Sequence Effects in the Valuation of Multiple Environmental Programs Using the Contingent Valuation Method

In contingent valuation, the willingness to pay for hypothetical programs may be affected by the order in which programs are presented to respondents. With inclusive lists, economic theory suggests that sequence effects should be expected. However, when policy makers allocate public budgets to several environmental programs, they may be interested in assessing the value of the programs without the valuations being affected by the order in which the programs are presented. Using single-bounded dichotomous choice contingent valuation questions, we show that if respondents have the possibility to revise their willingness-to-pay answers, sequence effects are mitigated. (JEL Q51, Q54)

Measuring non-use value of environmental goods using the contingent valuation method:problems of information and cognition and the application of cognitive questionnaire design methods

Much interest now focuses on the use of the contingent valuation method (CVM) to assess non-use value of environmental goods. The paper reviews recent literature and highlights particular problems of information provision and respondent knowledge, comprehension and cognition. These must be dealt with by economists in designing CVM surveys for eliciting non-use values. Cognitive questionnaire design methods are presented which invoke concepts from psychology and tools from cognitive survey design (focus groups and verbal reports) to reduce a complex environmnetal good into a meaningful commodity that can be valued by respondents in a contingent market. This process is illustrated with examples from the authors' own research valuing alternative afforestation programmes. -Authors

Measuring the value to the public of pig welfare improvements: a contingent valuation approach

The welfare of farm animals is a policy area that has increased greatly in importance in recent years. When deciding whether a proposed policy should be implemented, it can be useful for policymakers to compare the costs of the proposed improvement with the perceived benefits. The costs are relatively straightforward to calculate but little is known about the benefits. The Contingent Valuation Method (CVM), a direct survey-based method, can be used to shed some light on this. This approach elicits the willingness-to-pay (WTP) for the provision of some public good or service. This paper reports the results of a contingent valuation study of the value of welfare improvements for growing pigs. Attitudes and opinions with regard to form animal welfare are explored and WTP elicited for various pig welfare improvements including increases in space allowance, environmental enrichment and research into improved pig housing design. The results reveal a positive WTP for these improvements. However, it is also noteworthy that a significant proportion of the general public is willing to pay nothing for these improvements. Overall, the study illustrates the usefulness of the CVM approach as a tool for policymakers in assessing the merits of possible policy initiatives affecting the welfare of animals.

Do focus groups contribute anything to the contingent valuation process?

The qualitative aspects of the Contingent Valuation Method (CVM) are largely ignored by (environmental) economists. This paper aims to instigate a discussion on (a) the usefulness of qualitative data to the contingent valuation process in general; and (b) the use and applicability of the focus group method in particular. We consider the range and uses of focus groups within the CVM and highlight problems with their analysis that have, to date, largely been ignored. A potential solution to circumvent the problem of non-independence of group data is suggested. While there are several distinct and worthwhile uses for qualitative data, focus groups should not automatically be taken as the only or best method to produce these insights even though they are the major one considered in this article. (C) 1999 Elsevier Science B.V. All rights reserved.

Combining preference ordering and contingent valuation methods to assess non market benefit of alternative afforestation projects

The application of the contingent valuation method (CVM) in this paper incorporates a prior preference ordering of several alternative future afforestation programmes which could be implemented in Ireland over the next decade. This particular experimental design is thereby shown to reveal the potentially conflicting preferences of different groups within society. These findings are used to devise appropriate CVM scenarios to take account, not only of the efficiency gains of choosing a single policy alternative over others, but also the effects on the distribution of non market benefit between different groups within society, arising from choice between alternatives. (C) 1998 Elsevier Science Ltd. All rights reserved.

Rural communities and wind farms: a contingent valuation investigation

Using the contingent valuation method, this study investigates the preferences of local people for a wind farm that is planned in the Province of Rome. We estimate the reductions in their bimonthly electrical bills over a period of time that respondents are willing to accept as compensation for the installation of the wind farm. Our results suggest that respondents who perceive that the wind farm generates substantial negative impacts on landscape beauty ask higher reductions than others, while respondents who believe that the wind farm produces economic benefits for local communities ask lower reductions than others. Finally, we find that the demand for compensative measures is influenced particularly by socio-economic factors such as age and education.

Testing the stability of the benefit transfer function for discrete choice contingent valuation data

This paper examines the stability of the benefit transfer function across 42 recreational forests in the British Isles. A working definition of reliable function transfer is Put forward, and a suitable statistical test is provided. A novel split sample method is used to test the sensitivity of the models' log-likelihood values to the removal of contingent valuation (CV) responses collected at individual forest sites, We find that a stable function improves Our measure of transfer reliability, but not by much. We conclude that, in empirical Studies on transferability, considerations of function stability are secondary to the availability and quality of site attribute data. Modellers' can study the advantages of transfer function stability vis-a-vis the value of additional information on recreation site attributes. (c) 2008 Elsevier GmbH. All rights reserved.

Learning design contingent valuation (LDCV): NOAA guidelines, preference learning and coherent arbitrariness

We extend the contingent valuation (CV) method to test three differing conceptions of individuals' preferences as either (i) a-priori well-formed or readily divined and revealed through a single dichotomous choice question (as per the NOAA CV guidelines [K. Arrow, R. Solow, P.R. Portney, E.E. Learner, R. Radner, H. Schuman, Report of the NOAA panel on contingent valuation, Fed. Reg. 58 (1993) 4601-4614]); (ii) learned or 'discovered' through a process of repetition and experience [J.A. List, Does market experience eliminate market anomalies? Q. J. Econ. (2003) 41-72; C.R. Plott, Rational individual behaviour in markets and social choice processes: the discovered preference hypothesis, in: K. Arrow, E. Colombatto, M. Perleman, C. Schmidt (Eds.), Rational Foundations of Economic Behaviour, Macmillan, London, St. Martin's, New York, 1996, pp. 225-250]; (iii) internally coherent but strongly influenced by some initial arbitrary anchor [D. Ariely, G. Loewenstein, D. Prelec, 'Coherent arbitrariness': stable demand curves without stable preferences, Q. J. Econ. 118(l) (2003) 73-105]. Findings reject both the first and last of these conceptions in favour of a model in which preferences converge towards standard expectations through a process of repetition and learning. In doing so, we show that such a 'learning design CV method overturns the 'stylised facts' of bias and anchoring within the double bound dichotomous choice elicitation format. (C) 2007 Elsevier Inc. All rights reserved.

Parametric and non-parametric estimates of willingness to pay for forest recreation in Northern Ireland: A discrete choice contingent valuation study with follow-ups

In this study we show that forest areas contribute significantly to the estimated benefits from om outdoor recreation in Northern Ireland. Secondly we provide empirical evidence of the gains in the statistical efficiency of both benefit and parameter estimates obtained by analysing follow-up responses with Double Bounded interval data analysis. As these gains are considerable, it is clearly worth considering this method in CVM survey design even when moderately large sample sizes are used. Finally we demonstrate that estimates of means and medians of WTP distributions for access to forest recreation show plausible magnitude, are consistent with previous UK studies, and converge across parametric and non-parametic methods of estimation.

A contingent valuation of the 2012 London Olympic games - A regional perspective

Major sporting events such as the Olympics are usually assessed in terms of economic impacts. Recently, policy makers have begun to place greater emphasis on possible intangible effects (such as civic pride, legacy of sporting facilities) associated with such events. To date, little work has been carried out on quantifying these effects in a meaningful way. This study uses contingent valuation methodology to assess the value of the proposed 2012 London Olympic Games. The survey is carried out on the provincial city of Bath, approximately 2 hours west of London. Conducting the survey outside of London is justified on the basis that the organizers of London 2012 have emphasized the value of the event to the United Kingdom as a whole. The results suggest that positive intangible effects are associated with the event and residents outside of London are willing to pay toward funding.

Valuing the cultural monuments of Armenia: Bayesian updating of prior beliefs in contingent valuation

The most appropriate way to measure the social benefits of conserving built cultural heritage sites is to ask the beneficiaries of conservation interventions how much they would be willing to pay for them. We use contingent valuation - a survey-based approach that elicits willingness to pay (WTP) directly from individuals - to estimate the benefits of a nationwide conservation of built cultural heritage sites in Armenia. The survey was administered to Armenian nationals living in Armenia, and obtained extensive information about the respondents' perceptions of the current state of conservation of monuments in Armenia, described the current situation, presented a hypothetical conservation program, elicited WTP for it, and queried individuals about what they thought would happen to monument sites in the absence of the government conservation program. We posit that respondents combined the information about the fate of monuments provided by the questionnaire with their prior beliefs, and that WTP for the good, or program, is likely to be affected by these updated beliefs. We propose a Bayesian updating model of prior beliefs, and empirically implement it with the data from our survey. We found that uncertainty about what would happen to monuments in the absence of the program results in lower WTP amounts. © 2008 Pion Ltd and its Licensors.