How Much Is God Worth?

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Economics has traditionally put a value only on goods and services that are directly consumed. However, in 1967 John Krutilla proposed that economists should also assign a value to the knowledge that a particular wilderness, endangered species or other object in nature exists. By the 1980s, the concept of “existence value” was coming into use by a number of economists for purposes such as estimating the benefits of government actions or calculating damage assessments against corporations whose actions had harmed the environment. In 1993, a panel of leading economists convened by the National Oceanographic and Atmospheric Administration declared that, although great care must be exercised to prevent misuse, existence value should be incorporated into the set of economic tools available to government analysts.

Other leading economists have argued that the concept of existence value is inconsistent with accepted economic theory and in practice will often yield implausible results. The number of features existing in the world about which at least some people will have strong feelings is virtually limitless. Yet, most estimates of existence value have addressed only a select few objects in nature.

The attitude of a person with respect to a state of the world will be greatly influenced by the cultural lens applied. In many cases, that lens will be religious. The values placed on wilderness and endangered species reflect the important role these objects have in environmental religion. The sources of environmental religion are found in figures such as David Brower and John Muir and in New England transcendentalism. The transcendentalists in turn drew heavily on the faith of their Puritan forbearers.

What inspires faith for one person may be regarded by another as a diversion from the true faith. Proponents of wilderness look to these areas as a place of spiritual inspiration. Others, however, see the preservation of wilderness as a waste of good resources and a symbolic assault on the value system of belief in economic progress. The latter group will perceive a “negative existence value” in the creation of a wilderness. It is misguided for society to apply formal methods of economic valuation to try to resolve such claims of competing religious groups.

In summary, a fundamental problem with existence value is that in many cases it attempts to answer a religious question with an economic method. Making estimates of the existence value of an object in nature is then both as silly and as meaningless as asking how much God is worth. Economists should abandon the use of existence value and concentrate their scarce resources on more useful projects that are in fact suited to their analytical tools.