Economic modeling and systems analysis for water cultivation function of forests

In recent years, attempts to evaluate the value of an environment property using the monetary term has been accomplished. In addition, depending on the environment property characteristic, methods such as the replacement cost method, hedonic price method (HPM), and the contingent valuation method (CVM) have been used. In the water cultivation function of forests (WCFF), which is dealt with in the paper, the benefit occurs in the water supply and demand market; the beneficiary doesn´t recognize the benefit itself. Using HPM and CVM, which are based on a consumer´s utility function, it is difficult to evaluate the environment property that has such a nature. In this study, we show the WCFF evaluation model that incorporates both fixed quality of WCFF and the life water supply-demand system. Based on the afore-mentioned point of view, by measuring a water supply curve and a water demand curve, the value of WCFF in Japan is calculated. As a result, the economic value of WCFF is estimated at 249 billion yen