Daniel Kahneman and Contingent Valuation

In its early days, contingent valuation (CV) seemed to offer a powerful and flexible method for generating monetary values for benefits and harms that were not directly priced by markets. However, even in those early days there were concerns that citizens’ responses to CV surveys did not correspond with the assumptions underpinning the method and too often displayed substantial systematic anomalies. In the 1980s and 1990s, Kahneman and various co-authors undertook a series of studies that raised questions about the orthodoxy of ‘true preferences’ for the sorts of goods being evaluated via CV and expressed grave doubts about the feasibility of resolving fundamental issues by refinements of study design. Some tentative suggestions were made for alternative ways in which monetary values might be obtained for use in public sector decision making, but Kahneman himself did not develop these ideas in any detail, instead deploying his 21st century research in other directions.