed at different rates.
When applying the method, the researcher is required to approximate the demand function. By doing this, one will be able to predict the market demand by the use of market data. The estimation of the demand function should be done before and after the alliteration and changes in provision. The evaluation in the economic gains the next value that requires to be approximated. The supply function needs to be estimated before and after the changes in the economic benefit to the producers.
When using this method to carry out a valuation of the economic benefit of the natural resources in this chosen part of Peru, the focus is based on the direct and indirect evidence from the markets. Considering the economic benefit that is brought about by the forests as well as other natural resources located in the northern Amazonian parts of Peru, the resource avails the water catchment areas that are of great benefit to the farmers in the downstream. It is because they primarily rely on water for all their farming activities. Equally, the water is an excellent asset to the resident that is in the urban areas (Nocker, 2013). It is from this natural resource, including the natural plant that many genetic resources are composed in the forest ecosystem. Some people who visit these natural resources get a deep interest in the resources and even think of residing near the resources. The resources act as commercial goods that improve the economy of the region by bringing in more income.
People will choose to live near these natural amenities to have access to them. However, it should be taken into account that the entire productivity of all these natural resources and their influence on the economic status of a region lie primarily on the organized management that is guaranteed to these resources. Any form of policy amendments that affect the management of natural resources will automatically change the system of income generation by introducing more costs, and equally, any favorable policy formulation will result in indirect benefits that can be observed. The method has quite several strengths as well as weaknesses. Among it is strengths is the fact that the values of the likely to be distinctly defined, thus revealing the people’s willingness to pay for the available goods and services in the market. When using this method, it is comfortable to get the data and the methods put into account data that is practical with direct and indirect references from the customers. The method applied the most standard and supported economic criteria that are considered reliable. On the section of the weaknesses, this method focuses on information that is available for a limited number of goods and services. The exact economic worthiness of the products and the services are not likely to be deduced from the market exchange activities and transactions.
3.1.2 HEDONIC PRICING
The method is applied in approximating the expenses that are linked with the quality of the environment (Abdullah, 2011). The estimation relies on market transactions. The properties of the good that is marketed when using this method are connected with the value of the marketed product. It works best in the case factors that are not linked to the environment are entirely under control. The elements that are connected to environmental quality can only be approximated by this method. In the procedure that is involved while dealing with this method in economic valuation, information is gathered based on the quality of the environment; this assists in the approximation of the hedonic price (James, 2010)The geographical area and size on which the data is collected need to be determined.
In this method, the factors that make a significant contribution to the prices to realize the benefits of the natural amenities make a substantial contribution. The economic benefits that the natural resources bring about reflect a considerable aspect of the characteristics that the natural resources have. The analysis relates to the prices of natural resources concerning their components. Some of the characteristics that are used to make an economic valuation include; the approximation of the total number of the natural economic resources in this Amazonian part of Peru. The quality of the natural resources takes the first account also as well as the environmental amenities like the capability to gain access to bio-diverse resources like the natural forests (Hargrave, 2019).
The implicit marginal price of natural resources is a crucial determinant of the economic benefit of the natural resources in the Amazonian region. The method takes a measure of the margin worthiness of the natural resource (Al-Kandal, 1994). The Hedonic price analysis has implied, based on the records that it is applied, and it can generate accurate and reliable estimates in the hedonic prices of different natural resource characteristics. According to the method, it is advisable to take a keen close check on the non-marginal changes that of the natural resource levels in terms of quantities. It is a requirement that hedonic demands need to be checked on and approximated for sound decision making and valuation (jonhson, 2005). None of the methods of making hedonic applications have been proved to be valid. In this method, marginal changes are best suited when it comes to its valuation, but non-marginal changes are incompatible with this method. The only limitation that can be identified to be linked to this method is the fact that hedonic analysis will only take into account the use of values that are connected to natural resources as the amenities. The technique has strengths in that it can be applied in approximating the information based on the primary values (Mondal, 2011). The report of assets records is reliable, and the method is generally versatile. It only has a weakness in the section, assuming that respondents have the chance to choose a series of features that they prefer. A very larger magnitude of data needs to be acquired for an accurate valuation process.
3.1.3 TRAVEL COST
It is mainly used in approximating the value of recreational benefits that come as a result of the ecosystems. According to this method, it assumes that the site value is depicted by the extent to which individuals are ready and willing to pay. The simple Zonal travel cost technique uses secondary data while personal travel cost uses statistical criteria. The methods take into account quite several ways of valuation of natural resources. Some of the methods under this method that are put into practice include the replacement cost method of natural resources in this part of Peru.
The technique applies the knowledge of substituting an ecosystem as well as its goods and services to make an accurate approximation of the worthiness of an ecosystem. On the other hand, the other optional techniques that are used in the cost-based method include the substitute cost technique. The method applies the idea of putting into use the expense of availing substitutes within an ecosystem and equally considering its goods and services in the approximation of the worthiness of the products and the services of an ecosystem.
The last technique that is applied in the estimation of the worthiness of the goods and services of an ecosystem occupied with natural resources is the damage cost avoided method of valuation. The technique applies either the net value of the natural resource that is protected or the expense of the steps that are implemented to minimize the damages. The method, in this way, is the valuation of the economic benefit that is provided by the ecosystem. The natural resources that are valued by the application of this technique in the Amazonian part of Peru include the general quality of water and the water catchment areas, putting into consideration that water is a significant asset when it comes to their agricultural and the farming activities.
The other natural resources whose economic benefit and value is valued include water purification services, forest preservation services, storm control as well as the nurturing of young growing natural trees commonly termed as nursery services. In the valuation process by the use of a cost-based method, ecological assessment is done on the goods and services that come from the natural resources in the region and the likely changes that are likely to occur in the case of the products and services that the resources provide happen to change. Any change in the products and services that are provided by natural resources causes a direct difference in the ecosystem value as a whole.
Just like any other case, natural resources also do compete in terms of the provision of the best goods and services and generally how the benefits bring economic gain to the community. The method in question is suited in doing an economic valuation for resources that are known to be competing with each other in terms of goods and services and the quality of these two aspects above all (Spash, 2004). The analysis will pay more attention to the differences in the negative impacts that come out of the assessment, as well as the positive effects that come out of the valuation. It analyses this with the presence and the absence of the management measures to oversee the Assessment.
The method only takes into account the expenses as well as the gains that come as a result of the analysis. The method only takes a comparison of the benefits that need the costs of the value on the monetary worthiness. At times, the method can be called financial appraisal. The method tries to assess the total effect on an option on the welfare of the Amazonian community and in totality. The method takes into account the whole aspect of social analysis as well as the element of private interpretation. With a full implementation of this method in the Amazonian case study, the event, the project and the policy of the case study need to be clearly defined and this act as a way of ensuring that there is sufficient data of the project policy.
The impacts of the economic valuation of the natural resources need to be identified. The individual results need to be measured so that their time of occurrence can be approximated. The monetary quantification of the relevant effects so that the monetary units are obtained is also part of the procedure (David, 2012). Later the benefits and the costs are made to undergo a conversion so that their current value is obtained. The valuation indicators of the CBA are then worked out such as the net present value of the natural resources in the Amazonian region and the benefit-cost ratio to assess the extent to which the residents benefit from the natural resources and how the resources have improved economic standards of the Amazonian residents.
The cost assessment also forms part of the application in using this method. As it is always a norm in any method of economic valuation, the cost-based method also has strengths of its form as well as the weaknesses, but from the discussion that will follow, it will be concluded that the technique has many advantages as compared to its shortcomings (C.L, 2008). Through the strengths, the method brings in a profound indication of the economic value and it also stretches to make a clear explanation of the similarity of any pair of data obtained. Through the methods, it makes it more conveniently in the case where the researcher wants to make conditional use of statistics in estimating the cost of coming up with the benefits in case the goods and the services from the natural resources are not able to be marketed. The method is friendlier considering that it does not take into account a lot of data; hence this nature renders it less intense. It also uses limited resources, therefore, generally reducing the expense of making the valuation analysis (Drupp, 2018). The measures of value that are provided in case this method is applied are always flowing in terms of the economic concept value for the services and the goods that are provided.
On the side of the weaknesses, the benefits that are provided when the method is applied do not take into account the expenses, and the costs that accompany the repair damages. The omission of the costs while considering the expenses renders the method less acute as expenses should always be part of the benefits calculation for accurate and sustainable data, and feedback about the economic benefit of the natural resource in solely increasing. The complementary goods and services are not likely to produce an equal magnitude of benefits that can match the benefits that come from natural resources; hence in this way, the method incurs a shortage of accuracy. However, in general, the technique is of considerable significance when it comes to making an economic valuation of this selected region in Peru.
The technique is said to be based on the greatest best comprehended theoretical origins and contains financial, monetary terms of the natural resources. When using this method, theoretical and practical lessons that are learned, from the previous study, it can be applied in a different study case and function well (Stefan, 2017). It is best suited in approximating benefit transfer. On the section of the weaknesses, the method is more fixed in terms of its ability to measure the impacts.
The method can only measure impacts that are quantified via monetary value. The travel cost analysis makes the most accurate financial measurement of the natural resources, and this monetary value makes it more authentic as stated hence evidence as it ranked best in terms of making comparative analysis. There is always a substantial effect on the outcome of the chosen cost-benefit analysis parameters (Johnson, 2019). Despite the few highlighted weaknesses, the method still works best when it comes to the estimation and economic valuation of natural resources in this part of Peru.
3.2 STATED PREFERENCES
3.2.1 CONTINGENT VALUATION
The technique is commonly termed as the CV. The processes are aligned more into the aspect of what one can acquire in case the proposal fails, and in fact, the proposition has gone through the economic valuation of natural resources in the Amazonian parts of Peru. Some valuation questions can be open-ended, while others can be continuous. The nature of the questions can be a determinant if the research fails successively because the questions indicate the depth of the study that is being conducted. The method applies tests that are aimed at validating the economic value estimates. By the application of this method, very encouraging feedback has been obtained. The method has raised concerns in the past concerning the cases where the process did not successfully bring a solution to the situation. The technique is best suited when it comes to the aspect of endorsing an approximated WTA more directly. The varieties of the valuation questions that are used in this case study require so many estimation strategies to approximate a correct WTP or WTA. More attention is put in place in the case to avoid chances of low accuracy of WTA. The method is not that much recommended in the estimation and the measurement of passive use-values. The researcher is allowed to select and identify a survey type and come up with a methodology of defining the survey so that a correct economic valuation is done (Are there income effects on Global willingness to pay for Biodivesity conservation , 2008). A clear elaboration needs to be carried out on the questionnaire section to make sure that the respondents do not encounter a tough moment while valuating the resources. The target population needs to be defined.
In the study, we decided to come up with critically designed questions that are well formulated with objectives to make it easy to acquire any of the vital data that can be provided from people, and the data will also be more reliable considering that information will be coming directly from the people. The people will give their view in the way they perceive the state of the natural resources. The above-stated method of valuation of natural resources has an upper-hand in providing accurate data considering that the one conducting the research can take control of the context of choice.
As a result, one can approximate the sum economic worthiness or value of the natural resources in the Amazonian parts of Peru. Equally, the method grants the researcher the capability to estimate the passive use-value of the natural resources and estimation that makes the valuation to be considered more accurate. The technique also helps the researcher to be able to obtain some of the most applied different use values that can compete and out-smart the practices that employ the idea of applying evidence that is enterprise generated. The technique can be applied both directly and indirectly, considering that the data composition of the reports comes from people. The other added advantage is that the data can be obtained up to a rank of value amenity standards that is past the presiding range (Florence, 2012). Through applying the method, data that is prepared by the researcher can be comprehended by the respondent; hence the data can be described as of great value.
The strength of any case study lies in the reliability of the data that makes the foundation of the case study practical and full of data facts. However, this being among the many methods of economic valuation of the natural resources, it has weaknesses, termed as disadvantages in this case. The personal report nature of the data forms the shortcomings in this evolutional method in that in the process of acquiring data in the form of oral and written reports from the people, some can decide to make their responses carelessly, and some can decide to construct responses to question that they even don’t understand hence in the final state the data that will be at hand won’t be that wholly accurate of the nature of the data collection strategy.
As a result, the great economist that takes time to conduct such case study researches takes time to watch on the actions of the people and see what they do rather than listen to what people say and end up making surface conclusions (Numes, 2019). The technique of viewing the operation of the people has been the reason behind the accurate data that the method avails from the field. However, as a it can be observed, the above process requires authentic and primary data collection to be sure that the valuation at hand is reliable (Azofeifa, 2007). With the recent improvement and the introduction of modern technology to the research field, the economic assessment will result to a rampant creativity and innovation in the designing of the research questions and making the data collection methods successful.
The leading topic of the case study focusing on the economic sector in the Peru region. This method stretches, and it is money-related (Markgraf, 2011). Being related to welfare, anything that deals with wellness touches on the money. Welfare change can be measured to have an in-depth analysis of the social benefits. An application of biodiversity that is mainly focused on implies that caveats need to be applied to a deep understanding of the cost-benefit analysis. The same can be well used in the policy-making that equally relies on accurate data (Crossman, 2018 ). The accredited measures that are involved in welfare change include the nature of having the willingness to pay as well as the desire to accept. Considering that WTP is the amount of cash that one is ready to pay to get a particular good or service that the person needs, it then requires that the WTP amount should be increased in this case to ensure that the desired feedback is acquired.
The more the WTP, the higher the chance of receiving the desired feedback that one needs, and the lower the amount, the lower the chances of getting acute data. Equally, the WTA needs to be increased for desired data feedback in the required (Venkatachalam, 2004). The more the cash, the higher the chances of inducing the targeted person to give out the desired data. While carrying out this research, it should be given as an assumption that individuals with different financial backgrounds can provide varied data.
3.2.2 CHOICE EXPERIMENT
In this method, respondents, in most cases, find themselves at a problematic scenario in the process of announcing the financial worthiness of the non-marketed natural resources. The method only takes into account one to two valuation data facts (Agency, 2019). Some people can make sensible progress by having the respondents to choose the process of providing information. In this method, the information present is analyzed in bits to ensure that value estimates are generated. Data points range can be obtained by compiling the application of actual choice and contingent choice forms (Springer Berlin, 2008). The two methods are of more significance, too, in that they can test the range of consistency in the two data.
The method is more in questionnaire style, and as a result, its primary purpose is to at least come up with personal perceptions in the consideration that many changes come along with the attributes that cause changes in the goods services that come from the natural resources (Edward Elgar, 2000). The critical aspect that is focused on doing an economic valuation using this method is the fact that the people can be so sensitive to changes that can come along as a result of decomposed changes in the attributes in terms of the goods and services.
The method is mostly used in making approximations of the non-use values that are availed of natural resources. Among the many benefits that can be estimated using this method are the recreational values that are strongly linked to this ecosystem. The technique at times is applied when it comes to approximating the economic gains or benefits as well as the expenses that come along as a result of the natural resources. In the process of using this method of the economic valuation of other natural resources, there are vital steps that require to be adhered to so that one can use it and substantiate data and feedback.
One is required to make a clear definition of the valuation goal so that as the measurement of data and research goes on, there is an objective that one is working toward. The other procedure that one should follow is to choose a survey type and giving details on how the survey will be implemented to have a successful valuation of natural resources. Furthermore, there should be a distinct questionnaire elaboration so that the respondents can have a clear comprehension of the questions and give a correct feedback (Markantoikostas, 2009).
The method requires that a target population needs to be defined, and in this case, the target population is the surrounding community of the natural resources that are existing in the Amazonian parts of Peru and value on their economic benefits to the community at large. The methods instruct that the researcher needs to explain the sampling steps and make an evaluation of the questionnaires that frequently top gauge the consistency of the responses that come from the respondents concerning the scope problem of the case study. The researcher personally should start the survey and go-ahead to do and start up a survey and gather the data from his or her sample after making a comparison of the feedback from a variety of correspondents. Finally, the researcher will be required to carry out a statistical data analysis that will assist a lot in the estimation of approximation of the attributes of the goods and their services from the natural resources in the Amazonian region.
As it is in other methods, Contingent Choice Experiments Method has some strengths and weaknesses. The tremendous upper-hand advantage that grants this method a vote in the valuation of the natural resources is that it is only compatible with the approximation of non-use values. At times when one runs short of the methods, one can equally use it in the estimate of use-values that are acquired during the research on the valuation of the natural resources. More relevant data is acquired while using this method because when the survey is used in data collection, suitable and recommended economic data is obtained from the respondents and as a result, a correct valuation is likely to be made.
Hypothetical changes get a chance of undergoing approximations and as well as the measurement of their impacts before they happen. The results that are provided while using this method to do an economic valuation are considered more stable and acute because the data comes from correspondents who, in most cases, speak what they see and not what they hear. The method incurs a few shortcomings in the porkers of valuation of the preferences that come in place when valuating non-use values that seem to lose stability in the degree of accuracy.
The development of the questionnaire is a bit complicated, and in the process, the respondents may go through a hard time in terms of answering a question that complicated right from the nature of their design to the content that the question is valuating on. Equally, there is a high chance that there can be biasness in the case that can result in an approximated willingness to pay. In the scenario where the population that forms part of the correspondents has a high level of illiteracy, then more challenges will face the method especially in the cases where the correspondents have to read and go through the data. It means that they must understand what they learn to make correct responses, and in this case, if the correspondents have not gone to school, the whole process of data collection will incur a big blow.
When these kinds of scenarios arise, the researcher in the field can decide to go ahead and carry out an oral interview using the native language that the correspondents can understand. On the same, the researcher collecting the data to make an economic valuation can recruit local enumerators to carry out the interview using the local language and come up with data that will be composed of the responses acquired from the respondents in the official language. The Amazonian section of Peru has a good population that is literate, but the illiterate do no always miss out on any society. However, this challenge comes in the rare occasion but should be put into consideration. It should also be understood that the method also has a weakness in that the endless sequence of choices that can finally tax the respondents. Rigidities can also protrude into the economic analysis of natural resources.
The other methods under stated preferences are the benefit transfer method and Mult-criterial analysis. On the benefit transfer method, the amount of restoration is determined based on the valuation. By doing this, the quantity of recovery is valuated in that the combination of the replacement services is equally the same as the total of the services that are lost. While the valuation of natural resources, the service is measured in units like acres. The unit values that are mentioned above are believed to be constant. A natural resource is something that people can use yet it just comes from the natural environment. Some of the examples of natural resources include water and air. No human being can manage to create a natural atmosphere only that it exists naturally. Equally, water is something that we were born and we found it still exists. Wood, oil, natural gas, coal, natural forests, and other naturally existing physical; futures are of great economic benefit.
The Amazonian part of Peru at this moment is the center of this case study since it contains much of the above listed natural resources. On the benefit transfer method, much of the activities that are involved are linked to the transfer of economic approximations from the previous lessons with the same changes when it comes to top-quality natural resources. It, therefore, basically aims at approximating the benefits and inculcating approximations from a different context (graves, 2013). The method has two approaches in which it can be put in use by doing an economic valuation. In carrying out the economic assessment of natural resources in this section of Peru, purposely meant for sustainable development, the technique of unit transfer method, as well as the technique of function transfer method can be used.
The unit transfer technique applies the transfer of economic estimates from the study site to the policy site. On the other hand, the function transfer method can be used to transmit benefit functions from a different study. In this technique, the people that statistically lie under the opinion of the willingness to pay in the name of the properties of the ecosystem. The method is compatible with the application of services and the goods that come from the natural resources within this selected region. To fully apply this method without fail, some essential procedures need to fall in place as a way of ensuring the technique is well implemented.
The change in the goods and the service of the natural resources need to be identified at the policy site. The respondents or the affected populations need to be identified at the policy site. Literature research needs to be researched to ensure that the correct primary data about the economic valuation of the natural resources is made. There should be a close check assessment of the similarities that come along when the in-depth study is made in the Amazonian part of Peru. The assessment paves the way for probable transmission of the study site values. The data that has been collected from the Amazonian region of Peru needs to be chosen, and the information summarized to ensure all the information is available from the Amazonian sites. The following action needs to be the transmission of the value approximate right from the study sites to the policy sites.
The total of the expenses, as well as the benefits, need to be statistically calculated. Uncertainty of the errors that come in the process of data transfer is a high sensitivity analysis that needs to be assessed for the procedure of implementing this method to be complete. The technique has various strengths that can be depicted from the way it is carried out and how every system is implemented as compared to the role that was played by the other methods in the process of doing an acute economic valuation (Weber, 2019). The expense that comes with the process of benefit transfer is reduced because it does not involve an original valuation research study.
The economic benefit may be approximated more quickly as contrasted to the case where one is on a first-time valuation study. The method has an upper- hand in that it can go further to be used as a screening way to identifying if a more detailed and more authentic valuation study can be put in practice.
The method is compatible for use in making the total of the estimates in evaluating the recreational values that come from the natural resources in the Amazonian part of Peru. The method has few weaknesses when put into use as compared to its advantages. First of all, the method may not be the accurate economic valuation of natural resources. The accuracy of the technique across all the values that need to be estimated is the strength of the method, but this is only acute in making gross estimates hence making it not among the best choice because of estimation of a value of an economic benefit that does not relate to the total estimates with inaccurate estimations. Considering that there is no publication in this method, there may be difficulties in tracking down the correct studies of the natural resources and getting the appropriate information. Based on Mult-criterial analysis, different policy methods can be used. It can be applied in the assessment of a variety of alternatives that are wide and broad when it comes to analysis. The alternative resources that are selected are chosen based on performance concerning the selected valuation method. The returns of the alternatives are explained out in the format of the performance matrix. When using this method, the researchers can use the same model that is obtained to make their judgment. However, there are some of the procedures that need to be taken into account for the method to be productive and successful in its implementation.
First of all, the aims of this analysis need to be established so that that one can make sound decisions in terms of why the research should be done and who are the respondents that need to be involved in the valuation process. The next procedure should be the identification of the options of the Amazonian natural resources that will be evaluated. The criteria and the target objective, primarily economic efficiency, should be understood. Then each valuation criterion should be assigned a level of seriousness to show their relative significance. The scores and the weights of the overall values required to be combined and a valuation made.
The method has strengths and weaknesses that come along its implementations. Unlike the CBA method, this method takes consideration of the impacts of the valuation of natural resources that are not awarded the monetary value (Hosking, 2019). By doing this, the technique works on a weakness that is omitted in this method. Equally, the method has a sense of accountability considering that it goes ahead to involve the facilitation and entirely involvement of the relevant stakeholders. Unlike the other valuation method, this one makes it more convenient in that it adjusts the entire process of decision-making and makes it more transparent.
On the other hand, this method tends to have a few weaknesses, including the fact that it is not a built-in standard value. The comparison between the studies of the methods is limited when using the technique. It can be concluded that the economic valuation of natural resources in the Amazonian region of Peru has resulted in a sustainable development. The natural resources that exist within the area are of considerable significance to the community. However, it comes out as a subject of discussion that several methods of economic valuation of natural resources need to be applied. It has been realized from the study that each method of economic assessment used for the evaluation of natural resources in this region of Peru. It is, therefore, a requirement that before one chooses on which valuation method of economic resources needs to be used, the weaknesses and the strengths need to be assessed so that the one with more advantages out-weighing the flaws that can be used. By doing this, it will be almost impossible for any valuation exercise to fail (Alberin, 2000). A critical assessment of the methods of economic valuation results in a successful valuation of the resources in the chosen Amazonian parts of Peru.
Based on the text, each method of analyzing the economic value of natural resources in the chosen part of Peru has a specific value that they valuate. The methods have various procedures that need to be followed step by step to ensure that the valuation made is accurate. The only factor that distinguishes and grants credit to one method and disqualifies the other is the degree of accuracy that a technique comes along with in the process of data collection. Similarly, the cost factor and the whole expenses that accompany each method can be applied in evaluating the economic benefit that is gained to bring about a green economy and a sustainable development in the Amazonian parts of Peru. The valuation questions that are highlighted above are a crucial guideline in making a distinct discussion of the methods of economic valuation of natural resources.