Contingent valuation

Contingent Valuation Market Analysis Hedonic Pricing... 

The stated preference method is a direct approach and is used in order to value both use values and non-use values by using a hypothetical market. The choice experiment (CE) and the contingent valuation (CV) methods are the two most common examples of stated preference methods. In the CE method the respondents are asked to choose a level of environmental quality from a set of varying environmental qualities, called choice set. In the CV method the respondent is asked to imagine an environmental market situation and is then asked how she would act in that given situation. CE and CV attempts to find the WTP for a good or service by asking individuals direct questions about their preferences. Alternatively, researchers can ask the respondents for their WTA. 

The Stated preferences method is a controversial method and well debated between economists. The main criticism towards the Contingent Valuation (CV) method is that the elicited values and people s WTP is based on hypothetical answers and not real economic decisions and thereby meaningless because people are not facing real payments or a real budget constraint [18]. 

Ruijgrok ECM (2004) Reducing acidification the benefits of increased nature quality. Investigating the possibilities of the contingent valuation method, Fondazione Eni Enrico Mattei, nota di lavoro 65.2004... 

Diamond P, Hausman T (1994) Contingent valuation is some number better than any number J Econ Perspect 8(4) 45-64... 

Carson R (2000) Contingent valuation a user s guide. Environ Sci Technol 34(8) 1413—1418... 

Over the past half century, the held of economics has developed a rich and extensive literature that advances the theory and methodology of estimating values associated with the myriad unmarketed yet economically valuable benefits provided by nature. While the literature is vast, the number of approaches available to estimate the economic value of ecosystem services remains limited to only a handful, each with its own strengths and weaknesses (for comprehensive reviews, see Mitchell and Carson, 1989 Freeman, 1993 Smith, 2000 Mathis et al., 2003). These include replacement costs and avoided costs analysis, factor income analysis, hedonic pricing, contingent valuation, and travel costs analysis. A discussion of these approaches follows later in this section. Although there is often considerable debate about the methods used and the accuracy of the values derived, there is little doubt that the unpriced economic value of ecosystem services is enormous.9... 

Contingent Valuation (CV) Service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives people would be willing to pay for increased fish catch or deer bag. Willingness to pay is obtained directly from the consumer in response to a hypothetical context. 

R. Mitchell and R. Carson, Using Surveys to Value Public Goods The Contingent Valuation Method, Resources for the Future, Washington, DC, 1989. 

Blumenschein, K. Johannesson, M. Use of contingent valuation to place a monetary value on pharmacy services An overview and review of the literature. Clin. Ther. 1999, 21 (8), 1402-1417. 

Benefits of Reducing Odors From Diesel Vehicles Results Of A Contingent Valuation Survey," Prepared for Environmental Protection Agency by Charles River Associates, March 1983... 

Outcomes Can be intermediate or long-term For CUA include one instrument from each of three types, disease specific generic, or preference based measurement. For CBA must use a contingent valuation method, e.g., willingness to pay Long term clinical effectiveness measured in mortality and morbidity... 

Nerlove, M. and Schuermann,T. (1995). Expectations are they rational, adaptive or naive An essay in simulation-hased interference. In Advances in Econometrics and Quantitative Economics Essays in Honor of Professor C. R. Rao, ed. G. S. Maddala, P. C. B. Phillips andT. N. Srinivasan, pp. 354-81. Basil Blackwell, Oxford. Press, J. and Soderqvist, T. (1996). On estimating the benefits of groundwater protection a contingent valuation study in Milan. Fondazione Eni Enrico Mattel, Milan, and Beijer International Institute of Ecological Economics, Stockholm. (Mimeo)... 

The direct approach to the estimation of WTP is to ask individuals how much they are willing to pay for a risk reduction. This method to assess WT P is usually referred to as the contingent valuation (CV) method. The first attempt to use the CV method to value risk reductions was by Acton (1973), who investigated the WTP for mobile coronary care units that would decrease the risk of dying after a heart attack. lones-Lee (1976) carried out an early study of the value of airline safety. Both these early studies were explorative in nature and used very small samples. Two later and much larger studies investigating the value of risk reductions are those of lones-Lee etal. (1985) and Smith and Desvousges (1987). 

The studies by both Jones-Lee et al. (1985) and Smith and Desvousges (1987) concerned mortality risks, but CV studies of morbidity risks are also starting to appear in the literature (see, for example, Berger et al., 1987 Evans and Viscusi, 1991). The contingent valuation method has also been used to evaluate tbe total economic losses from groundwater degradation see pp. 113-16 of this chapter and AppendixS of Chapter 6 for details. There are also experiments with risk-risk trade-offs instead ofWTP (see Viscusi... 

Jones-Lee, M. W. (1996). Summaries of selected puhlications on contingent valuations and other direct preference-elicitation methods in the fields of health and safety. Appendix A to a report to the Health Safety Executive. 

This chapter is structured as follows. The next section describes available benefit estimation methods and the choice of estimation method for this case study. The third section is devoted to some issues related to the application of the selected methodology - the contingent valuation method (CVM) - in the Italian context. Design of the CVM study constitutes another section. The results and empirical methods of the study are then presented, followed by a discussion. 

The contingent valuation method, however, has the potential directly to consider such values and it was therefore selected for the Milan case study. An application of this method also permits the researchers to focus specifically on the quality characteristics that are most relevant from a policy point of view, in terms of pollution control options. 

European Science Foundation/Fondazione Eni Enrico Mattei Contingent Valuation Survey for the Economic Valuation of Water Quality... 

Diamond, P. A. and ffausman, J. A. (1994). Contingent valuation is some number better than no number Journal of Economic Perspectives, 8,45-64. 

Hanemann, W. M. (1994). Valuing the environment through contingent valuation. Journalof Economic Perspectives, 8,19-43. 

Johansson, P.-O., Kristrdm, B. and Maler, K.-G. (1989). Welfare evaluations in contingent valuation experiments with discreet response data comment. American Journalof Agricultural Economics, 71,1054-6. 

Kristrdm, B. (1993). Comparing continuous and discreet contingent valuation questions. Environmental and Resource Economics, 3,63-71. 

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