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2.5 Indicators relevant to forested areas: forest amenities

2.5.1 Nonmarket valuation, willingness to pay and "real income"

During the later decades of the twentieth century, natural resource and environmental economists formalized the view that the natural world provides benefits to members of society that are not accounted for in markets, and that people are willing to pay for enhancements in the quality of natural environments (for example see Krutilla and Fisher 1985, Freeman 1993). The theory and measurement of nonmarket values provides a useful perspective for understanding some of the linkages between forests and the quality of life. We briefly review the salient aspects of the theory as well as published empirical studies to shed some light on the types of forest indicators that should be used in our assessment.

The theory of nonmarket valuation and "willingness to pay" is based on a concept referred to as "consumer surplus", or the value of a consumptive good above and beyond what is actually paid for it. This concept can be represented by the metaphor "real income": "When the existence of a grand scenic wonder or a unique and fragile ecosystem is involved, its preservation and continued availability are a significant part of the real income of many individuals" (Krutilla 1967, page 779). In a footnote to this remark, Krutilla goes on to state that "These would be the spiritual descendants of John Muir, the present members of the Sierra Club, the Wilderness Society, National Wildlife Federation, Audubon Society and others to whom the loss of a species or the disfigurement of a scenic area causes acute distress and a sense of genuine relative impoverishment." Using a somewhat different metaphor, Niemi and Whitelaw (1999) compare consumer surplus to a "second paycheck" that people receive as a bonus resulting from a high-quality natural environment. In a similar fashion, Power (1996) equates local economic well-being with the sum of money income (adjusted for the local cost of living) and the value of noncommercial environmental qualities.

In an attempt to analyze and quantify "real income" derived from natural environments, economists partition total value into the sum of "use" value and "non-use" value. In a forestry context, use value refers to the set of values derived from the direct use of forest environments for activities such as timber harvesting, recreation, hunting, fishing, wildlife viewing and wild food collection. Non-use values are values not associated with current use and include such "non-uses" as maintaining the option to personally use part of the natural environment in the future (option value), leaving part of the natural environment for others to use in the future (bequest value), and the knowledge that part of the natural environment will continue to exist even if the individual holding this value never contemplates using it (existence value)(Krutilla 1967).

Non-use values thus represent psychic benefits based on standards such as altruism and ethical behavior that transcend a purely materialistic outlook (Krutilla 1967; Randall and Stoll 1983; Kopp 1992). Empirical tests seeking to distinguish altruistic behavior from self-interest are notoriously difficult to conduct (for example see Deacon and Shapiro 1975; Holmes 1990; Popp 2001). However, we regard it as plausible that people hold such values, that altruistic and ethical motivations do influence human behavior toward the conservation and protection of forest environments, and that values transcending narrow self-interest affect the quality of life.

2.5.2 Empirical evidence of willingness to pay for forest conditions

A number of recent studies have concluded that non-use values of forest ecosystems are important sources of value to society, although forest use values are, of course, also important (Walsh and others 1990; Haefele and others 1992; Holmes and Kramer 1996; Kramer and others forthcoming). Determining the relative importance of use versus non-use value is a tricky matter and has not been resolved. However, non-market forest valuation studies have indicated that social welfare is greatest when forest protection and forest use (including timber harvesting) are balanced (Garrod and Willis 1997, Boyle and Teisl 1999, Boyle and others 2001). It is natural to wonder, then, what balance of forest use and protection in the South would optimize social well-being. To date, research has not provided this answer and it remains an important problem for researchers to investigate.

Although we conclude that a balance of forest use and protection is implied by these studies, recent evidence suggests that people are concerned about the particular methods that are employed for timber harvest. In a recent study of timber harvesting preferences of Maine residents, it was found that harvest prescriptions that left 153 or 459 trees live trees per acre greater than 6 inches in diameter at breast height (d.b.h.) were significantly preferred to prescriptions that left no trees greater than 6 inches d.b.h. after harvest (Boyle and Teisl 1999, Boyle and others 2001). This research finding is in concert with the announcement made by the Chief of the USDA Forest Service in 1992 that the agency would drastically reduce the area subject to clearcutting (Backiel and Gorte 1992). This action was in response to public concern regarding harvesting practices on Federal forests.

Widespread public concern over clearcutting as a timber harvesting and regeneration method suggests the potential for ideological tension in the South between people holding those concerns and people who grow, harvest and process timber and timber products (Devall 1993, AFPA 1994). That is, we see no a priori reason that public concern with clearcutting on public forests will not manifest as concern over even-aged management practices on private forests. Because private forests produce public goods, in terms of benefits such as clean water, wildlife habitat and scenic views, the perceived impairment or loss of such benefits will cause a loss of "real income" to people who value such public goods. Thus, indicators of timber harvest intensity and the extent of even-aged management will likely be useful indicators of forest quality related to the quality of life for people whose "real income" is influenced by forest conditions.

2.5.3 "Real income" and way of life

Finally, we note that most analyses of quality of life have been based on a utilitarian framework (Cobb 2000). That is, well-being is measured by a "market-basket" approach, in which quality of life is a function of the things that people have. The "market basket" includes not only traditional market goods but also amenities such as clean air and water and natural forest amenities. A different view is that quality of life arises from the "capability" for being and opportunities for doing which are circumscribed by individual and social conditions. "The capability approach to a person's advantage is concerned with evaluating it in terms of his or her actual ability to achieve various valuable functionings as part of living" (Sen 1993, page 30). In developing countries, for example, the capabilities to find employment or to be well nourished are functions that are often limited by existing economic conditions. In developed countries, the capabilities to breathe clean air in metropolitan areas or to walk around safely at night are basic functions that are being lost (Gaertner 1993).

Extending this view of quality of life to rural America, it is evident that the ability to enter into a way of life based on farming or logging is a basic function that is being lost in modern society. To some people, the loss of these opportunities causes a diminution of the quality of life. Likewise, the capability for living in a natural landscape, particularly in the Eastern United States, has become limited in modern society. Although such life qualities are hard to measure, we think that an approach based on "capabilities" merits further thinking and development and that these issues should be kept in mind when considering forests and the quality of life in the South.