Content-Length: 309924 | pFad | https://dx.doi.org/10.1007/bf01065813

a=86400 Valuing environmental resources: A constructive approach | Journal of Risk and Uncertainty Skip to main content

Advertisement

Springer Nature Link
Log in

Valuing environmental resources: A constructive approach

  • Published:
Journal of Risk and Uncertainty Aims and scope Submit manuscript

Abstract

The use of contingent valuation (CV) methods for estimating the economic value of environmental improvements and damages has increased significantly. However, doubts exist regarding the validity of the usual willingness to pay CV methods. In this article, we examine the CV approach in light of recent findings from behavioral decision research regarding the constructive nature of human preferences. We argue that a principal source of problems with conventional CV methods is that they impose unrealistic cognitive demands upon respondents. We propose a new CV approach, based on the value-structuring capabilities of multiattribute utility theory and decision analysis, and discuss its advantages and disadvantages.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Ajzen, Icek, and George L. Peterson. (1988). “Contingent Value Measurement: The Price of Everything and the Value of Nothing?” In George L. Peterson, B. L. Driver, and Robin Gregory (eds.),Amenity Resource Valuation: Integrating Economics with Other Disciplines. State College, PA: Venture, 65–76.

    Google Scholar 

  • Arrow, Kenneth, Robert Solow, Paul R. Portney, Edward E. Leamer, Roy Radner, and Howard Schuman. (1993).Report of the NOAA Panel on Contingent Valuation. Washington, DC: National Oceanic and Atmospheric Administration, January 12.

  • Bishop, Richard. (1986). “Resource Valuation under Uncertainty: Theoretical Principles for Empirical Research.”In Advances in Applied Micro-Economics, vol. 4. JAI Press, Inc., 133–152.

  • Bishop, Richard, and Thomas Heberlein. (1979). “Measuring Values of Extramarket Goods: Are Indirect Measures Biased?,”American Journal of Agricultural Economics, 61, 926–930.

    Google Scholar 

  • Bromley, Daniel. (ed.) (1986).Natural Resource Economics: Policy Problems and Contemporary Analysis. Boston, MA: Kluwer/Nijhoff Publishing.

    Google Scholar 

  • Brookshire, David S., and Donald Coursey. (1987). “Measuring the Value of a Public Good: An Empirical Comparison of ElicitationProcedures,” American Economic Review 77, 554–566.

    Google Scholar 

  • Brookshire, David S., Mark Thayer, William D. Schulze, and Ralph d'Arge. (1982). “Valuing Economic Goods: A Comparison of Survey and Hedonic Approaches,”American Economic Review 72, 165–177.

    Google Scholar 

  • Brown, Thomas C. (1984). “The Concept of Value in Resource Allocation,”Land Economics 60, 231–246.

    Google Scholar 

  • Brown, Thomas C., and Paul Slovic. (1988). “Effects of Context on Economic Measures of Value.” In George L. Peterson, B. L. Driver, and Robin Gregory (eds.),Integrating Economic and Psychological Knowledge in Valuations of Public Amenity Resources. State College, PA: Venture, 23–30.

    Google Scholar 

  • Cronbach, Lee J., and Paul M. Meehl. (1955). “Construct Validity in Psychological Tests,”Psychological Bulletin 52, 281–302.

    PubMed  Google Scholar 

  • Cummings, Ronald G., David S. Brookshire, and William D. Schulze. (1986).Valuing Environmental Goods: Assessment of the Contingent Valuation Method. Totowa, NJ: Rowman and Allanheld.

    Google Scholar 

  • Dawes, Robyn M. (1977). “Predictive Models as a Guide to Preference,”IEEE Transactions on Systems, Man and Cybernetics SMC-7, 355–358.

    Google Scholar 

  • Desvousges, William, V. K. Smith, and Anthony Fisher. (1987). “Option Price Estimates for Water Quality Improvements: A Contingent Valuation Study for the Monongahela River,”Journal of Environmental Economics and Management 14, 248–267.

    Google Scholar 

  • Dickie, Mark, Ann Fisher, and Shelby Gerking. (1987). “Market Transactions and Hypothetical Demand Data: A Comparative Study,”Journal of the American Statistical Association 82, 69–75.

    Google Scholar 

  • Edwards, Ward. (1954). “The Theory of Decision Making,”Psychological Bulletin 51, 380–417.

    PubMed  Google Scholar 

  • Edwards, Ward. (1961). “Behavioral Decision Theory,”Annual Review of Psychology 12, 473–498.

    Google Scholar 

  • Edwards, Ward, and Detlof von Winterfeldt. (1987). “Public Values in Risk Debates,”Risk Analysis 7, 141–158.

    Google Scholar 

  • Einhorn, Hillel J., and Robin M. Hogarth. (1981). “Behavioral Decision Theory: Processes of Judgment and Choice,”Annual Review of Psychology 32, 53–88.

    Google Scholar 

  • Fischhoff, Baruch, and Lita Furby. (1988). “Measuring Values: A Conceptual Framework for Interpreting Transactions with Special Reference to Contingent Valuation of Visibility,”Journal of Risk and Uncertainty 1, 147–184.

    Google Scholar 

  • Fischhoff, Baruch, Paul Slovic, and Sarah Lichtenstein. (1978). “Fault Trees: Sensitivity of Estimated Failure Probabilities to Problem Representation,”Journal of Experimental Psychology: Human Perception and Performance 4, 330–344.

    Google Scholar 

  • Fischhoff, Baruch, Marilyn Jacob Quadrel, Mark Kamlet, et al. (1993). “Embedding Effects: Stimulus Representation and Response Mode,”Journal of Risk and Uncertainty, 6 (3), 211–234.

    Google Scholar 

  • Freeman, Myrick A. (1989). “Nonuse Values in Natural Resource Damage Assessments,” Draft manuscript.In Ray Kopp, and V. Kerry Smith (eds.),Valuing Natural Assets: The Economics of Natural Resource Damage Assessments. Washington, DC: Resources for the Future.

    Google Scholar 

  • Gaeth, Gary J., and James Shanteau. (1984). “Reducing the Influence of Irrelevant Information on Experienced Decision Makers,”Organizational Behavior and Human Performance 33, 263–282.

    Google Scholar 

  • Gardiner, Peter C., and Ward Edwards. (1975). “Public Values: Multiattribute-Utility Measurement for Social Decision Making.” In M. F. Kaplan, and S. Schwartz (eds.),Human Judgment and Decision Processes. New York: Academic Press, 1–37.

    Google Scholar 

  • Gregory, Robin, Ralph L. Keeney, and Detlof von Winterfeldt. (1992). “Adapting the Environmental Impact Statement Process to Inform Decision Makers,”Journal of Policy Analysis and Management 11, 58–75.

    Google Scholar 

  • Gregory, Robin, Donald MacGregor, and Sarah Lichtenstein. (1992). “Assessing the Quality of Expressed Preference Measures of Value,”Journal of Economic Behavior and Organization 17, 277–292.

    Google Scholar 

  • Gregory, Robin, and Tim McDaniels. (1987). “Valuing Environmental Losses: What Promise Does the Right Measure Hold?,”Policy Sciences 20, 11–26.

    Google Scholar 

  • Grether, David M., and Charles R. Plott. (1979). “Economic Theory of Choice and the Preference Reversal Phenomenon,”American Economic Review 69, 623–638.

    Google Scholar 

  • Hammond, Kenneth R., Gary H. McClelland, and Jeryl Mumpower. (1980).Human Judgment and Decision Making: Theories, Methods, and Procedures. New York: Praeger.

    Google Scholar 

  • Hogarth, Robin, (ed.) (1982).New Directions for Methodology of Social and Behavioral Science: Question Framing and Response Consistency. San Francisco, CA: Jossey-Bass.

    Google Scholar 

  • Huber, Oswald. (1980). “The Influence of Some Task Variables on Cognitive Operations in an InformationProcessing DecisionModel,”Acta Psychologica 45, 187–196.

    Google Scholar 

  • Irwin, Julie R., Douglas Schenk, Gary H. McClelland, William D. Schulze, Thomas Stewart, and Mark Thayer. (1990). “Urban Visibility: Some Experiments on the Contingent Valuation Method.” In C. V. Mathei (ed.),Visibility and Fine Particles. Pittsburgh, PA: Air and Waste Management Association, 647–658.

    Google Scholar 

  • Irwin, Julie R., Paul Slovic, Sarah Lichtenstein, and Gary H. McClelland. (1993). “Preference Reversals and the Measurement of Environmental Values,”Journal of Risk and Uncertainty, 6(1), 5–17.

    Google Scholar 

  • Johnson, Eric J., Robert M. Meyer, and Sanjoy Ghose. (1989). “When Choice Models Fail: Compensatory Representations in Negatively Correlated Environments,”Journal of Marketing Research 26, 255–270.

    Google Scholar 

  • Jones-Lee, Michael, Mark Hammerton, and Richard Phillips. (1985). “The Value of Safety: Results from a National Survey,”Economic Journal 95, 49–72.

    Google Scholar 

  • Kahneman, Daniel, and Jack Knetsch. (1992). “Valuing Public Goods: The Purchase of Moral Satisfaction,”Journal of Environmental Economics and Management 22, 57–70.

    Google Scholar 

  • Kahneman, Daniel, Jack L. Knetsch, and Richard H. Thaler. (1990). “Experimental Tests of the Endowment Effect and the Coase Theorem,”Journal of Political Economy 98, 1325–1348.

    Google Scholar 

  • Kahneman, Daniel, Paul Slovic, and Amos Tversky. (eds.) (1982).Judgment under Uncertainty: Heuristics and Biases. New York: Cambridge University Press.

    Google Scholar 

  • Keeney, Ralph L. (1980).Siting Energy Facilities. New York: Academic.

    Google Scholar 

  • Keeney, Ralph L. (1982). “Decision Analysis: An Overview,”Operations Research 30, 803–838.

    Google Scholar 

  • Keeney, Ralph L., and Howard Raiffa. (1976).Decisions with Multiple Objectives. New York: Wiley.

    Google Scholar 

  • Knetsch, Jack, and Jack Sinden. (1984). “Willingness to Pay and Compensation Demanded,”Quarterly Journal of Economics 99, 507–521.

    Google Scholar 

  • Kopp, Raymond, Paul Portney, and V. Kerry Smith. (1990). “Natural Resource Damages: The Economics Have Shifted after Ohio v. United States Department of the Interior,”Environmental Law Reporter 4, 10127–10131.

    Google Scholar 

  • Lancaster, Kelvin. (1966). “A New Approach to Consumer Theory,”Journal of Political Economy 74, 132–157.

    Google Scholar 

  • Lichtenstein, Sarah, and Paul Slovic. (1971). “Reversals of Preference between Bids and Choices in Gambling Decisions,”Journal of Experimental Psychology 89, 46–55.

    Google Scholar 

  • Loomis, John, Michael Hanemann, and Barbara Kanninen. (1991). “Willingness to Pay to Protect Wetlands and Reduce Wildlife Contamination from Agricultural Drainage.” In A. Dinar, and D. Zilberman (eds.),The Economics and Management of Water and Drainage in Agriculture. Boston, MA: Kluwer Academic.

    Google Scholar 

  • Loomis, John, Michael Lockwood, and Terry DeLacy. (In press). “Some Empirical Evidence on Embedding Effects in Contingent Valuation of Forest Protection,”Journal of Environmental Economics and Management.

  • MacGregor, Donald, and Paul Slovic. (1986). “Perceived Acceptance of Risk Analysis as a Decision-Making Approach,”Risk Analysis 6, 245–256.

    Google Scholar 

  • McClelland, Gary, William Schulze, Donald Waldman, Julie Irwin, and David Schenk. (1991).Sources of Error in Contingent Valuation, draft manuscript. Boulder, CO: University of Colorado, January.

    Google Scholar 

  • Merkhofer, M. W., and Ralph L. Keeney. (1987). “A Multiattribute Utility Analysis of Alternative Sites for the Disposal of Nuclear Waste,”Risk Analysis 7, 173–194.

    Google Scholar 

  • Mitchell, Robert C., and Richard T. Carson. (1989).Using Surveys to Value Public Goods: The Contingent Valuation Method. Washington, DC: Resources for the Future.

    Google Scholar 

  • Payne, John W., James R. Bettman, and Eric J. Johnson. (1992). “Behavioral Decision Research: A Constructive Processing Perspective,”Annual Review of Psychology 43, 87–132.

    Google Scholar 

  • Phillips, Carl, and Richard Zeckhauser. (1989). “Contingent Valuation of Damage to Natural Resources: How Accurate? How Appropriate?,”Toxics Law Reporter, October 4, 520–529.

  • Rolston, Holmes. (1981). “Values in Nature,”Environmental Ethics 3, 115–128.

    Google Scholar 

  • Randall, Alan. (1986). “Valuation in a Policy Context.” In Daniel Bromley (ed.),Natural Resource Economics: Policy Problems and Contemporary Analysis. Boston, MA: Kluwer/Nijhoff Publishing, 163–200.

    Google Scholar 

  • Randall, Alan, John Hoehn, and David Brookshire. (1983). “Contingent Valuation Surveys for Evaluating Environmental Assets,”Natural Resources Journal 23, 635–648.

    Google Scholar 

  • Simon, H. (1978). “Rationality as Process and as Product of Thought,”American Economic Review 68, 1–16.

    Google Scholar 

  • Slovic, Paul, Baruch Fischhoff, and Sarah Lichtenstein. (1982). “Response Mode, Framing, and Information-Processing Effects in Risk Assessment.” In Robin Hogarth (ed.),New Directions for Methodology of Social and Behavioral Science: Question Framing and Response Consistency. San Francisco, CA: Jossey-Bass, 21–36.

    Google Scholar 

  • Slovic, Paul, Dale Griffin, and Amos Tversky. (1990). “Compatibility Effects in Judgment and Choice.” In Robin M. Hogarth (ed.),Insights in Decision Making: A Tribute to Hillel J. Einhorn. Chicago, IL: University of Chicago Press, 5–27.

    Google Scholar 

  • Slovic, Paul, and Sarah Lichtenstein. (1971). “Comparison of Bayesian and Regression Approaches to the Study of Information Processing in Judgment,”Organizational Behavior and Human Performance 6, 649–744.

    Google Scholar 

  • Slovic, Paul, Sarah Lichtenstein, and Baruch Fischhoff. (1979). “Images of Disaster: Perception and Acceptance of Risks from Nuclear Power.” In G. Goodman, and W. Rowe (eds.),Energy Risk Management. London: Academic Press, 223–245.

    Google Scholar 

  • Slovic, Paul, and Douglas J. McPhillamy. (1974). “Dimensional Commensurability and Cue Utilization in Comparative Judgment,”Organizational Behavior and Human Performance 11, 172–194.

    Google Scholar 

  • Smith, V. Kerry, William Desvousges, and Ann Fisher. (1986). “A Comparison of Direct and Indirect Methods for Estimating Environmental Benefits,”American Journal of Agricultural Economics 68, 280–290.

    Google Scholar 

  • Stevens, S. S. (1951). “Mathematics, Measurement, and Psychophysics.” In S. S. Stevens (ed.),Handbook of Experimental Psychology. New York: Wiley, 1–49.

    Google Scholar 

  • Stevens, Thomas H., Jaime Echeverria, Ronald J. Glass, Tim Hager, and Thomas A. More. (1991). “Measuring the Existence Value of Wildlife: What Do CVM Estimates Really Show?,”Land Economics 67, 390–400.

    Google Scholar 

  • Tversky, Amos, and Daniel Kahneman. (1981). “The Framing of Decisions and the Psychology of Choice,”Science 211, 453–458.

    PubMed  Google Scholar 

  • Tversky, Amos, Shmuel Sattath, and Paul Slovic. (1988). “Contingent Weighting in Judgment and Choice,”Psychological Review 95, 371–384.

    Google Scholar 

  • Tversky, Amos, Paul Slovic, and Daniel Kahneman. (1990). “The Causes of Preference Reversal,”American Economic Review 80, 204–217.

    Google Scholar 

  • Viscusi, W. Kip, and Wesley A. Magat. (1987).Learning about Risk: Consumer and Worker Responses to Hazard Warnings. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Viscusi, W. Kip, Wesley A. Magat, and Joel Huber. (1986). “Informational Regulation of Consumer Health Risks: An Empirical Evaluation of Hazard Warnings,”Rand Journal of Economics 17, 351–365.

    Google Scholar 

  • Viscusi, W. Kip, Wesley A. Magat, and Joel Huber. (1991). “Pricing Environmental Health Risks: Survey Assessment of Risk—Risk and Risk—Dollar Trade-offs for Chronic Bronchitis,”Journal of Environmental Economics and Management 21, 32–51.

    Google Scholar 

  • von Winterfeldt, Detlof, and Ward Edwards. (1986).Decision Analysis and Behavioral Research. New York: Cambridge University Press.

    Google Scholar 

  • Walsh, R. G., R. D. Bjonback, R. A. Aiken, and D. H. Rosenthal. (1990). “Estimating the Public Benefits of Protecting Forest Quality,”Journal of Environmental Management 30, 175–189.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Decision Research, 1201 Oak Street, 97401, Eugene, OR

    Robin Gregory, Sarah Lichtenstein & Paul Slovic

Authors
  1. Robin Gregory
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Sarah Lichtenstein
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Paul Slovic
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

The authors gratefully acknowledge that this material is based upon work supported by the Decision, Risk, and Management Science Program of the National Science Foundation under Grant Nos. SES 88-12707 and SES 90-22952 to Decision Research. We thank Ward Edwards, Charles Howe, John Kadvany, Ralph Keeney, Julie Irwin, John Payne, and Detlof von Winterfeldt for their insightful comments on an earlier draft of this manuscript. Any opinions, findings, and conclusions or recommendations expressed in this article are those of the authors and do not necessarily reflect the views of the National Science Foundation.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Gregory, R., Lichtenstein, S. & Slovic, P. Valuing environmental resources: A constructive approach. J Risk Uncertainty 7, 177–197 (1993). https://doi.org/10.1007/BF01065813

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF01065813

Key words

Search

Navigation









 ApplySandwichStrip

pFad - (p)hone/(F)rame/(a)nonymizer/(d)eclutterfier!      Saves Data!


--- a PPN by Garber Painting Akron. With Image Size Reduction included!

Fetched URL: https://dx.doi.org/10.1007/bf01065813

Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy