MINERAL KING VALLEY: DEMAND THEORY AND RESOURCE VALUATION
In the theoretical discussions of chapters 3 and 4 we generally assumed that decisions about the use of a natural environment would be made on the basis of expected values. In chapter 5 problems of measurement in an empirical case were addressed in an effort to assess the value of the Hells Canyon site for hydroelectric power production. Although this and subsequent efforts in chapters 6 and 7 yielded results which we believe are of some interest and value to researchers and policymakers, it must be acknowledged that the methods, constrained by limits on research resources, were relatively crude. Moreover, the strong implications for policy in both the Hells Canyon and White Clouds cases derive at least in part from assumptions about the dynamic behavior of the alternative benefit streams, based on trends in the demand for wilderness recreation and the technology of extractive resource use.
A question might then be raised concerning our ability to assess a project to develop an area for recreational purposes, as proposed for Mineral King, where there is no dramatic difference in the dynamic behavior of benefits from extractive and nonextractive uses. In such a case, a more sophisticated approach to the measurement of the net gains at each moment or short period in time from each of the alternative uses of the environment is indicated. In particular, closer attention must be given to the link between value and demand, and to the specification and measurement of demand.
Recall that in the Hells Canyon case, net benefits from power production were measured as the difference in costs between the least-cost alternative source and a project of given size, neglecting the potential welfare gain from increased consumption of electricity as a function of a lower price. Although the neglect was justified there, clearly it is not when we consider the effect on consumption of ski recreation following the develop-