Improving the External Validity of Contingent Valuation Methodology

EPA Grant Number: GF9502252
Title: Improving the External Validity of Contingent Valuation Methodology
Investigators: Welch, Edward
Institution: Carnegie Mellon University
EPA Project Officer: Hahn, Intaek
Project Period: May 31, 1995 through January 1, 2000
Project Amount: $34,000
RFA: STAR Graduate Fellowships (1995) RFA Text |  Recipients Lists
Research Category: Fellowship - Social Sciences , Environmental Justice , Academic Fellowships


This proposed research focuses on the specific issue of how people deal with competitive demands on their ability to pay for environmental goods. It is part of a larger project which is also exploring the possibility of more radical variants of a survey research methodology called contingent valuation (CV). The closest precedent for this program may be research aimed at improving the external validity of CV by reducing informational deficiencies of the valuation task. Unlike transactions in real markets, CV transactions take place in an abstract experimental context which may deprive subjects of information that would be used to evaluate goods in a real market. This research will investigate a normatively important dimension of the CV paradigm which seems to have gone unnoticed in the literature. While a few authors have discussed the role of other goods in the valuation task, virtually all discussions of CV treat it as a methodology for evaluating solitary goods, not as a mechanism for setting an overall social policy about environmental priorities. For this reason the institution of CV as currently practiced may deprive subjects of information that is normatively critical to their determination of W.P. (the greatest amount individuals will pay to obtain something): the total set of demands on their financial resources. This research program will include elements of policy research in addition to experimental psychology. For example, if people's W.P. for a CV good is resolutely insensitive to knowledge about the number of other goofs being evaluated using CV, it is important to assess the implications of this funding for policy makers whose decision-making incorporates CV results. This project will do this by analyzing several representative uses of CV with respect to the meaning of different interpretations of CV responses.

Supplemental Keywords:

RFA, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, Economics, decision-making, Sociology, Economics & Decision Making, Environmental History, Social Science, contingent valuation, valuation, external validity of contingent valuation, environmental decision making, valuing environmental quality, decision making, environmental priorities, environmental values, environmental policy, willingness to pay, valuing environmental goods

Progress and Final Reports:

  • 1995
  • 1996
  • 1997
  • 1998
  • Final