An Assessment of the Contingent Valuation Method

Abstract

This chapter aims at providing an assessment of the contingent valuation (CV) method. The CV method is a survey-based method used to value environmental goods. The principal idea underlying this method is that people have true, but hidden, preferences for all kinds of environmental goods. It is further assumed that people are capable of transforming these preferences into monetary units (d'Arge, 1985). On the basis of these assumptions, the CV method values environmental goods by simply asking respondents one of the following two questions: Both questions are necessary in establishing a hypothetical market for environmental change: a constructed market in which respondents are able to buy (WTP) and sell (WTA) environmental goods.