Contingent valuation method

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Contingent valuation (Engl. Contingent Valuation Method - CVM) is a method voiced preferences for economic valuation of non-traded goods , including many environmental goods and performances (Engl. Ecosystem Services ). Methods of expressed preferences are direct evaluation methods that work with surveys. In the simplest case, the respondents are introduced to the change in an (environmental) asset and asked "What is the maximum amount you would be willing to pay for the change to occur?"

History and application

The method has its origins in the assessment of soils, initiated in the 1940s by Siegfried Ciriacy-Wantrup . It was later applied in the environment as well as in health and tourism. The related method of choice experiments was also used in marketing and transportation.

The contingent valuation arose from the need to put useful but non-marketable resources in relation to tradable goods in order to measure their benefits quantitatively (e.g. in monetary units). The technology used in conjoint analysis and choice experiments enables statements to be made about how the respondents evaluate habitats for threatened animal species or measures to improve air quality , for example .

On the one hand, the results of the analyzes serve as a basis for politicians to determine the amount of levies or expenditure for protective measures. On the other hand, it can also be used to estimate the damage caused by the economic use of the environment or other non-market goods. The method is also relevant in welfare economics in order to be able to compare the non-market values ​​of alternative courses of action in the context of a cost-benefit analysis . The contingent valuation method covers all economic values ​​of environmental and similar goods, including their so-called existential value .

Problems

Various factors make it difficult to determine the preferences of the respondents in a sufficiently distortion-free manner, including:

  • Before the survey, the respondents had little knowledge of the good to be assessed. In order to get around this problem, CVM has been increasingly combined with deliberative methods since 2000, in which preference formation should take place in workshops and focus groups before the participants are confronted with questionnaires.
  • It is difficult for the respondents to estimate how a quantitative change in the provision of the good will affect their specific living environment.
  • The good or its effects are fraught with risks or uncertainty .
  • The respondents do not consider the (environmental) improvement hypothetically assumed in the questionnaire to be credible.
  • If the survey is carried out as a face-to-face interview, as with all interview-based surveys, the respondents may try to match the (presumed) intentions of the interviewer ( result distortion by the interviewer ).
  • The respondents do not express their “true” preferences, but respond strategically in order to steer the evaluation result in a certain direction. Paul Samuelson expressed this criticism in his article on The Pure Theory of Public Expenditures from 1954, in which he was the first to undertake an economic analysis of public goods .
  • The question format can have an undesirable influence on the result. Replying to a question about the minimum compensation claim ( willingness to accept compensation ) at a environmental quality deterioration are mostly to be higher than the answer to a question on the maximum willingness to pay ( willingness to pay ) for an equal environmental improvement.
  • In addition, the embedding effect makes it difficult for the decision-maker (e.g. legislator ) to derive concrete recommendations for action from the method.

nomenclature

The term contingent assessment and related terms such as methods of expressed preferences, choice experiment , conjoint analysis and many idiosyncratic combinations of them (e.g. stated choice methods ) are defined and used differently by researchers. In a specialist article in 2011, two recognized researchers, Richard Carson and Jordan Louviere, proposed a nomenclature to prevent discrepancies and inconsistencies in the use of the term in the relevant literature. In doing so, they created a hierarchy of terms in which the top level should be the class of methods of expressed preferences, including contingent valuation as a generic term for all methods that are based on hypothetical markets (which is a more comprehensive interpretation than usual in the literature) in Differentiation from other methods that are also based on querying preferences. Contingent assessment is then subdivided into matching methods and discrete choice experiments , the latter term being defined more broadly by the authors than usual and a. Includes dichotomous choice contingent valuation , a method that is normally understood as a sub-variant of the contingent valuation method in the narrower sense (i.e. to distinguish it from choice experiments). In addition, the authors recommend avoiding the term conjoint entirely because, in their opinion, it is too vague.

See also

literature

  • Richard T. Carson: Contingent Valuation: A Comprehensive History and Bibliography . Edward Elgar, Cheltenham, Northampton 2011, ISBN 978-1-84064-755-6 .
  • Richard T. Carson: Contingent Valuation: A Practical Alternative when Prices Aren't Available . In: The Journal of Economic Perspectives . 26, No. 4, Fall 2012, pp. 27-42 (16). doi : 10.1257 / jep.26.4.27 .
  • Jerry Hausman : Contingent Valuation: From Dubious to Hopeless . In: The Journal of Economic Perspectives . 26, No. 4, Fall 2012, pp. 43-56 (14).
  • GJ Pruckner: The contingent assessment approach for measuring environmental goods. State of the debate and possible uses for environmental policy . In: Journal for Environmental Policy & Environmental Law . No. 4 , 1995, p. 503-536 ( online PDF).

Web links

Individual evidence

  1. ^ Matthew A. Wilson and Richard B. Howarth: Discourse-based valuation of ecosystem services: establishing fair outcomes through group deliberation . In: Ecological Economics . tape 41 , no. 3 , 2002, p. 431-443 , doi : 10.1016 / S0921-8009 (02) 00092-7 .
  2. ^ Giulia Wegner and Unai Pascual: Cost-benefit analysis in the context of ecosystem services for human well-being: A multidisciplinary critique . In: Global Environmental Change . tape 21 , no. 2 , 2011, p. 492–504 , doi : 10.1016 / j.gloenvcha.2010.12.008 .
  3. ↑ Kevin J. Boyle & Richard C. Bishop: Welfare Measurements Using Contingent Valuation: A Comparison of Techniques . In: American Journal of Agricultural Economics . tape 70 , no. 1 , 1988, p. 20-28 , doi : 10.2307 / 1241972 .
  4. ↑ Peter Diamond and Jerry Hausman: Contingent Valuation: Is Some Number Better than No Number? In: The Journal of Economic Perspectives . tape 8 , no. 4 , 1994, pp. 45-64 .
  5. ^ Daniel McFadden : Contingent Valuation and Social Choice . In: American Journal of Agricultural Economics . tape 76 , no. 4 , 1994, pp. 689-708 , doi : 10.2307 / 1243732 .
  6. ↑ Richard T. Carson and Jordan J. Louviere: A Common Nomenclature for Stated Preference Elicitation Approaches . In: Environmental and Resource Economics . tape 49 , no. 4 , 2011, p. 539-559 , doi : 10.1007 / s10640-010-9450-x .