Ask a Silly Question: Contingent Valuation of Natural Resource Damages
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Editor’s Comment.
Abstract
The rise of environmental consciousness over the past several decades has led to legislation that makes despoilers of natural resources liable for both market and non-market losses incurred by the public. This creates the need for measurement of those losses. Contingent valuation (CV) a technique that uses surveys to value non-market goods has gained prominence as a tool for assessing damages to publicly owned natural resources. This article suggests that CV estimates are biased and unreliable in general and argues that CV measurements of nonuse values are so speculative that the costs of using them in legal proceedings almost always outweigh the benefits.
