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23 Nat. Resources J. 619 (1983)
Contingent Valuation of Environmental Assets: Comparison with a Stimulated Market

handle is hein.journals/narj23 and id is 645 raw text is: Richard C. Bishop,* Thomas A. Heberlein,**
and Mary Jo Kealy***
Contingent Valuation of
Environmental Assets: Comparisons
with a Simulated Market
Contingent valuation' (CV) has gained credibility from comparisons
with other value estimates including those based on travel-cost models;2
costs and prices of substitutes;3 and property values.4 Such comparisons
have at least been sufficient to allay fears that CV results are dominated
by meaningless noise. In several laboratory experiments, researchers have
attempted to get people to behave strategically, yet such behavior has
been rare.' Attempts to find evidence of strategic behavior in CV studies
themselves have failed to find evidence of significant distortions.6 Still,
there are several anomalies that have not yet been adequately explained.
First, there have been consistent differences between willingness-to-pay
and willingness-to-accept-compensation in excess of differences that are
*Professor of Agricultural Economics, University of Wisconsin-Madison.
**Professor of Rural Sociology, University of Wisconsin-Madison.
***Assistant Professor of Economics, Colgate University.
The research was supported by the College of Agricultural and Life Sciences, University of
Wisconsin, Madison, by Resources for the Future, Inc. and by the Wildlife Management Institute.
The authors wish to express their appreciation to Alan Randall, William D. Schulze, and Glenn G.
Stevenson for helpful comments on an earlier version.
1. Contingent valuation employs personal and telephone interviews and mail surveys to ask people
about the values they would place on nonmarket commodities if markets did exist or other means
of payment such as taxes were in effect. That is, subjects are asked about their willingness to pay
or compensation demanded, contingent on the creation of a market or other means of payment. All
payments and receipts are purely hypothetical.
2. Knetsch & Davis, Comparison of Methods for Recreational Evaluation, WATER RESEARCH
125 (A. Kneese & S. C. Smith eds. 1966); Desvouges, Smith & McGivney, A Comparison of
Alternative Approaches for Estimating Recreation and Related Benefits of Water Quality Improve-
ments, DRAFT REPORT TO U.S. EPA (July 1982); and C. Sellar, J. Stoll & J. Chavas, Validation
of Measures of Welfare Change: A Comparison of Nonmarket Techniques, Dept. of Agricultural
Economics, Texas A & M Univ. (1982) (mimeo).
3. Thayer, Contingent Valuation Techniques for Assessing Environmental Impact: Further Evi-
dence, 8 J. ENVIR. ECON. & MGMT. 27 (1981) and other studies discussed in Schulze, d'Arge,
& Brookshire, Valuing Environmental Commodities: Some Recent Experiments, 57 LAND ECON.
151 (1981).
4. Brookshire, Thayer, Schulze, & d'Arge, Valuing Public Goods: A Comparison of Survey and
Hedonic Approaches, 72 AM. ECON. REV. 165 (1982).
5. See, e.g., Scherr & Babb, Pricing Public Goods: An Experiment with Two Proposed Pricing
Systems, 23 PUB. CHOICE 35 (1975); Smith, The Principle of Unanimity and Voluntary Consent
in Social Choice, 85 J. POL. ECON. 1125 (1977). Marwell & Ames, Experiments on the Provision
of Public Good. 1. Resources, Interest, Group Size, and the Free Rider Problem, 84 AM. J. SOC.
1335 (1979) and Marwell & Ames, Experiments on the Provision of Public Goods. II. Provision
Points, Stakes, Experience and the Free Rider Problem, 85 AM. J. SOC. 926 (1980).
6. See studies summarized in Schulze, d'Arge & Brookshire, supra note 3.

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