Edited by Anna Alberini and James R. Kahn
Chapter 18: Combining Stated-Choice and Stated-Frequency Data with Observed Behavior to Value NRDA Compensable Damages: Green Bay, PCBs, and Fish Consumption Advisories
William S. Brefﬂe, Edward R. Morey, Robert D. Rowe and Donald M. Waldman* 18.1 Introduction The chapter uses a case study to demonstrate the use of stated-choice and stated-preference (i.e., contingent behavior) questions, combined with data on actual choices, to estimate compensable damages in a Natural Resource Damage Assessment (NRDA).1 We summarize the stages in a NRDA, including survey design and implementation, data collection and analysis, model development and estimation, and damage calculations. Simply put, a stated-choice question presents an individual with a number of alternatives, each described in terms of the levels of their common set of characteristics, and asks the individual to state his preferred alternative. Stated-choice techniques are used in marketing, transportation, and economic research to value products, environmental resources, and changes in transportation modes as a function of their characteristics. Under Federal law responsible parties are liable for the damages to natural resources caused by the release of hazardous substances in accordance with the regulations at 43 CFR §11.81–11.84. Some of the major NRDAs in the last decade include US versus Exxon (Carson et al., 1992), Montana versus ARCO (Morey et al., 2002b), and the southern California bight (Carson et al., 1994). A component of the ﬁrst two of these assessments was estimating the damages to recreational users from the injuries. Such damages are deemed recreational use values (damages) and are measured in terms of willingness to pay (WTP) by users for the absence of injuries plus WTP by non-users that would be...
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