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."-~ 90 A. }. DOUGLAS AND R. L. JOHNSON of the recent literature assessments reported by Loomis! and Douglas.2 Rather, .. selective literature citations are employed to illustrate central points. ESTIMATING DOLLAR VALUES FOR NONMARKET GOODS Estimating reasonably accurate dollar magnitudes for the nonmarket benefits pro- vided by rivers and streams allows resource managers to compare the values of mar- ket and nonmarket goods and services. Such dollar estimates are an invaluable aid in many resource allocation arenas. Bishop et al.4 note that nonmarket resource valuation measures the breadth and depth of the public 's prefere~ces with respect to alternative uses for natural resources. Just et al. S note that a consistent cost-benefit analysis of alternative resource allocations attempts to distinguish between public preferences and social costs. One advantage of using dollar magnitudes to quantify public preference intensity with dollar values is that it allows one to compare mar- ket and nonmarket preferences with each other and with the social cost of supplying various output levels of market and nonrnarket goods. Voting, for example, in pub- lic referenda, also quantifies public preferences with respect to the allocation of resources and output levels of nonrnarket goods.4 But voting cannot express the value of a market good in units that are commensurate with the social costs of pro- ducing these goods.s Welfare economics-the science of measuring society's gains and losses from vari- ous social initiatives-devises measures of the aggregate dollar benefits conferred above and beyond costs for any particular allocation of renewable resources.s Just et al.s distinguish carefully between alternative measures of the aggregate social benefits conferred by various goods such as the consumer surplus or the aggregate willingness-to-pay.s For the purposes of the ensuing discussion, however, consumer surplus and willingness-to-pay are interchangeable terms. Both measures can be used to quantify the net social benefits conferred by goods and services. Note that a dollar measure of aggregate social benefits conferred per unit of output is a measure of value. The price of a market good or service is another measure of value, but price does not measure value as accurately as the net social benefits conferred. For example, if social costs are greater than price at some output level, the net social benefits conferred are negative, regardless of the magnitude of the price. Suppose that the price of gasoline rises, thereby generating an increase in aggre- gate expenditures on trips to a riverine outdoor recreation site. The social benefits provided. by the site decline, yet the expenditures on trips to the site can increase. The consumer surplus provided by the site (Figure 1) is a measure of the social benefits that allows expenditures to rise while benefits fall or vice versa. A demand curve relates the quantity of a good that consumers are willing to purchase in a given period of time to the price. A supply curve relates the quantity per unit time of a good that entrepreneurs are willing to supply to the price of the good. In Figure 1, the upward sloping curve SP' is the supply curve; the negatively sloping curve DP' is the demand curve. The rectangle OPP'A is total expenditures per unit time; the area PDP' underneath the demand curve but above the horizontal price line PP' marked with vertical stripes is the consumer surplus.s The producer surplus is the region SPP' that is marked with horizontal stripes. The total social surplus is the sum of the consumer surplus and the producer surplus. The consumer surplus is a widely used measure of net aggregate social benefits conferred by both market and nonrnarket goods.s The producer surplus is a measure