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 19: Public Preferences Toward Environmental Risks: The Case of Trihalomethanes

Richard T. Carson and Robert Cameron Mitchell

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

Extract

* Richard T. Carson and Robert Cameron Mitchell 19.1 Introduction This chapter presents the results of an in-depth study conducted in Herrin, a small Illinois town with a population of about 10 000 people.1 Our study focused on the issue of the benefits of a town installing a carbon filtration system to remove trihalomethanes (THMs) from its drinking water system. The removal of THMs from drinking water has long been a controversial issue and the class of chemicals has a number of properties that make them an interesting topic for those interested in risk analysis. We examine the public’s preferences toward a proposed policy that would reduce the level of THMs in the town’s drinking water supply. The process of explaining the key characteristics of the risks associated with THMs and the policy decision whether to reduce that risk are explored in the context of a contingent valuation (CV) survey designed to measure willingness to pay (WTP) to implement the policy. A variety of tests are conducted to assess the properties of the WTP estimates for use in policy decisions. THMs are a class of chemicals created during the process of chlorinating drinking water (Culp, 1984). They have been consistently shown to be carcinogenic but represent a low-level risk (Culp, 1984; Attias et al., 1995). In November 1979 the US Environmental Protection Agency (EPA) under the 1974 Safe Drinking Water Act set an interim Maximum Contaminant Level (MCL) for total trihalomethanes (THMs) of 0.10 mg/l as an annual average (44...

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