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The Measurement of Subjective Value and Its Relation to Contingent Valuation and Environmental Public Goods

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  • Mel W Khaw
  • Denise A Grab
  • Michael A Livermore
  • Christian A Vossler
  • Paul W Glimcher

Abstract

Environmental public goods—including national parks, clean air/water, and ecosystem services—provide substantial benefits on a global scale. These goods have unique characteristics in that they are typically “nonmarket” goods, with values from both use and passive use that accrue to a large number of individuals both in current and future generations. In this study, we test the hypothesis that neural signals in areas correlated with subjective valuations for essentially all other previously studied categories of goods (ventromedial prefrontal cortex and ventral striatum) also correlate with environmental valuations. We use contingent valuation (CV) as our behavioral tool for measuring valuations of environmental public goods. CV is a standard stated preference approach that presents survey respondents with information on an issue and asks questions that help policymakers determine how much citizens are willing to pay for a public good or policy. We scanned human subjects while they viewed environmental proposals, along with three other classes of goods. The presentation of all four classes of goods yielded robust and similar patterns of temporally synchronized brain activation within attentional networks. The activations associated with the traditional classes of goods replicate previous correlations between neural activity in valuation areas and behavioral preferences. In contrast, CV-elicited values for environmental proposals did not correlate with brain activity at either the individual or population level. For a sub-population of participants, CV-elicited values were correlated with activity within the dorsomedial prefrontal cortex, a region associated with cognitive control and shifting decision strategies. The results show that neural activity associated with the subjective valuation of environmental proposals differs profoundly from the neural activity associated with previously examined goods and preference measures.

Suggested Citation

  • Mel W Khaw & Denise A Grab & Michael A Livermore & Christian A Vossler & Paul W Glimcher, 2015. "The Measurement of Subjective Value and Its Relation to Contingent Valuation and Environmental Public Goods," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-19, July.
  • Handle: RePEc:plo:pone00:0132842
    DOI: 10.1371/journal.pone.0132842
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    References listed on IDEAS

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    1. Corso, Phaedra S & Hammitt, James K & Graham, John D, 2001. "Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 165-184, September.
    2. Christian Vossler & Michael McKee, 2006. "Induced-Value Tests of Contingent Valuation Elicitation Mechanisms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 35(2), pages 137-168, October.
    3. Catherine L. Kling & Daniel J. Phaneuf & Jinhua Zhao, 2012. "From Exxon to BP: Has Some Number Become Better Than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 3-26, Fall.
    4. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
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    Cited by:

    1. Picardy, Jamie Ann & Cash, Sean B. & Peters, Christian, . "Uncommon Alternative: Consumers’ Willingness to Pay for Niche Pork Tenderloin in New England," Journal of Food Distribution Research, Food Distribution Research Society, vol. 51(2).

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