Construct Validity of Averting Cost Measures of Environmental Benefits
Construct validity is concerned with the consistency of empirical measures with theoretical relationships. This paper reviews and extends the theoretical relationship between averting costs and willingness to pay. Measures of these two theoretical constructs with empirical averting costs savings and contingent valuation from one population are used to establish construct validity of the averting cost technique used. Empirical results indicate that the contingent valuation and averting costs measures have a low correlation. Although low correlation is consistent with the construct validity of averting costs measures, these results indicate that inferences from averting cost measures are quite limited.