Existence Values and Normative Economics: Implications for Valuing Water Resources

The definitional issues and conceptual framework of existence value are explored. It is argued that existence value may have two components (1) an economic component that is consistent with utility maximizing behavior and (2) an ethical component that is inconsistent with normative benefit‐cost assumptions. Issues as how to appropriately include a measure of existence value within a utility maximizing framework are also explored. Difficult conceptual problems arise out of this discussion. Caution is suggested to the water resources analyst in including existence value within an economic framework.