Non disponibileWhenever events or a proposed change in policy affect quality or availability of
environmental resources and public goods, either explicit or implicit cost-benefit
analyses must often be undertaken. It has been recognised that the value of these
goods is not explicitly determined through market transactions and the absence of
markets makes it extremely difficult to establish a monetary value for access to these
goods. Economists answered this challenge by developing methods of nonmarket
valuation for public goods. Methods for valuing environmental goods have been
categorized as indirect and direct.
Direct methods, as the Contingent Valuation Method (CVM), ask consumers
what they would be willing to pay (WTP) or accept (WTA) for a change in an
environmental amenity. They are examples of stated preference techniques that
establish hypothetical markets for public goods. Direct methods have the main
advantage that they allow the measurement of non-use values but they are commonly
criticised because of the hypothetical nature of the question (i.e. \u2018hypothetical bias\u2019)
and the fact that the actual behavior is not observed. Researchers have identified also
other problems and biases, such as strategic bias, information bias, and starting
point bias (see detailed discussion of the problems in Cummings et al., 1986 and
Mitchell and Carson, 1989).
To investigate the validity of direct methods, researchers have compared the
WTP estimates derived by applying the CVM with the WTP estimates based on
indirect methods of valuation (Bishop and Heberlin, 1979; Bishop et al., 1983; Seller
et al. 1985; Cameron, 1992; Adamowicz et al., 1994; Carson et al., 1996; Azevedo et
al., 2003). Indirect methods, such as the Travel Cost Method (TCM), use actual
choices made by consumers. These constitute revealed preferences over goods. The
basic premise of the TCM is that the time and the travel cost expenses that people
incur to visit a site represent the price of access to the site. The WTP to visit a site is
estimated based on the number of trips that people make at different travel costs. The
TCM avoids the criticism of being based on hypothetical behavior but it has other
problems such as how to handle multiple-day trips, how to value time costs, how to
choose the functional form of the demand for trips and how to incorporate temporal
uncertainty (Cameron, 1992).
This list can be extended but we argue that one of the main limitations is that
the TCM focuses on defining a household to have the same utility level as a single
individual. It assumes that a household acts as an elementary decision making unit
where all resources are pooled and household decisions are made by a single decision
maker. In particular, travel cost information is limiting in that it can reveal consumer
preferences for non-market goods only capturing family behavior, while instead the
WTP is an individual based measure. The correspondence between WTP estimates
from the CVM and the TCM is maintained only in the case when considering a
sample of singles