METHODOLOGY FOR ASSESSING THE ECONOMIC DAMAGE OF ECOLOGICAL HAZARDS IN URBAN AREAS: CONCEPTUAL SHORTCOMINGS OF NON-MARKET VALUATION METHODS AND THE INTEGRAL DAMAGE FUNCTION APPROACH

Abbos Saydullaev and Iqboloy Choriyorova1

GREEN ECONOMY AND DEVELOPMENT, 2026, vol. 4, issue 6

Abstract: This study provides a critical theoretical-bibliographic analysis of methodological challenges inassessing the economic damage caused by three specific ecological hazards in urban areas — constructionsite pollution, traffic congestion, and industrial waste — through the lens of non-market valuation methods. Thepaper examines the conceptual limitations of both stated and revealed preference approaches and proposesthe integral damage function mechanism, grounded in the Impact Pathway Approach, as a theoretically wellfoundedalternative for translating environmental hazards into economic losses and healthcare expenditureimpacts.A theoretical-bibliographic review was conducted by systematically analyzing peer-reviewed literature fromScopus- and Web of Science-indexed journals. The study synthesizes foundational and contemporary workson contingent valuation, hedonic pricing, choice experiments, and damage function approaches within theframework of urban environmental economics. No primary empirical data or statistical datasets were employed;the analysis is exclusively conceptual and literature-based.The analysis reveals that conventional non-market valuation methods have certain systematic conceptuallimitations when applied to urban ecological hazards.: contingent valuation exhibits hypothetical bias, scopeinsensitivity, and WTP-WTA disparity; hedonic pricing is compromised by omitted variable bias and spatialconfounding; and choice experiments face cognitive burden and status quo bias. The integral damage functionapproach offers a structured causal chain linking emission sources through atmospheric dispersion and doseresponserelationships to quantifiable health and economic endpoints. A multi-level conceptual frameworkdiagram is developed, illustrating the transformation pathway from environmental hazards to economic lossesand healthcare costs across macro, meso, and micro analytical levels.

Keywords: non-market valuation; damage function; urban ecological hazards; construction pollution; traffic congestion; industrial waste; contingent valuation; hedonic pricing; Impact Pathway Approach; health cost assessment; environmental economics (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:teu:ged000:v:4:y:2026:i:6:id:10820

DOI: 10.5281/zenodo.20593593

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