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Edited by Ruth Towse
Chapter 13: Contingent Valuation
Tiziana Cuccia Contingent valuation (CV) is a method of estimating the value that individuals attribute to non-market goods (for example, public goods) or to some non-market values of market goods that the price cannot reveal (for example, externalities). CV basically consists in asking selected samples of population directly, in survey or experimental settings, what are they willing to pay (WTP) for qualitative and quantitative increments in nonmarket goods or values, or what are they willing to accept (WTA) to tolerate qualitative and quantitative decrements. Both WTP and WTA can be used as measures of the individual’s demand of the non-market goods, services, or values.1 The main goal of CV is to estimate the individual preferences for the policy alternatives proposed in the survey. CV studies started in environmental economics, where their use is widespread. Later, in the 1980s, and mainly in the following decades, CV studies have been applied in eliciting the individual preferences for a wide range of cultural goods. Heritage, historical and archaeological sites are still the main objects of analysis (Navrud and Ready, 2002); they are typical examples of goods that in different degrees display the two characteristics of public goods – non-rivalry and non-excludability in consumption – that make them unprofitable for an enterprise to supply in the market. However, CV has also been applied to the evaluation of the benefits of other cultural institutions (theatres, museums, libraries and public broadcasting) and to questions of urban design.2 The increasing use of CV, compared to the other methods of...
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