Do contingent valuation estimates of willingness to pay for non-use environmental goods pass the scope test with adequacy? A review of the evidence from empirical studies in the literature

Abstract

Contingent valuation (CV) is commonly used in environmental economics to estimate non-use values of environmental goods and services.3 Use values are amenable to direct analysis based on revealed preference data, either from direct approaches such as reviewing evidence of actual purchases, or indirect approaches such as travel cost and hedonic price analysis. CV is likely to be much less accurate for non-use amenities than for use amenities, as respondents asked about non-use amenities have no market experience to guide their thinking, and are unlikely to have ever given thought to assigning monetary values for this type of good. From its earliest days, the CV method has been scrutinized with respect to whether its results are consistent with the assumptions of rational choice. In this chapter we focus on one of the key tests of rational choice: do estimates of willingness to pay (WTP) derived from CV studies increase as the amount of the good (or the number of goods) increases (i.e., as scope increases), and, if so, are the WTP estimates “adequately” responsive to scope?