DEBATES IN THE METHODOLOGY OF ECONOMICS AND THE VALUE OF AN ENVIRONMENTAL AMENITY

The article discusses the extent to which the research methodology of heterodox economics is suited to the economic impact analysis of land use and real estate applications. Fulfilling the requirements of context-sensitivity, sub-optimality and pragmatism is argued to be relevant for increasing our conceptual understanding of property value in its multiple dimensions, and consequently for improving the process and outcome of environmental amenity valuation. Here three different issues need to be addressed: (1) the appropriate economic theory framework; (2) the particular geographic and institutional context; (3) the perceived costs vs. benefits of any impacts. Such an analysis is shown in a case study on water valuation in the Netherlands.