Four ways to price a national park reveal a 40-fold value gap

How much is a mountain landscape actually worth? For the Ugam Chatkal State Nature National Park in Uzbekistan, the answer depends entirely on which economic lens you apply. A new study published in One Ecosystem on 17 January 2025 compared four prominent methods for valuing cultural ecosystem services — the recreational and spiritual benefits people draw from nature — and found estimates ranging from US$1.62 million to US$65.19 million per year for the very same park. That is a forty-fold gap, and it exposes a fundamental problem for governments trying to fold nature into their national accounts.

The stakes are far higher than one park in the Western Tien Shan. The System of Environmental-Economic Accounting – Ecosystem Accounting, or SEEA-EA, is the international statistical standard adopted by the United Nations to record ecosystems and their services in both physical and monetary terms, aligned with the System of National Accounts that produces GDP. Because the basis of national accounts is the concept of exchange value — the price actually paid in a market transaction — the SEEA-EA seeks to apply exchange values to ecosystem services. For provisioning services like food, fibre and fuel, and for regulating services like carbon sequestration, established valuation techniques already exist. Cultural services, however, are the stubborn case.

Cultural ecosystem services have the character of public goods: they are non-excludable and non-rivalrous, which makes them vulnerable to free-riding. People hike, picnic and ski without paying for the underlying ecological contribution, so these services are not traded on markets and have no directly observable price. The SEEA-EA defines cultural services as benefits arising from direct or indirect interaction of people with ecosystems during recreation, knowledge development, relaxation and spiritual reflection. Without a universal benchmark, valuers have developed several distinct approaches, and the new study put four of them head to head: resource rent, travel cost, simulated exchange value and consumer expenditure.

The resource rent method, often highlighted as appropriate for ecosystem accounting, calculates the difference between the total revenue of production and the costs of labour, intermediate inputs and produced assets. In the case study, the researchers drew on statistics from Uzbekistan’s Statistics Agency for 64 hotels, 18 tourist and leisure camps, and 59 restaurants and cafes in the Bostanlik Region, using the formula RR = TR − (IC + LC + FC). Total revenue for accommodation and catering came to US$5.136 million in 2018, and after deducting US$3.516 million in combined costs, the resource rent for the park’s recreation was US$1.62 million — the lowest estimate of the four.

The travel cost method works on a completely different logic, tracing back to Harold Hotelling’s 1947 proposal. Instead of measuring what businesses earn, it measures what visitors spend — fuel, accommodation, food and fees — to reveal the value they attribute to a site. The researchers surveyed 600 respondents at four spots in the park between August and October 2018, categorising them as Tashkent citizens or domestic visitors, each on one-day or multiple-day trips. Using an Individual Travel Cost Method with a Poisson count data model, they constructed a demand curve in which the number of trips falls as travel costs rise. Integrating that curve yields a consumer surplus per trip of US$53.78 for one-day Tashkent visitors and as much as US$166.78 for multiple-day Tashkent visitors. Scaled across an estimated 612,000 annual visits, the consumer surplus approach produced the highest value of all: US$65.19 million per year.

But there is a catch. Consumer surplus measures welfare — the maximum visitors would be willing to pay — and the SEEA-EA explicitly excludes it, because exchange values assume that, on average, all buyers pay the same price. Using consumer surplus in accounting would imply that each visitor pays their personal maximum, an assumption the study calls potentially too strong for simulating a market. So the highest estimate, while revealing the park’s full welfare value, is incompatible with the accounting standard it was meant to serve.

The third method, simulated exchange value, offers a way out. Introduced by Caparrós and colleagues, it simulates market transactions where prices do not exist by combining a supply function with a demand curve estimated through non-market valuation. In a technical first, the researchers used the demand curve from the travel cost survey to simulate an entrance fee for the park, which currently has free access. Because maintenance costs are independent of visitor numbers, the marginal cost of a visit is zero, and the simulation sought the fee that maximises revenue under conditions of monopolistic competition — justified because Uzbekistan has few recreational areas and Ugam Chatkal is the only park close to the capital. The first-order condition of the revenue function yields a simulated fee equal to −1/β₁, mathematically identical to the consumer surplus per trip in this model. The resulting exchange value was US$24.46 million per year — lower than the consumer surplus, higher than the resource rent, and, crucially, aligned with SEEA-EA principles.

The fourth method, consumer expenditure, simply totals what visitors actually spend on travel, accommodation, food and entertainment. Testing basic and full expenditure packages for one-day and multiple-day visitors, the method valued the park’s recreation between US$8.74 million and US$13.50 million annually. This sits close to the average of the other approaches and uses raw travel cost data that represent exchange values, keeping it compatible with accounting. The researchers note that without the ecosystems and the cultural services they provide, these consumer expenses would not occur at all — visitors see meals at cafes within the park’s natural surroundings as integral to the recreational experience.

The study’s conclusion is pointed: the resource rent method likely underestimates the true value of the service when used for accounting, because all expenses made to offer consumer surplus are deducted from the service’s value, whereas expenditure-based methods treat those costs as an expression of value. The authors postulate that the simulated exchange value method seems best aligned with the valuation needs for cultural services under SEEA-EA, since it provides a market-conforming value in the case that such a market would exist, matching the valuation principles of the System of National Accounts. Notably, the research confirms a proposition by Caparrós et al. (2017) that the travel cost method, which estimates a Marshallian demand function, can be used to simulate exchange values — meaning the travel cost method can be applied in three distinct ways: with actual expenses as a value indicator, to construct a demand curve for consumer surplus, or to construct a demand curve that simulates exchange value.

The choice of method, the study argues, must depend on the purpose of the valuation. If the full welfare value of recreation needs to be shown, the travel cost method with consumer surplus is the appropriate choice. If a suitable entrance fee needs to be estimated for a public park, the simulated exchange value indicates which fee generates maximum revenue — though a park manager may deliberately opt for a lower fee to serve education or habitat restoration rather than revenue optimisation. The confidence intervals estimated for the survey-based approaches indicate considerable uncertainty within each estimate, but the difference between approaches is substantially larger, suggesting that the choice of method is a more important source of uncertainty than the standard error in the estimates themselves. As the UN standard moves from paper to practice, the study recommends further application of simulated exchange value for valuing the tourism and recreation services of ecosystems — and demonstrates that standardising method choice in SEEA guidelines matters even more than refining the data behind them.

Subject of Research: A comparison of valuation methods for cultural ecosystem services in support of ecosystem accounting

Article Title: A comparison of valuation methods for cultural ecosystem services in support of ecosystem accounting

Article References: Bronzes, A., Hein, L., Groeneveld, R., & Pulatov, A. (2025). A comparison of valuation methods for cultural ecosystem services in support of ecosystem accounting. One Ecosystem, 10, Article e108556. https://doi.org/10.3897/oneeco.10.e108556

Image Credits: AI Generated

DOI: 10.3897/oneeco.10.e108556

Keywords: comparison, valuation, methods, cultural, ecosystem, services, support, accounting, scientific research