Non-Market valuation is a set of techniques that aims at reflecting the economic value of changes, in the availability or quality, of goods and services that are not intended to be traded in the market (e.g., health care, education, environment). The objective is to estimate the impacts of these changes on one’s utility and by extension on the social welfare, in order to manage these goods and services by considering their true value to society.
In a neoclassical perspective, goods and services are valued in a utilitarian framework, i.e., individuals are rational, have various categories of desires and wishes (e.g., food, housing clothes…), and are able to classify them according to their preferences. They aim at reaching a maximum level of individual welfare according to their income constraint (utility maximization under budget constraint). Moreover, individuals are able to value the impact of an additional unit of good on their own welfare, which is.
