Table of Contents

Handbook on Contingent Valuation

Handbook on Contingent Valuation

Elgar original reference

Edited by Anna Alberini and James R. Kahn

The Handbook on Contingent Valuation is unique in that it focuses on contingent valuation as a method for evaluating environmental change. It examines econometric issues, conceptual underpinnings, implementation issues as well as alternatives to contingent valuation. Anna Alberini and James Kahn have compiled a comprehensive and original reference volume containing invaluable case studies that demonstrate the implementation of contingent valuation in a wide variety of applications. Chapters include those on the history of contingent valuation, a practical guide to its implementation, the use of experimental approaches, an ecological economics perspective on contingent valuation and approaches for developing nations.

Chapter 2: Fifty Years of Contingent Valuation

V. Kerry Smith

Subjects: economics and finance, environmental economics, valuation, environment, environmental economics, valuation


V. Kerry Smith*, † 2.1 Introduction Econometric analyses and testing of economic models began during the last 50 years. Contingent valuation (CV) developed over the same time period.1 CV uses survey questions to elicit information that allows economic values for non-market resources to be estimated. Today contingent valuation occupies a strange position in economics. A significant component of the CV research, in both the USA and Europe, has been conducted to evaluate policy alternatives (see Carson, 2003). Little of this work has been associated with litigation. Yet in considering the relevance of CV estimates, the US Office of Management and Budget’s (2003) draft guidance for preparing benefit–cost analysis as part of the evaluation of regulations reiterates several of the criteria for a reliable study that were recommended by the National Oceanic and Atmospheric Administration’s (NOAA) Panel. The NOAA Panel was charged, in the early 1990s, with responsibility for evaluating contingent valuation for use in natural resource damage assessments.2 Current research on contingent valuation has pursued methodological issues in the structure of choice and open-ended valuation questions (Cameron et al., 2002), experimental design (Kanninen, 2002), interrelationships between public goods (Bateman et al., 2004), as well as numerous policy issues ranging from estimating the willingness to pay for reductions in risk of premature death (Krupnick et al., 2002 and Alberini et al., 2001) to managing waste from large-scale hog operations (Mansfield and Smith, 2002). Many of the issues raised in early contingent valuation surveys have been ‘rediscovered’ under...

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