Economic Valuation of Coral Reefs
Methodology v2.1
October 2007
WRI’s economic valuation methodology provides a simple and replicable method for estimating the value of
coral reefs and mangroves in the Caribbean. The methodology uses the concept of “ecosystem services”–
the tangible benefits ecosystems provide which sustain and fulfill human life—as the basis for measurement.
The approach looks primarily at the direct economic benefits provided by these resources; it does not
attempt to calculate the Total Economic Value (TEV) of coral reefs and mangroves, which would include non-
use values (for instance, the ‘existence value’ non-users place on the presence of the reef). The methodology
focuses instead on three important ecosystem goods and services associated with coral reefs: fisheries, tourism,
and shoreline protection services. These services comprise an integral part of many Caribbean economies. The
methodology also offers guidance on estimating the wider (indirect) impact on the economy of these resources,
the consumer surplus associated with their use, and the potential losses or gains in value associated with
changes in ecosystem condition.
1) Coral Reef Associated Fisheries
A financial analysis approach is used for assessing the value of reef and mangrove-associated fisheries. This
approach involves totaling the revenues from the commercial fishing and fish processing industries, and
subtracting the costs of theses activities, arriving at net financial benefits. Wages, taxes, and fees are treated
as “pass-throughs” to the economy, and are included in total benefits. Three elements of local (non-
commercial) fishing are also assessed – fishing for consumption, sale, and pleasure. The methodology also
assigns a multiplier to estimate the wider economic benefits associated with the fishing industry. Ultimately,
the methodology will assess how future changes in ecosystem condition will affect the economic value of
fisheries through changes in the productivity of the reef and m