Environmental Engineering Reference
In-Depth Information
CVM has the advantage of utilizing all the structural characteristics of
demand analysis. Its chief disadvantage is that respondent bias may exist,
pointing out the importance of the art of questionnaire design. Despite
its widespread use CVM is extremely controversial and the values derived
from the technique are treated with some scepticism by many economists
(van Rensburg et al., 2002; Mill et al., 2007). Some go as far as to suggest
that the technique should not be used as the basis for policy decisions
(Hausman, 1993).
The contingent valuation method began to be used widely from the
mid-1970s (Randall et al., 1974; Brookshire et al.,
1976). Other detailed
accounts of the method can be found in Mitchell and Carson (1989),
Hanley and Spash (1993), Bateman and Willis (1995), van Rensburg et
al. (2002), and Mill et al.
(2007). Relatively few contingent valuation
studies relate specii cally to biodiversity (Diamond and Hausman, 1994;
Hanemann, 1994; Portney, 1994).
The value of species and habitats
Many empirical studies applied to wilderness areas indicate that the value
of recreational and other non-marketed direct values derived from areas
of high nature conservation value can be signii cant and may compare
favourably with competing commercial uses of the same resource. For
example, Hanley and Craig (1991) contrasted the trade-of s implicit in
permitting or prohibiting af orestation with respect to the l ow country,
in northern Scotland (the largest body of blanket peat bog in the northern
hemisphere). The development would generate employment and produce
timber but displace extensive populations of internationally rare breeding
birds. They demonstrated that the total recreational value of the resource
exceeded the benei ts derived from af orestation at discount rates of 6, 4
and 3 per cent. Similarly, Willis (1991) established that the total recrea-
tional value of the Forestry Commission estate in the United Kingdom
exceeded the value of timber sales.
Garrod and Willis (1997) carried out one of the few examples of contin-
gent ranking techniques applied specii cally to biodiversity. They employed
a discrete choice contingent ranking approach to estimate the general pub-
lic's WTP to increase the area of Forestry Commission forests managed
under three forest management standards designed to of er increasing
levels of biodiversity at the expense of commercial timber production.
This method enables relative preferences for dif erent forest management
standards to be measured at the same time as WTP to promote biodiver-
sity. They suggest that the benei ts of changing forest management to meet
these standards far outweigh the i nancial costs involved.
Some of the benei ts associated with biodiversity can be deciphered from
