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Using Contingent Valuation in the Design of Payments for Environmental Services Mechanisms: A Review and Assessment

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  • Dale Whittington
  • Stefano Pagiola

Abstract

As the use of payments for environmental services (PES) programs for conservation has grown in developing countries, the use of stated preference methods, particularly contingent valuation (CV) surveys, to estimate the maximum amount that users of environmental services (“buyers”) would be willing to pay has also increased. This paper reviews 25 CV studies conducted in the context of PES programs (CV-PES) and assesses their quality and usefulness for designing PES programs. Almost all these studies attempt to estimate the demand of downstream water users for upstream watershed protection and, more generally, for improved water services. Most studies were methodologically uninspired and generally low-quality applications of stated preference methods, with limited policy relevance. The quality and usefulness of CV-PES studies could be substantially improved at only a modest increase in costs. Copyright 2012, Oxford University Press.

Suggested Citation

  • Dale Whittington & Stefano Pagiola, 2012. "Using Contingent Valuation in the Design of Payments for Environmental Services Mechanisms: A Review and Assessment," World Bank Research Observer, World Bank Group, vol. 27(2), pages 261-287, August.
  • Handle: RePEc:oup:wbrobs:v:27:y:2012:i:2:p:261-287
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    2. Lankia, Tuija & Neuvonen, Marjo & Pouta, Eija & Sievänen, Tuija, 2014. "Willingness to contribute to the management of recreational quality on private lands in Finland," Journal of Forest Economics, Elsevier, vol. 20(2), pages 141-160.
    3. Anthony Amoah & Peter G. Moffatt, 2017. "Estimating demand for reliable piped-water services in urban Ghana: An application of competing valuation approaches," University of East Anglia School of Economics Working Paper Series 2017-01, School of Economics, University of East Anglia, Norwich, UK..
    4. Moreno-Sanchez, Rocio & Maldonado, Jorge Higinio & Wunder, Sven & Borda-Almanza, Carlos, 2012. "Heterogeneous users and willingness to pay in an ongoing payment for watershed protection initiative in the Colombian Andes," Ecological Economics, Elsevier, vol. 75(C), pages 126-134.
    5. Desbureaux, Sébastien & Brimont, Laura, 2015. "Between economic loss and social identity: The multi-dimensional cost of avoiding deforestation in Eastern Madagascar," Ecological Economics, Elsevier, vol. 118(C), pages 10-20.
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    8. Kaczan, David & Swallow, Brent M. & Adamowicz, W.L. (Vic), 2013. "Designing a payments for ecosystem services (PES) program to reduce deforestation in Tanzania: An assessment of payment approaches," Ecological Economics, Elsevier, vol. 95(C), pages 20-30.
    9. repec:eee:ecoser:v:11:y:2015:i:c:p:22-31 is not listed on IDEAS
    10. Franco, Daniele & Luiselli, Luca, 2014. "Shared ecological knowledge and wetland values: a case study," MPRA Paper 66496, University Library of Munich, Germany.
    11. Wiktor L. Adamowicz & Klaus Glenk & Jürgen Meyerhoff, 2014. "Choice modelling research in environmental and resource economics," Chapters,in: Handbook of Choice Modelling, chapter 27, pages 661-674 Edward Elgar Publishing.
    12. Kassahun, Habtamu Tilahun & Nicholson, Charles F. & Jacobsen, Jette Bredahl & Steenhuis, Tammo S., 2016. "Accounting for user expectations in the valuation of reliable irrigation water access in the Ethiopian highlands," Agricultural Water Management, Elsevier, vol. 168(C), pages 45-55.
    13. Lankia, Tuija & Neuvonen, Marjo & Pouta, Eija & Sievänen, Tuija, 2014. "Willingness to contribute to the management of recreational quality on private lands in Finland," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182651, European Association of Agricultural Economists.
    14. repec:eee:resene:v:49:y:2017:i:c:p:48-61 is not listed on IDEAS

    More about this item

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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