Contingent Valuation: Is Some Number Better than No Number?

Contingent Valuation: Is Some Number Better than No Number? Abstract Without market outcomes for comparison, internal consistency tests, particularly adding-up tests, are needed for credibility. When tested, contingent valuation has failed. Proponents find surveys tested poorly done. To the authors’ knowledge, no survey has passed these tests. The ‘embedding effect’ is the similarity of willingness-to-pay responses that theory suggests (and sometimes requires) be different. This problem has long been recognized but not solved. The authors conclude that current methods are not suitable for damage assessment or benefit-cost analysis. They believe the problems come from an absence of preferences, not a flaw in survey methodology, making improvement unlikely. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Perspectives American Economic Association

Contingent Valuation: Is Some Number Better than No Number?

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Publisher
American Economic Association
Copyright
Copyright © 1994 by the American Economic Association
Subject
Symposia
ISSN
0895-3309
D.O.I.
10.1257/jep.8.4.45
Publisher site
See Article on Publisher Site

Abstract

Abstract Without market outcomes for comparison, internal consistency tests, particularly adding-up tests, are needed for credibility. When tested, contingent valuation has failed. Proponents find surveys tested poorly done. To the authors’ knowledge, no survey has passed these tests. The ‘embedding effect’ is the similarity of willingness-to-pay responses that theory suggests (and sometimes requires) be different. This problem has long been recognized but not solved. The authors conclude that current methods are not suitable for damage assessment or benefit-cost analysis. They believe the problems come from an absence of preferences, not a flaw in survey methodology, making improvement unlikely.

Journal

Journal of Economic PerspectivesAmerican Economic Association

Published: Nov 1, 1994

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