Exploring Values,Context and Perceptions in Contingent Valuation Studies: The CV Market Stall Technique and Willingness to Pay for Wildlife Conservation

Public preferences for conservation and environmental management may be identified in willingness to pay (WTP) studies. Normally part of a contingent valuation exercise, WTP studies elicit monetary estimates of non-market economic goods. This paper describes a new approach to WTP, the CV Market Stall, a technique that adds a discursive, qualitative dimension to contingent valuation. It is suggested that the CV Market Stall technique is a good method for exploring attitudes and responses to environmental project proposals. The flexible format, with an emphasis upon information provision, discussion and learning would also allow contingent valuation to be extended to much more complex and uncertain environmental issues.     

Household Willingness to Pay and Farmers' Willingness to Accept Compensation for Establishing a Recreational Woodland

The UK Forestry Commission's recently implemented Community Woodland scheme sets out to provide new recreational woodland facilities near to towns and cities where such resources are in short supply. This study examines household willingness to pay (WTP) for such a proposed woodland by means of the contingent valuation (CV) method. A stratified sample of 325 households in Wantage, Oxfordshire, was interviewed and asked to state both their annual and per-visit WTP. Analysis of a number of recognized potential biases suggested that the results obtained must be treated with caution although we argue that the CV provides a useful ballpark indication of preferences. A simultaneous CV survey of farmers' willingness to accept compensation for converting agricultural land into woodland proved to be far more robust, despite a small sample size. We conclude that farmers are more familiar with the concept of assessing potential compensation than are households with estimating hypothetical payments for increased provision of public goods.     

Information and Willingness to Pay in a Contingent Valuation Study: The Value of S. Erasmo in the Lagoon of Venice

This paper reports on a contingent valuation (CV) study eliciting willingness to pay (WTP) for a public program for the preservation of lagoon, beach and infrastructure in the island of S. Erasmo in the Lagoon of Venice, Italy. We use split samples to investigate the effect of providing a summary of reasons for voting in favor and against the program before the referendum valuation question. Reminding respondents of the reasons for voting for or against the program increases WTP among less highly educated respondents, and decreases WTP among more highly educated respondents.     

Scope effects of respondent uncertainty in contingent valuation: evidence from motorized emission reductions in the city of Nairobi,Kenya

This study analyzed the scope effects of respondent uncertainty in contingent valuation (CV) by evaluating whether willingness to pay (WTP) estimates were sensitive to changes in the magnitudes of motorized emission reductions in the city of Nairobi, Kenya. The WTP estimates were elicited through the conventional payment card (PC), stochastic payment card (SPC) and the polychotomous payment card (PPC) formats. While SPC and PPC formats were used to capture respondent uncertainty, the PC format captured respondent certainty regarding the amounts individuals were WTP for emission reductions. Based on parametric and nonparametric analysis, results show that certain (PC) respondents stated significantly larger WTP amounts for larger emission reductions than for smaller reductions. Conversely, uncertain (SPC and PPC) respondents stated smaller amounts for larger emission reductions than certain (PC) respondents. The implication is that though respondents were sensitive to the scope of motorized emission reductions, respondent uncertainty lowered their sensitivity to scope.     

Hypothetical and Real Economic Commitments,and Social Status,in Valuing a Species Protection Programme

There has been a long-running debate on the reliability and validity of the contingent valuation method, connected with the hypotheticality of the situation when respondents are asked to state their willingness to pay (WTP) for species protection (the so-called 'hypothetical bias'). Additionally, a number of recent arguments regarding donations to good causes and the benefits of achieving social status have questioned the motives of respondents who have stated their WTP. An experiment at the University of Klagenfurt tested for hypothetical bias by asking participants to state their hypothetical and real WTP for a species protection programme in the Hohe Tauern national park. Hypothetical and real WTP differed significantly. Additionally, it emerged that the pure ecological motive for stating a WTP might be concealed by arguments about donating in order to achieve social status and contributing to a good cause.     

On the value of large predators in Sweden: a regional stratified contingent valuation analysis

This paper contributes with an applied policy analysis of the predator preservation policy in Sweden. We estimate the overall mean willingness to pay (WTP) for preserving the four large predators in the Swedish fauna by applying the contingent valuation method. Using survey data from 2004 we find that 50 percent of the Swedish population is willing to contribute financially toward implementation of the predator policy package, and that the estimated overall mean WTP is approximately SEK 290. Further, we test for spatial differences in attitudes and WTP and find that respondents in Stockholm have the highest overall mean WTP, while respondents living in wolf-territories have the lowest. Our mean WTP measure is flawed with upward bias, since we cannot estimate the willingness to accept for those with clearly negative preferences regarding the predator policy package (e.g. hunters). In this paper, we set their WTP equal to zero. Thus, we cannot rule out the possibility that the mean willingness to pay is, in fact, negative, i.e. the social-value of implementing the predator policy is negative. Finally, the estimates of the overall WTP are sensitive to response-uncertainty. When the respondents indicate uncertainty about their valuation, they tend to state higher values.     

Scope insensitivity in contingent valuation of complex environmental amenities

It has been argued that respondents in contingent valuation (CV) surveys, asked to value complex environmental amenities, will state willingness to pay (WTP) independently of the scope of the project. Such insensitivity to scope would be at odds with rational choice, and could therefore imply that CV is not a theoretically valid method for biodiversity valuation. The scope test in the present CV study was applied to endangered species preservation. Respondents were split in four sub-samples facing different scopes of endangered species preservation. The design allowed for both external and internal scope tests. Furthermore, the tests were split according to elicitation format. Of four external tests of insensitivity to scope, one was rejected, two gave mixed results, depending on either the type of test or elicitation format, and for the last one the null hypothesis could not be rejected. Of five internal tests, insensitivity to scope was rejected in three cases, one test gave mixed results, and one could not be rejected. Survey design features of the CV study, especially an unfamiliar sub-group of endangered species, could explain the apparent insensitivity to scope observed.     

Can you be bothered? The role of participant motivation in the valuation of species conservation measures

Group-based approaches to the elicitation of stated preferences are considered particularly suitable for valuing unfamiliar or complex environmental goods. While such exercises provide participants with detailed information and time to think and deliberate, they require a considerable degree of motivation from the respondents. Effects of motivation on willingness to pay (WTP) tend to be ignored within the valuation research community, although similar effects have been reported in psychological literature. In this study, a novel approach using video recordings and behaviour coding of participants in group-based Market Stall meetings was employed to measure motivation as well as its impact on WTP and the theoretical and convergent validity of stated WTP. Indicators of motivation correlated significantly with both WTP statements and their validity, with more motivated individuals stating higher and more valid bids. These findings suggest that the recognition of motivation is an important novel element of research into stated preferences, particularly with respect to usefulness and quality of WTP measures.     

Using local knowledge to model asymmetric preference formation in willingness to pay for environmental services

This paper describes an approach to account for asymmetric preference formation in discrete choice models used for environmental valuation. The paper draws on data from a case study on preferences for environmental change resulting from a hypothetical rural development and conservation programme in Indonesia. Local knowledge on the current state of the environment was used to define an individual-specific status quo that consistently frames changes in a range of environmental services as gains or losses matching the perceptions of the local population living in the vicinity of a National Park. I estimated choice models that included separate parameters for increases and decreases in attribute levels for the environmental services and derived the indicators of local willingness to pay (WTP) corresponding to the bidirectional changes relative to the individual-specific status quo option. I found clear evidence of an asymmetric response to increase and decrease in attribute levels relative to the status quo. Ignoring asymmetric preference formation can therefore result in biased estimates of WTP indicators and welfare measures of change in cases where the outcomes of environmental programmes can plausibly result in both an increase and a decrease relative to a reference option. Compared to a symmetrical modelling approach, the combination of simultaneously accounting for asymmetric preference formation and preference heterogeneity in the choice model yielded additional insights that may be used to inform the development of local strategies towards biodiversity conservation.     

Valuing improvements to threatened and endangered marine species: an application of stated preference choice experiments

Non-market valuation research has produced value estimates for over forty threatened and endangered (T&E) species, including mammals, fish, birds, and crustaceans. Increasingly, Stated Preference Choice Experiments (SPCE) are utilized for valuation, as the format offers flexibility for policy analysis and may reduce certain types of response biases relative to the more traditional Contingent Valuation method. Additionally, SPCE formats can allow respondents to make trade-offs among multiple species, providing information on the distinctiveness of preferences for different T&E species. In this paper we present results of an SPCE involving three U.S. Endangered Species Act (ESA)-listed species: the Puget Sound Chinook salmon, the Hawaiian monk seal, and the smalltooth sawfish. We estimate willingness-to-pay (WTP) values for improving each species' ESA listing status and statistically compare these values between the three species using a method of convolutions approach. Our results suggest that respondents have distinct preferences for the three species, and that WTP estimates differ depending on the species and the level of improvement to their ESA status. Our results should be of interest to researchers and policy-makers, as we provide value estimates for three species that have limited, if any, estimates available in the economics literature, as well as new information about the way respondents make trade-offs among three taxonomically different species.     

What Level of Information Enables the Public to Act Like Experts When Evaluating Ecological Goods?

Although contingent valuation is widely discussed in the literature as a technique for environmental valuation, it is well recognized that a number of problems are associated with its use. This paper seeks to address two of these problems: the difficulty of externally verifying the results of a CV study; and the choice of an appropriate level of information to provide to respondents. Four sites were evaluated, first by expert ecologists and then by the general public using the CV method. In conducting the CV, six different categories of information were presented to different groups of respondents to test which was most appropriate.The results show that, given an information set consisting of photographic,textual and ecological data, respondents to a CV study were able to rank the four sites in the same order as ecological experts. This may be seen as a form of external verification to the results of the contingent valuation.     

Air quality assessment by contingent valuation in Ji'nan, China

Along with urbanization and environmental deterioration within China, many residents' desire for improved air quality has increased. To address this topic, this study focuses on the relationship between poor air quality and residents' willingness to pay for improved air quality in the city of Ji'nan. As a means of quantifying an individual's willingness to pay (WTP) for improved air quality, a contingent valuation method (CVM) was employed. A sample of 1500 residents was chosen, based on the stratified sampling method. The respondents' WTP was then elicited through a series of face-to-face interviews, conducted using a range of hypothetical, open-ended scenario questions. The results showed that 59.7% of respondents were able to express a positive WTP, and that the average WTP was 100 Chinese Yuan (CNY) per person, per year. In order to establish the relationship between endogenous variables and WTP, both a Probit model on the probability of a positive WTP, and a stepwise regression model were constructed. Most parameters in the econometric analysis demonstrated the expected results. It was found that annual household income, expenditure on the treatment of respiratory diseases and workers in the family significantly influenced WTP. The rates of positive WTP and the monetary amount were also larger for men than for women. Unlike developed countries, most respondents regard air quality improvement as a government responsibility in that more than 40% of respondents had no incentive to bear the costs of attempting to achieve better air quality, indicating a relatively low environmental consciousness.     

Convergent validity between willingness to pay elicitation methods: an application to Grand Canyon whitewater boaters

We directly compare trip willingness to pay (WTP) values between dichotomous choice contingent valuation (DCCV) and discrete choice experiment (DCE) stated preference surveys of private party Grand Canyon whitewater boaters. The consistency of DCCV and DCE estimates is debated in the literature, and this study contributes to the body of work comparing the methods. Comparisons were made of mean WTP estimates for four hypothetical Colorado River flow-level scenarios. Boaters were found to most highly value mid-range flows, with very low and very high flows eliciting lower WTP estimates across both DCE and DCCV surveys. Mean WTP precision was estimated through simulation. No statistically significant differences were detected between the two methods at three of the four hypothetical flow levels.     

ECONOMIC VALUATION OF RIPARIAN BUFFER AND OPEN SPACE IN A SUBURBAN WATERSHED1

Abstract: This study evaluates the economic value of riparian buffers and open space in a suburban watershed through two nonmarket valuation methods. A contingent valuation survey was implemented in the Dardenne Creek watershed, a suburban watershed of the St. Louis metropolitan area in Missouri, to evaluate the residents' perceptions of and willingness to pay (WTP) for adopting riparian buffers and preserving farmland in a hypothetical real estate market. A hedonic pricing model based on actual sale prices of homes in the watershed was applied to estimate the market value of open space and other environmental conditions such as flood zone and stream proximity in the study area. The results showed that residents' WTP was consistent with the economic values of open space and proximity to streams embedded in existing home prices. Through a better understanding of residents' perceptions and values, riparian buffer and open space programs can be designed and promoted to achieve greater implementation success and environmental benefit.     

The valuation of historical sites: a case study of Valdivia,Chile

The economic valuation of cultural heritage is an area of increasing interest and an important research topic in the emerging field of cultural economics. Many services and values associated with cultural heritage are not traded in markets, and their estimation requires methods developed for the valuation of non-market goods, such as those used in environmental economics. This paper applies the contingent valuation method with double dichotomous choice to estimate the value of historical sites in the city of Valdivia, Chile. The valuation exercise was implemented by designing a hypothetical guided walking tour to a cluster of historical sites in the city centre, and surveying tourists visiting the city during the summer of 2004. Parametric and non-parametric statistical methods were used to estimate the survival distribution and the mean and median estimates of the willingness-to-pay (WTP). The study emphasizes the importance of explicitly treating heterogeneous preferences and the sensitivity of the survival distribution to the estimation methods used.     

Assessing Public Preferences for Forest Biomass Based Energy in the Southern United States

This article investigated public preferences for forest biomass based liquid biofuels, particularly ethanol blends of 10% (E10) and 85% (E85). We conducted a choice experiment study in three southern states in the United States: Arkansas, Florida, and Virginia. Reducing atmospheric CO₂, decreasing risk of wildfires and pest outbreaks, and enhancing biodiversity were presented to respondents as attributes of using biofuels. Results indicated that individuals had a positive extra willingness to pay (WTP) for both ethanol blends. The extra WTP was greater for higher blends that offered larger environment benefits. The WTPs for E10 were $0.56 gallon^?1, $0.58 gallon^?1, and $0.48 gallon^?1, and for E85 they were $0.82 gallon^?1, $1.17 gallon^?1, and $1.06 gallon^?1 in Arkansas, Florida, and Virginia, respectively. Although differences in WTP for E10 were statistically insignificant among the three states, significant differences were found in the WTP for E85 between AR and FL and between AR and VA. Preferences for the environmental attributes appeared to be heterogeneous, as respondents’ were willing to pay a premium for E10 in all three states to facilitate the reduction of CO₂ and the improvement of biodiversity but were not willing to pay more for E85 in order to enhance biodiversity.     

Stated willingness to pay as hypothetical behaviour: Can attitudes tell us more?

The fact that people only state a hypothetical willingness to pay (WTP) in contingent valuation surveys still causes much debate. Doubters are sceptical about the reliability and validity of contingent valuation estimates, that is, whether people will actually pay the amount stated in the survey. Parallel to this discussion, social psychologists have conducted a great deal of research on the determinants of actual behaviour, particularly attitudes. Therefore, the objective of this paper is to analyse the relationship between different kinds of attitudes and behaviour. Based on this analysis, a composite attitude-behaviour model is developed and estimated using data from a contingent valuation about the river Elbe in Germany. The results show that attitudes towards the behaviour are the immediate antecedent of the behavioural intention. Accordingly, it is suggested that these attitudes along with attitudes towards the good in question and general attitudes should be measured in order to increase predictive validity.     

Ranking the benefits of biodiversity: an exploration of relative values

Public concern about the alarmingly high rate of biodiversity loss has not been matched by public willingness to bear boundless costs to stem the tide of extinction. Because resources for conservation are limited, setting conservation priorities to use those resources effectively is crucial. To do so in a way that addresses people's most pressing concerns about biodiversity loss, managers and policy makers must understand those concerns. This study investigates preferences for an array of benefits associated with biodiversity and wildlife and the relative importance to people of each. A survey was administered to a sample of the US population to explore public preferences for types of benefits often associated with biodiversity: utilitarian (commodity and recreation), ecological (certain and uncertain), aesthetic, symbolic, and humanistic. Respondents were asked to rank hypothetical species presented in choice sets of three species, each described simply in terms of one type of benefit. A rank-ordered multinomial logit model was estimated to establish a ranking of the benefits and evaluate the sensitivity of the ranking to socio-demographic variables. The means of the sample predictions indicated the relative importance of each type of benefit. Confidence intervals were constructed to evaluate the extent to which the ranks could be distinguished from one another. Ecological functions were most important to survey respondents; commodity-based benefits and human attributes were of moderate importance; and recreation, aesthetics, and symbolic references in literature and art appeared to be least important.     

Comparing contingent valuation and contingent ranking: a case study considering the benefits of urban river water quality improvements

This paper contrasts applications of both the contingent valuation (CV) and contingent ranking (CR) methods as applied to a common issue, the valuation of improvements to the water quality of an urban river (the River Tame, running through the city of Birmingham, UK). Building upon earlier experimental work, the CV design used ensures that respondents are fully aware of all impending valuation tasks prior to undertaking any one of those tasks. Such an approach is directly comparable to the CR design for which full awareness of all options is a pre-requisite. Findings indicate that the CV responses exhibit strong internal consistency with expected relationships observed between values and theoretically expected parameters. External comparisons show that CR valuations are substantially larger than those elicited through CV (with protest votes excluded), and that the response rate for the CR survey is significantly higher than that for the CV survey.     

Resident Motivations and Willingness-to-Pay for Urban Biodiversity Conservation in Guangzhou (China)

The monetary assessment of biodiversity measures the welfare damages brought by biodiversity losses and the cost-benefit analysis of conservation projects in a socio-economic context. The contingent valuation method could include motivational factors to strengthen economic analysis of nature conservation. This study analyzed Guangzhou residents’ motivations and willingness-to-pay (WTP) for an urban biodiversity conservation program in the National Baiyun Mountain Scenic Area (BMSA). The peri-urban natural site, offering refuge to some endemic species, is under increasing development pressures for recreational and residential use. A questionnaire survey was conducted in the Guangzhou metropolitan area during June to October 2007. We interviewed face-to-face 720 stratified sampled households to probe residents’ attitudes towards the city’s environmental issues, motivations for urban nature conservation, and WTP for biodiversity conservation. Principal component analysis identified five motivational factors, including environmental benefit, ecological diversity, nature-culture interaction, landscape-recreation function, and intergenerational sustainability, which illustrated the general economic values of urban nature. Logistic regression was applied to predict the probability of people being willing to pay for the urban biodiversity conservation in BMSA. The significant predictors of WTP included household income and the factor nature-culture interaction. The median WTP estimated RMB149/household (about US$19.5/household) per year and an aggregate of RMB291 million (approximately US$19.5/household) per year and an aggregate of RMB291 million (approximately US38.2 million) annually to support the urban conservation project. Including public motivations into contingent valuation presents a promising approach to conduct cost-benefit analysis of public projects in China.