Avertive expenditure method of valuation
RICS Insight Paper ‘Value of natural capital - the need for chartered surveyors’ published by the Royal Institution of Chartered Surveyors in 2017 suggests the avertive expenditure or avertive behaviour method of valuation is a revealed preference method that draws on the revealed preferences of stakeholders.
The avertive expenditure method considers: ‘how much people spend to compensate themselves for the loss of a resource or facility. Bottled water in preference to piped water is sometimes quoted as an example. Care is needed that not all the extra expenditure is necessarily due to the requirement for compensation. For example, the avertive behaviour associated with living in a dismal environment may consist of lots of visits to country parks, but some of those visits might have happened anyway simply due to the pleasure of visiting the park rather than to escape the dismal environment at home.’
Other revealed preference methods include:
Approaches other than the revealed preference method include:
- Stated preference valuation.
- Value transfer/benefit transfer.
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