Contingent valuation method, Public Economics

Contingent  Valuation Method

In this method we construct a hypothetical market for a particular environmental function. This is an interview-based method where respondents are asked their willingness-to-pay (in monetary terms) for continuation of the environmental function. Alternatively some studies measure the willingness- to-accept for foregoing the environmental function. Here the consumers are compensated for the change in the environmental service. There are certain conceptual problems associated with this method. First, the willingness to pay should not be taken as the willingness to accept; usually the latter is higher than the former.

Moreover, both these terms do not imply the same property rights. Secondly, the persons interviewed are hypothetical consumers. They may not be aware of the benefits of the environmental function. If they were actually asked to make payment, their behaviour would be different. Thus it is sensitive to numerous biases in survey design and implementation. In recent years this method has become quite popular. In Indian situations this method has been applied by Hadker et al. (1997) for measurement of recreational and educational value of Borivli National Park in Mumbai, by James and by Murty (1998) for the cost of water pollution of the river Ganga, and by Murty and Menkhaus (1994) for valuation of ecotourism in Koladeo national park.

Posted Date: 12/18/2012 5:37:22 AM | Location : United States







Related Discussions:- Contingent valuation method, Assignment Help, Ask Question on Contingent valuation method, Get Answer, Expert's Help, Contingent valuation method Discussions

Write discussion on Contingent valuation method
Your posts are moderated
Related Questions
Ask quedoes privatisation decentralise economic power stion #Minimum 100 words accepted#

What are your thoughts on Putman’s “Bowling Alone,” the idea that there has been a decline in social capital in North America? Do you agree or disagree with the assertion? Support

how do a traditional economy, a market, a centrally planned economy, and a mixed economy differ?

Describe the basic process by which an economy moves by a business cycle.  What is meant by a demand-pull inflation?  How does a demand-pull inflation vary from a cost-push inflati


Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4


Question: (a) There appears to be an emerging consensus that the movement towards good governance must include initiatives to strengthen the institutions of government and civi

Question: You are the Head of the Public Relations Department of an airline company. Your Chief Executive has asked you to make a presentation on crisis management to senior s

general equilibrium analysis of taxation in shven and whalley (1984) article