Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation

1998 ◽  
Vol 80 (1) ◽  
pp. 64-75 ◽  
Author(s):  
Wiktor Adamowicz ◽  
Peter Boxall ◽  
Michael Williams ◽  
Jordan Louviere
Keyword(s):  
Contingent Valuation ◽  
Stated Preference ◽  
Choice Experiments ◽  
Use Values ◽  
Passive Use Values

State of the Art of Contingent Valuation

2020 ◽  
Author(s):  
Tim Haab ◽  
Lynne Lewis ◽  
John Whitehead
Keyword(s):  
Contingent Valuation ◽  
Discrete Choice ◽  
Stated Preference ◽  
Revealed Preference ◽  
Choice Experiments ◽  
Discrete Choice Experiments ◽  
Actual Behavior ◽  
Stated Preference Methods ◽  
Valuation Methods ◽  
Hypothetical Scenario

The contingent valuation method (CVM) is a stated preference approach to the valuation of non-market goods. It has a 50+-year history beginning with a clever suggestion to simply ask people for their consumer surplus. The first study was conducted in the 1960s and over 10,000 studies have been conducted to date. The CVM is used to estimate the use and non-use values of changes in the environment. It is one of the more flexible valuation methods, having been applied in a large number of contexts and policies. The CVM requires construction of a hypothetical scenario that makes clear what will be received in exchange for payment. The scenario must be realistic and consequential. Economists prefer revealed preference methods for environmental valuation due to their reliance on actual behavior data. In unguarded moments, economists are quick to condemn stated preference methods due to their reliance on hypothetical behavior data. Stated preference methods should be seen as approaches to providing estimates of the value of certain changes in the allocation of environmental and natural resources for which no other method can be used. The CVM has a tortured history, having suffered slings and arrows from industry-funded critics following the Exxon Valdez and British Petroleum (BP)–Deepwater Horizon oil spills. The critics have harped on studies that fail certain tests of hypothetical bias and scope, among others. Nonetheless, CVM proponents have found that it produces similar value estimates to those estimated from revealed preference methods such as the travel cost and hedonic methods. The CVM has produced willingness to pay (WTP) estimates that exhibit internal validity. CVM research teams must have a range of capabilities. A CVM study involves survey design so that the elicited WTP estimates have face validity. Questionnaire development and data collection are skills that must be mastered. Welfare economic theory is used to guide empirical tests of theory such as the scope test. Limited dependent variable econometric methods are often used with panel data to test value models and develop estimates of WTP. The popularity of the CVM is on the wane; indeed, another name for this article could be “the rise and fall of CVM,” not because the CVM is any less useful than other valuation methods. It is because the best practice in the CVM is merging with discrete choice experiments, and researchers seem to prefer to call their approach discrete choice experiments. Nevertheless, the problems that plague discrete choice experiments are the same as those that plague contingent valuation. Discrete choice experiment–contingent valuation–stated preference researchers should continue down the same familiar path of methods development.

scholarly journals Economic Valuation for Cultural and Passive Ecosystem Services Using a Stated Preference (Contingent Valuation Method (CVM)) Case of the Elgeyo Watershed Ecosystem, Kenya

2021 ◽  
Vol 2021 ◽  
pp. 1-12
Author(s):  
Justus E. Eregae ◽  
Paul Njogu ◽  
Rebecca Karanja ◽  
Moses Gichua
Keyword(s):  
Ecosystem Services ◽  
Stated Preference ◽  
Contingent Valuation Method ◽  
Economic Valuation ◽  
Economic Value ◽  
Valuation Method ◽  
Significant Difference ◽  
Use Values ◽  
Ecological Conservation ◽  
Passive Use Values

Valuation of ecosystem services (ESs) can be typical as use values and passive use values. However, the prevailing conventional markets provide economic instruments such as price tags to ecosystem use values, but rarely on passive use values. This is limited since it does not provide comprehensive ecological values that will adequately support rational decision-making processes regarding ecological conservation. The study adopted the contingency valuation method (CVM) where three hundred and eighty households of communities living within the Elgeyo watershed were sampled. The findings recorded 97% of the population was willing to pay for the ESs quoted. Individual maximum WTP ranged between 1 USD and 57.1 USD (cultural), 1 USD and 95.2 USD (bequest), and 1 USD and 76.2 USD (biodiversity conservation). The overall mean maximum WTP was 7.4 ± 0.34 USD, 9.1 ± 0.49 USD, and 11.1 ± 0.68 USD for the cultural, bequest, and biodiversity, respectively. The multivariate regression (maximum WTP as a function of administrative location, education, income, sex, age, and livestock number) exhibited a significant difference regardless of multivariate criteria used, where Wilks’ lambda has F (75,203) = 4.03, p < 0.001 . The findings provide an economic value for nonuse values that can be incorporated in total economic valuation (TEV) studies locally as well as provide an impetus on payment of ecosystem services (PES) in Kenya.

Can nonmarket values be used as indicators of forest sustainability?

1995 ◽  
Vol 71 (6) ◽  
pp. 702-711 ◽  
Author(s):  
G. Cornelis van Kooten
Keyword(s):  
Contingent Valuation ◽  
Contingent Valuation Method ◽  
Economic Indicator ◽  
Economic Benefits ◽  
Forest Policies ◽  
Valuation Method ◽  
Forest Sustainability ◽  
Use Values ◽  
Passive Use Values ◽  
Nonmarket Values

A distinction is made between the economic benefits of recent BC forest policies and their income distributional consequences. Changes in employment and tourism are examples of the latter, while economic surpluses accruing to recreationists and citizens as passive-use values are an important form of economic benefits. Recent controversies about the contingent valuation method for detemining passive-use values are reviewed, as are estimates of the values residents attach to the protection of forest amenities in BC. It is argued that constantly updated estimates of annual nonmarket values can be used as an economic indicator of forest sustainability, to be compared against the sustainable rent from logging operations. Key words: Indicators of economic sustainability in forestry; contingent valuation of forest amenities; recreation benefits and tourism

The economics of soil structural degradation under cropping: some empirical estimates from New Zealand

Soil Research ◽  
1998 ◽  
Vol 36 (5) ◽  
pp. 831 ◽  
Author(s):  
F. G. Scrimgeour ◽  
T. G. Shepherd
Keyword(s):  
Public Policy ◽  
New Zealand ◽  
Contingent Valuation ◽  
Soil Structure ◽  
Scientific Research ◽  
Land Values ◽  
Policy Response ◽  
Structural Degradation ◽  
Empirical Estimates ◽  
Use Values

Soil structural degradation is a problem of some arable farms in New Zealand. This paper presents economic estimates of the significance of the loss of soil structure to farmers and the Manawatu region of New Zealand. Contingent valuation surveys of farmers and the wider community were used to estimate both use and non-use values. The results show the significance of compaction on both farm profits and land values, together with the lack of knowledge of the wider community concerning this problem. They reinforce the importance of careful farm practice, further scientific research, and a considered public policy response.

scholarly journals Incentive Compatible Referenda and the Valuation of Environmental Goods

1998 ◽  
Vol 27 (2) ◽  
pp. 132-139 ◽  
Author(s):  
Laura O. Taylor
Keyword(s):  
Willingness To Pay ◽  
Contingent Valuation ◽  
Contingent Valuation Method ◽  
Experimental Tests ◽  
Choice Experiments ◽  
Hypothetical Bias ◽  
The Real ◽  
Environmental Goods ◽  
Incentive Compatible ◽  
Valuation Method

Recent attempts to test the validity of the contingent valuation method have relied on laboratory-type experiments. In these experiments, willingness to pay responses in hypothetical choice experiments are compared with responses from choice experiments requiring actual payments. Often evidence of hypothetical bias is found. Critical for these experimental tests of hypothetical surveys is that the methodology used to elicit willingness to pay from subjects in the real-payment experiment be demand revealing. If it is not, then differences in responses to hypothetical and real valuation questions could be due to free-riding in the real-payment survey and not due to hypothetical bias in the hypothetical survey. This paper reports on experiments that implement a theoretically incentive-compatible revelation mechanism (a closed referendum) to elicit responses to valuation questions in both hypothetical and real experiments. As in earlier studies, evidence of an upward hypothetical bias is found.

Moving beyond the Contingent Valuation versus Choice Experiment Debate: Presentation Effects in Stated Preference

2020 ◽  
Vol 96 (1) ◽  
pp. 1-24
Author(s):  
Patrick Lloyd-Smith ◽  
Ewa Zawojska ◽  
Wiktor Adamowicz
Keyword(s):  
Contingent Valuation ◽  
Choice Experiment ◽  
Stated Preference
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