scholarly journals Contingent Valuation: Is Some Number Better than No Number?

1994 ◽  
Vol 8 (4) ◽  
pp. 45-64 ◽  
Author(s):  
Peter A Diamond ◽  
Jerry A Hausman
Keyword(s):  
Cost Analysis ◽  
Willingness To Pay ◽  
Contingent Valuation ◽  
Damage Assessment ◽  
Survey Methodology ◽  
Market Outcomes ◽  
Benefit Cost Analysis ◽  
Benefit Cost ◽  
Embedding Effect ◽  
Better Than

Without market outcomes for comparison, internal consistency tests, particularly adding-up tests, are needed for credibility. When tested, contingent valuation has failed. Proponents find surveys tested poorly done. To the authors’ knowledge, no survey has passed these tests. The ‘embedding effect’ is the similarity of willingness-to-pay responses that theory suggests (and sometimes requires) be different. This problem has long been recognized but not solved. The authors conclude that current methods are not suitable for damage assessment or benefit-cost analysis. They believe the problems come from an absence of preferences, not a flaw in survey methodology, making improvement unlikely.

What’s in, what’s out? Towards a rigorous definition of the boundaries of benefit-cost analysis

2021 ◽  
pp. 1-17
Author(s):  
Daniel Acland
Keyword(s):  
Cost Analysis ◽  
Willingness To Pay ◽  
Low Cost ◽  
Consumer Sovereignty ◽  
Benefit Cost Analysis ◽  
Rigorous Definition ◽  
Pareto Criterion ◽  
Definition Of ◽  
Benefit Cost

Abstract Benefit-cost analysis (BCA) is typically defined as an implementation of the potential Pareto criterion, which requires inclusion of any impact for which individuals have willingness to pay (WTP). This definition is incompatible with the exclusion of impacts such as rights and distributional concerns, for which individuals do have WTP. I propose a new definition: BCA should include only impacts for which consumer sovereignty should govern. This is because WTP implicitly preserves consumer sovereignty, and is thus only appropriate for ‘sovereignty-warranting’ impacts. I compare the high cost of including non-sovereignty-warranting impacts to the relatively low cost of excluding sovereignty-warranting impacts.

scholarly journals Ecotourism as a Means of Conserving Wetlands

2005 ◽  
Vol 37 (2) ◽  
pp. 463-474 ◽  
Author(s):  
Carlisle A. Pemberton ◽  
Kathleen Mader-Charles
Keyword(s):  
Cost Analysis ◽  
Contingent Valuation ◽  
Community Participation ◽  
Human Activity ◽  
Benefit Cost Analysis ◽  
The Caribbean ◽  
Benefit Cost ◽  
Nariva Swamp

The Nariva Swamp on the island of Trinidad in the Caribbean is being degraded due to increasing human activity. However, its conservation is desirable, as it is an internationally recognized wetland. The study examined an ecotourism project, with an emphasis on community participation, as a conservation approach to the Swamp, via benefit–cost analysis, where the benefits of conservation were measured by contingent valuation. Contingent valuation showed that the residents of Trinidad were willing to pay an average of $56 for conserving the Swamp. The analysis also showed that ecotourism represents an economically feasible use of ecologically fragile resources of this wetland.

Existence Values in Benefit-Cost Analysis and Damage Assessment

1992 ◽  
Vol 68 (4) ◽  
pp. 405 ◽  
Author(s):  
Richard C. Bishop ◽  
Michael P. Welsh
Keyword(s):  
Cost Analysis ◽  
Damage Assessment ◽  
Benefit Cost Analysis ◽  
Existence Values ◽  
Benefit Cost

Environmental regulation, benefit-cost analysis and the policy environment in less developed countries

1997 ◽  
Vol 2 (2) ◽  
pp. 195-221 ◽  
Author(s):  
ROB DAVIES
Keyword(s):  
Cost Analysis ◽  
Government Regulation ◽  
Free Market ◽  
Developed Countries ◽  
Market Outcomes ◽  
General Argument ◽  
Benefit Cost Analysis ◽  
Investment Projects ◽  
Benefit Cost ◽  
Physical Investment

The general argument presented by Arrow et al. runs as follows: government regulation might improve on free market outcomes, since markets sometimes misallocate resources. However, the costs of regulations need to be assessed against their presumed benefits. Benefit-cost analysis is a valuable technique for making such an assessment, even though it was developed for the appraisal of physical investment projects. However, since the technique is not perfect, it should not provide the only input into the process, but rather be part of an array of evidence.

scholarly journals Valuing Children’s Fatality Risk Reductions

2019 ◽  
Vol 10 (2) ◽  
pp. 156-177 ◽  
Author(s):  
Lisa A. Robinson ◽  
William J. Raich ◽  
James K. Hammitt ◽  
Lucy O’Keeffe
Keyword(s):  
Cost Analysis ◽  
Willingness To Pay ◽  
Risk Reduction ◽  
Selection Criteria ◽  
Primary Analysis ◽  
Fatality Risk ◽  
Benefit Cost Analysis ◽  
Adults And Children ◽  
Benefit Cost ◽  
Consistent Approach

AbstractIn benefit-cost analysis, fatality risk reductions are usually valued based on estimates of adults’ willingness to pay for changes in their own risks, regardless of whether the risk reduction accrues to adults or children. This approach reflects the relatively large number of valuation studies that address adults; however, the literature on children is growing. We review these studies, focusing on those that estimate values for both adults and children using a consistent approach to limit the effects of between-study variability. We rely on explicit selection criteria to identify studies that measure reasonably comparable outcomes and are candidates for application to analyses of U.S. policies. The ratio of values for children to values for adults ranges from 0.6 to 2.9; however, most estimates are greater than 1.5. Although some studies suggest that the divergence between child and adult values decreases as the child ages, this finding is not universal. We conclude that analysts should test the sensitivity of their results to the use of higher values for children than adults. Additional empirical research is needed to support more precise estimates of the variation in values by age that can be featured in the primary analysis.

scholarly journals Behavioral economics and policy evaluation

2014 ◽  
Vol 5 (1) ◽  
pp. 89-109 ◽  
Author(s):  
Timothy J. Brennan
Keyword(s):  
Cost Analysis ◽  
Willingness To Pay ◽  
Behavioral Economics ◽  
Policy Evaluation ◽  
Direct Democracy ◽  
Cognitive Biases ◽  
Policy Issues ◽  
Benefit Cost Analysis ◽  
Benefit Cost ◽  
Benefits And Costs

Abstract:Behavioral economics posits a number of cognitive biases and limitations, which raises questions as to whether revealed willingness to pay equals true willingness to pay. If so, benefit-cost analysis, with a number of methodological advantages, would need to be replaced. Prior analyses of the issue by Sunstein, Sugden, and Bernheim and Rangel fail to offer guidance that would avoid substituting centralized judgments for decentralized information on benefits and costs. Alternatives including using post-implementation valuations, libertarian paternalism, and direct democracy on policy issues also have conceptual or practical limitations. A tentative suggestion is democratic delegation, somewhat appealing because it is already applied to cope with bounded rationality and non-efficiency values. Viewing benefit-cost analysis as a market analogue, and restricting the domain of behavioral economics to uninformed consumers, may be useful guides. The most important guidance may be to require very strong evidence of substantial choice failure before abandoning benefit-cost analysis.

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