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From Hopeless to Curious? Thoughts on Hausman’s “Dubious to Hopeless” Critique of Contingent Valuation

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  • Timothy C. Haab
  • Matthew G. Interis
  • Daniel R. Petrolia
  • John C. Whitehead

Abstract

Hausman (2012) “selectively” reviews the CVM literature and fails to find progress over the 18 years since Diamond and Hausman (1994) argued that unquantified benefits and costs are preferred to benefits and costs quantified by CVM for policy analysis. In these comments, we provide counter-arguments to the claims made by Hausman. We provide these counterarguments not with the intent to convince the reader that the debate over contingent valuation is settled but rather to urge the community of economists to recognize that the intellectual debate over contingent valuation is still ongoing and that plenty of work remains to be done. We review the literature and argue that (1) hypothetical bias raises important research questions about the incentives guiding survey responses and preference revelation in both real and hypothetical settings that contingent valuation can help answer, (2) the WTP-WTA gap debate is far from settled and the debate raises important research questions about the future design and use of benefit cost analyses of which contingent valuation will undoubtedly be a part, and (3) CVM studies do, in fact, tend to pass a scope test and there is little support for the assertion that an adding up test is the definitive test of CVM validity. Key Words:

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Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 13-07.

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Date of creation: 2013
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Handle: RePEc:apl:wpaper:13-07

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Thoughts on Hausman's "dubious to hopeless" critique of contingent valuation
    by John Whitehead in Environmental Economics on 2013-03-20 12:50:57
  2. Environmental Valuation & Cost-Benefit News: From Hopeless to Curious? Thoughts on Hausman’s “Dubious to Hopeless” Critique of Contingent Valuation
    by John Whitehead in Environmental Economics on 2013-03-24 23:44:36
  3. My "featured lunch speaker" presentation at CNREP
    by John Whitehead in Environmental Economics on 2013-03-27 23:22:46
  4. Funny, but it's still rock and roll to me
    by Tim Haab in Environmental Economics on 2013-05-01 15:58:10
  5. Where is the love?
    by Tim Haab in Environmental Economics on 2013-05-01 11:19:45
  6. NAAFE special session on non-market valuation: moderated discussion
    by John Whitehead in Environmental Economics on 2013-05-27 11:14:34
  7. Thoughts on Hausman's "dubious to hopeless" critique of contingent valuation
    by ? in Environmental Economics on 2013-03-20 12:50:00
  8. Funny, but it's still rock and roll to me
    by ? in Environmental Economics on 2013-05-01 16:58:00
  9. Fighting Lazy Hausman Cites
    by Tim Haab in Environmental Economics on 2013-09-26 08:47:04
  10. Be quiet, I order you!
    by John Whitehead in Environmental Economics on 2013-10-14 22:38:25
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Cited by:
  1. Andreas C. Drichoutis & Jayson L. Lusk & Valentina Pappa, 2014. "Elicitation formats and the WTA/WTP gap: A study of climate neutral foods," Working Papers 2014-2, Agricultural University of Athens, Department Of Agricultural Economics.
  2. John Whitehead & Melissa S. Weddell & Pete Groothuis, 2014. "Mitigating Hypothetical Bias in Stated Preference Data: Evidence from Sports Tourism," Working Papers 14-06, Department of Economics, Appalachian State University.

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