Advantages of the Productivity Method
¥ In general, the methodology is
straightforward.
¥ Data requirements are limited, and the
relevant data may be readily available, so
the method can be relatively inexpensive to apply.
Issues and Limitations of the Productivity Method
¥ The method is limited to valuing those resources that can be
used as inputs in production of
marketed goods.
¥ When valuing an ecosystem, not all
services will be related to the production of marketed
goods. Thus, the inferred value of that
ecosystem may understate its true
value to society.
¥ Information is needed on the scientific
relationships between actions to improve
quality or quantity of the resource and the actual outcomes of those actions. In some cases, these relationships may not be well known or understood.
¥ If the changes in the natural resource
affect the market price of the final good, or the
prices of any other production inputs, the method becomes much more
complicated and difficult to apply.