Environmental Engineering Reference
In-Depth Information
in the valuation of biological resources, including rare and endangered species,
habitats and landscapes, although it should be recognised that this method will fail
for those value categories that the general public has no experience with (Nunes and
van den Bergh 2001) . It invokes a framework of a contingent (or hypothetical)
market, used to indicate what individuals are willing to pay for a beneficial change or
what they are willing to accept by way of compensation to tolerate an undesirable
change (Garrod and Willis 1999a ; Carson 2000 ; Boardman et al. 2006) .
The main advantage of CVM is that, in theory and to varying degrees, it is capable
of capturing most of the value categories related to agro-biodiversity. The hypothetical
nature of CVM offers flexibility in application, and as a result, the method is quite
versatile. Nevertheless, results from CVM studies are heavily dependent on the
choice of the particular format used to elicit information about the respondent's
preferences. The success CVM has experienced relates directly to the energy, time
and money spend on the design state of the contingent valuation survey as well as to
the question wording, the question sequencing and the individual interviewers
(Diamond and Hausman 1993) . Respondents are assumed to be rational and
knowledgeable and the best judge of their own interests. Moreover, CVM has many
acknowledged problems. The hypothetical character induces the occurrences of an
impressive list of potential biases that result from using CVM. They include strategic
bias, embedding bias, part-whole bias, starting point bias, and payment vehicle bias
(see, for example, OECD 2002 ; de Blaeij 2003 ; Boardman et al. 2006) .
So although CVM has become one of the most widely used non-market valuation
technique, debate persists over the reliability of CVM. That is, opinion among
scientists is divided. In fact, the debate between advocates and critics of CVM is,
partly, a battle of giants, dominated by heavyweight and highly skilled intellectuals
on both sides, whose powerful weapons are their words. Many economists have
expressed 'discomfort' with using the estimates from contingent valuation to measure
consumers' WTP for changes in non-market goods, such as biodiversity, landscape
scenery and environmental quality. More than 10 years ago, Diamond and Hausman
offered the most dogmatic rejection of the method. They (1994 : 62) tell us that
when using a CVM '… one does not estimate what its proponents claim to be
estimating.' In other words, according to these two CVM sceptics, people simply
do not have preferences over what Diamond and Hausman term 'non-use values'
(see also Vatn 2004) . 2 Also other well-known scholars, such as Kahneman et al.
(1990) and Sagoff (2000) express their doubts with respect to the suitability of
CVM for various reasons. Nonetheless, the opinions of these (resolute) detractors
has not slowed research in this area - on the contrary.
Although proponents of CVM acknowledge that CV studies range from very good
to very bad and that the technique suffers from various design problems that require
effort and skill to resolve (Smith 1992 ; Hanemann 1994 ; Carson 2000) , they
2 Non-use values are values that individuals hold for nature's goods and services independent of
actual use. For example, individual may attach a value to blue whales - because they find it important
that these whales will be properly protected - regardless of any personal use, now or in the future.
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