Toward Improved Economic Analysis Using Contingent Valuation: Some Methodological Considerations Applied To River Toxics And Dam Removal
This paper addresses conceptually and empirically some of the biases commonly associated with contingent valuation (CV) elicitation of willingness to pay (WTP) values for non-market goods and services. More specifically, the study focuses on testing for scope, context, and sequence effects in CV mail surveys as well as the assumption of well-defined preferences in mail questionnaires and how this assumption might bias WTP estimates. Our results suggest that the absence of scope effects in the some CV mail surveys might be a result of the complexity or multidimensional aspect of the policy in question (i.e. dredging with and without dam removal) and the assumption that increases in scale of the public good are easier to be comprehended and then translated into dollar values than increases in scope by the average respondent. Moreover, results of the initial mail survey suggest that individuals may not have well defined preferences for goods (i.e. dam removal) with which they are not familiar or experienced. Pre-testing of the structured elicitation groups suggests that this alternative elicitation format based on a philosophy of constructive preferences may lead to more thoughtful and rational WTP values.
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