The
total net economic benefit, or economic surplus, is the sum of consumer surplus and
producer surplus.
Changes in net economic
benefit can be equated with value of ecosystem services.
Application
of the market price method requires data to estimate consumer surplus and producer surplus. To estimate consumer surplus, the demand
function must be estimated. This requires time series data on the quantity demanded at different
prices, plus data on other factors that
might affect demand, such as income or other demographic
data. To estimate producer surplus, data on variable
costs of production and revenues
received from the good are required.