Contingent Valuation Method

Abstract

In simple terms, contingent valuation is a method of estimating the value that people place on a particular good. It uses survey techniques to elicit people’s willing ness to pay (WTP) to obtain a particular good or willingness to accept (WTA) to give away the good. It can be applied for goods both which are and are not traded in regular marketplaces. For goods, which are not traded in the marketplace, like restoring the Isahaya Bay wetland, a hypothetical marketplace is created in which respondents are given the opportunity to buy the good. Since the elicited WTP values are contingent upon the particular hypothetical market described to the respondents, this approach came to be called the contingent valuation method (Brookshire and Eubanks 1978). At different times and in various places, the contingent valuation method is also called thc survey method, the interview method, the direct interview method, the direct questioning method, the hypothetical demand curve estimation method, the difference mapping method, and the preference elicitation method (Mitchell and Carson 1989).