An adding-up test on contingent valuations of river and lake quality

Abstract

Contingent valuation (CV) is a survey procedure designed to estimate respondents’ willingness to pay (WTP) for natural resource services. See Carson and Hanemann (2005) for a review. One of the most prominent concerns about CV is whether the estimated WTP from CV studies varies adequately with the amount, extent, or, more generally, “scope” of the environmental good.3 This concern was emphasized by a panel of experts that the National Oceanic and Atmospheric Administration (NOAA) convened with the purpose of making recommendations about the reliability of CV. The panel concluded that they would judge the findings of a CV study to be unreliable if it evidenced “[i]nadequate responsiveness to the scope of the environmental insult,” and said that the burden of proof “must rest” with the researchers who designed and implemented the study (Arrow et al., 1993).