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Abstract:
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"A desire for expedient decision-making, often under the auspices of Cost-Benefit Analysis, has popularised applications of Contingent Valuation for estimating the monetary value of numerous non-market goods and bads. While enjoying an extended period of application, notably over the last decade, Contingent Valuation would appear to have come under the scrutiny of a particularly critical audience. In this paper, I want to explore several dimensions of neoclassical choice theory, which might assist in offering some explanation for difficulties that arise in Contingent Valuation, particularly on matters of the environment. In the case of environmental goods, it is likely that respondents to a contingent valuation exercise will: (i) have a preconceived view of what should be the structure of property rights, which may or may not coincide with that structure of property rights implied by questions of willingness to pay and willingness to accept compensation; (ii) act according to a self-imposed ethical or moral code which will not conform to the usual conceptualisations of choice behaviour in neoclassical choice theory. To provide for a realistic contingent valuation of environmental goods, we require some ex ante knowledge of the institutional structure of property rights and a more thorough understanding of the conceptual dimensions of respondent choice behaviour."
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