Better than their reputation - A case for mail surveys in contingent valuation

Though contingent valuation is the dominant technique for the valuation of public projects, especially in the environmental sector, the high costs of contingent valuation surveys prevent the use of this method for the assessment of relatively small projects. The reason for this cost problem is that typically only contingent valuation studies which are based on face-to-face interviews are accepted as leading to valid results. Especially in countries with high wages face-to-face surveys are extremely costly considering that for a valid contingent valuation study a minimum of 1,000 completed face-to-face interviews is required. In this paper we try a rehabilitation of mail surveys as low-budget substitutes for costly face-to-face surveys. Based on an empirical contingent valuation study in Northern Thailand we show that the validity of mail surveys can be improved significantly if so-called citizen expert groups are employed for a thorough survey design.contingent valuation; Environmental Valuation; Equity

What Do Respondents Bring to Contingent Valuation? A Comparison of Monetary and Labor Payment Vehicles

With contingent valuation, both the goods being valued and the payment vehicles used to value them are mostly hypothetical. However, although numerous studies have examined the impact of experience with the good on willingness to pay, less attention has been given to experience with payment vehicles. This paper examines how this influences responses to a contingent valuation scenario of maintenance for irrigation canals. Specifically, the paper uses a split-sample survey to investigate the effects of experience with monetary and labor payment vehicles on the acceptance of a contingent valuation scenario and protest bids. Using convergent validity tests, we found that experience acquired from using both monetary and labor payment vehicles reduces the asymmetries in acceptance rates. These findings suggest that experience with payment vehicles reduces time/money response asymmetries in the contingent valuation method.contingent valuation, payment vehicles, numéraires, experience

Do scenario context and question order influence WTP? The application of a model of uncertain WTP to the CV of the morbidity impacts of air pollution

This paper presents a general framework for modelling responses to contingent valuation questions when respondents are uncertain about their ‘true’ WTP. These models are applied to a contingent valuation data set recording respondents’ WTP to avoid episodes of ill-health. Two issues are addressed. First, whether the order in which a respondent answers a series of contingent valuation questions influences their WTP. Second, whether the context in which a good is valued (in this case the information the respondent is given concerning the cause of the ill-health episode or the policy put into place to avoid that episode) influences respondents’ WTP. The results of the modelling exercise suggest that neither valuation order nor the context included in the valuation scenario impact on the precision with which respondents answer the contingent valuation questions. Similarly, valuation order does not appear to influence the mean or median WTP of the sample. In contrast, it is shown that in some cases, the inclusion of richer context significantly shifts both the mean and median WTP of the sample. This result has implications for the application of benefits transfer. Since, WTP to avoid an episode of ill-health cannot be shown to be independent of the context in which it is valued, the validity of transferring benefits of avoided ill-health episodes from one policy context to another must be called into question

Administering Contingent Valuation Surveys in Developing Countries

In this paper I discuss some of the issues that have arisen and some of the lessons learned over the last ten years about administering CV surveys in developing countries. The discussion is organized around five distinct issues: (1) ethical problems in conducting contingent valuation surveys; (2) explaining what a contingent valuation study is all about; (3) interpreting responses to contingent valuation questions; (4) setting referendum prices; and (5) constructing joint public-private CV scenarios. This list is not meant to be exhaustive, but it will hopefully provide the reader with insights into some of the issues involving in conducting CV surveys in developing countries.Contingent valuation survey

The Provision Point Mechanism and Scenario Rejection in Contingent Valuation

The provision point mechanism mitigates free-riding behavior in economic experiments. In two contingent valuation method surveys, we implement the provision point design. We ask respondents for their perceptions about the success of the provision point mechanism. We find that respondents who believe that the provision point would not be met are more likely to say no to a contingent valuation dichotomous choice question. The scenario rejection that arises may result in biased willingness-to-pay estimates.provision point mechanism, contingent valuation, willingness to pay, public goods, Environmental Economics and Policy,

A direct test of socially desirable responding in contingent valuation interviews

--environmental valuation,contingent valuation method,socially desirable responding,loss aversion,reforestation

VALIDATING CONTINGENT VALUATION WITH SURVEYS OF EXPERTS

Contingent-valuation estimates for white-water boating passengers are compared with Likert ratings by river guides. The approach involves asking whether passengers and their guides ordinally rank alternative flows the same. The National Oceanic and Atmospheric Administration's Contingent Valuation Panel (1993) suggested "one might want to compare its (contingent-valuation's) outcome with that provided by a panel of experts." River guides constitute a counterfactual panel of "experts." For commercial trips, optimum flows are 34,000 cfs and 31,000 cfs for passengers and guides, and the comparable figures for private trips are 28,000 cfs and 29,000 cfs. In the NOAA Panel framework, passengers can evaluate the consequences of various river flows and translate this into contingent-valuation responses.Resource /Energy Economics and Policy,

State Tameness: A New Approach for Credit Constrains

We propose a new definition for tameness within the model of security prices as It\^o processes that is risk-aware. We give a new definition for arbitrage and characterize it. We then prove a theorem that can be seen as an extension of the second fundamental theorem of asset pricing, and a theorem for valuation of contingent claims of the American type. The valuation of European contingent claims and American contingent claims that we obtain does not require the full range of the volatility matrix. The technique used to prove the theorem on valuation of American contingent claims does not depend on the Doob-Meyer decomposition of super-martingales; its proof is constructive and suggest and alternative way to find approximations of stopping times that are close to optimal.arbitrage, pricing of contingent claims, continuous-time financial markets, tameness

The Profile of a “Warm-Glower”: A Note on Consumer’s Behavior and Public Policy Implications

The paper focuses on the ongoing debate on non-market valuation, including the valuation environmental goods, and the opportunity to use contingent valuation for policy guidance. In fact, contingent valuation critics argue that reported willingness to pay answers do not reflect real economic preferences and, for this reason, should not be used in cost-benefit analysis The attempt to contravene such critique finds many supporters. This paper starts from the latter stream of research and adds two original contributions. First, it sheds light on the individual warm glow motivational profile, exploring the empirical relationship between individual’s socio-economic characteristics and warm glow. Second, it discusses some implications of the presence of warm glow for public policy.Economic value, Contingent valuation, Willingness to pay; Latent factor, Consumer motivations, Warm glow, Ego driven warm glow, Social oriented warm glow, Public policy design