Answer to Question #248140 in Finance for muvhuso

Question

There are three basic types of non-use value. Name and explain them 

Answer 1

---Option value: the kind of value for which people are willing to pay, even though they realize that the chances of using this values ​​are small, they pay for maintaining the option of using this value somewhere in the future. For example, when people pay for lovely dishes just in case that one day there will be some kind of solemnity for which they can finally use it, when in life that dishes often gatherimg dust for decades. Or when people pay for arrangement of the nearby park in case that one moment they will walk here, even if they are not type of people that love to walk.

---Bequest value: the kind of value for which people are willing to pay for future generations. In most cases it is applying in terms of ecology. For example, when people developing and investing in some type of projects that may give a result after a few decades, when this result could not positevly affect most of the people which were doing it, but they are glad that they making world a better place to live for the next generations.

---Existence value: the kind of value for which people are willing to pay because they feel glad for the simple fact of existing that value. For example, when people donate for saving northern hairy-nosed wombat or some another endangered species, or for saving some places in the world, such as tower of Pisa, The Grand Canyon, some kind of forest etc.