Edited by Jeroen C.J.M. van den Bergh
Chapter 54: Contingent Valuation
Bengt Kristrom* 1. Introduction This chapter provides a brief outline of the contingent valuation method (CVM). We begin, in Section 2, by describing some key developments of the method, including some brief historical notes. The third section provides a discussion of key issues in the development of an actual experiment, where we divide an experiment into four different phases. Section 4 comments on some of the issues that are at the forefront of the current discussion. Section 5 offers some concluding remarks on fruitful future research directions. 2. From esoteric toy to multibillion dollar assessment tool The contingent valuation method is a practical survey technique, designed to shed empirical light on matters of resource allocation. Survey techniques are the main tool for generating data within the social sciences. Household expenditure surveys, employment surveys, health surveys, opinion polls and surveys used to compile the national accounts are examples of datagenerating processes in the social sciences. Indeed, surveys are the lifeblood of empirical studies for economists, psychologists, sociologists and for vast number of other researchers. At first blush the CVM is straightforward; simply ask a set of people how much they would be willing to pay (WTP) for obtaining a particular good. As is now well understood, this is only a caricature of a state-of-the-art application, which needs input not only from economic theory, but also from several other disciplines, including sociology, psychology, statistics and survey research. His tor ical notes It might be useful to recount some of the historical highlights...
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