Method Factsheet - Production Function Approach

The production function approach (PFA) can be used in situations where a marketed good or service is produced with both man-made and ecosystem inputs. The PFA is a method designed to value indirect use values. It is highly appropriate for capturing ecological and monetary values, as well as anthropocentric instrumental values, including both direct and indirect use values. Production functions are calculated using data on the productivity of marketed goods, ecosystem service inputs (such as insects pollinating crops) and human inputs (e.g. labour, agricultural inputs). Once derived it is possible, for example, to explore the role of ecosystem services in supporting agricultural production.