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Do existence values for cost benefit analysis exist?

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  • M. Common
  • I. Reid
  • R. Blamey

Abstract

The use of the contingent valuation method to generate estimates of existence value for input to cost benefit analysis requires that individuals have utility functions defined over the relevant arguments. The validity of the assumption that the required utility functions generally exist has been questioned. It has been argued that some individuals will respond on the basis of lexicographic preference orderings. It has also been argued that some individuals do not consider that market, or individual willingness to pay, criteria are appropriate where existence value type issues are at stake. The paper considers survey evidence bearing upon these arguments. It is concluded that the evidence is consistent with the view that it is incorrect to proceed on the assumption that individuals generally satisfy the assumptions required for the existence of existence values for use in cost benefit analysis. Copyright Kluwer Academic Publishers 1997

Suggested Citation

  • M. Common & I. Reid & R. Blamey, 1997. "Do existence values for cost benefit analysis exist?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 225-238, March.
  • Handle: RePEc:kap:enreec:v:9:y:1997:i:2:p:225-238
    DOI: 10.1007/BF02441379
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    References listed on IDEAS

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    1. Kirchgassner, Gebhard & Pommerehne, Werner W, 1993. "Low-Cost Decisions as a Challenge to Public Choice," Public Choice, Springer, vol. 77(1), pages 107-115, September.
    2. Jeffrey W. Bennett, 1984. "Using Direct Questioning To Value The Existence Benefits Of Preserved Natural Areas," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 28(2-3), pages 136-152, 08-12.
    3. Spash, Clive L. & Hanley, Nick, 1995. "Preferences, information and biodiversity preservation," Ecological Economics, Elsevier, vol. 12(3), pages 191-208, March.
    4. Thomas H. Stevens & Jaime Echeverria & Ronald J. Glass & Tim Hager & Thomas A. More, 1991. "Measuring the Existence Value of Wildlife: What Do CVM Estimates Really Show?," Land Economics, University of Wisconsin Press, vol. 67(4), pages 390-400.
    5. R.K. Blamey & Mick S. Common & John C. Quiggin, 1995. "Respondents To Contingent Valuation Surveys: Consumers Or Citizens?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 263-288, December.
    6. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489, April.
    7. Edwards, Steven F., 1986. "Ethical Preferences And The Assessment Of Existence Values: Does The Neoclassical Model Fit?," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 15(2), October.
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    Citations

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    Cited by:

    1. Cooper, Philip & Poe, Gregory L. & Bateman, Ian J., 2004. "The structure of motivation for contingent values: a case study of lake water quality improvement," Ecological Economics, Elsevier, vol. 50(1-2), pages 69-82, September.
    2. Joan Costa-Font & Joan Rovira, 2005. "Eliciting preferences for collectively financed health programmes: the 'willingness to assign' approach," Applied Economics, Taylor & Francis Journals, vol. 37(14), pages 1571-1583.
    3. Martinez-Espineira, Roberto, 2006. "A Box-Cox Double-Hurdle model of wildlife valuation: The citizen's perspective," Ecological Economics, Elsevier, vol. 58(1), pages 192-208, June.
    4. Olof Johansson-Stenman, 1998. "The Importance of Ethics in Environmental Economics with a Focus on Existence Values," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 429-442, April.
    5. Mandy Ryan & Fernando San Miguel, 2003. "Revisiting the axiom of completeness in health care," Health Economics, John Wiley & Sons, Ltd., vol. 12(4), pages 295-307.
    6. Kontogianni, A. & Tourkolias, C. & Machleras, A. & Skourtos, M., 2012. "Service providing units, existence values and the valuation of endangered species: A methodological test," Ecological Economics, Elsevier, vol. 79(C), pages 97-104.
    7. Soderholm, Patrik & Sundqvist, Thomas, 2003. "Pricing environmental externalities in the power sector: ethical limits and implications for social choice," Ecological Economics, Elsevier, vol. 46(3), pages 333-350, October.
    8. Szabó, Zoltán, 2011. "Reducing protest responses by deliberative monetary valuation: Improving the validity of biodiversity valuation," Ecological Economics, Elsevier, vol. 72(C), pages 37-44.
    9. Gelso, Brett R. & Peterson, Jeffrey M., 2005. "The influence of ethical attitudes on the demand for environmental recreation: incorporating lexicographic preferences," Ecological Economics, Elsevier, vol. 53(1), pages 35-45, April.
    10. Mika Rekola, 2003. "Lexicographic Preferences in Contingent Valuation: A Theoretical Framework with Illustrations," Land Economics, University of Wisconsin Press, vol. 79(2), pages 277-291.
    11. Stern, David I., 1997. "Limits to substitution and irreversibility in production and consumption: A neoclassical interpretation of ecological economics," Ecological Economics, Elsevier, vol. 21(3), pages 197-215, June.

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