Economic values are increasingly used in policy analysis and legal settings. With the growing recognition that many of the things that benefit or harm people are outside the market system, have come increasing efforts to develop nonmarket valuation techniques. One such technique is the contingent valuation method (CVM). CVM seeks to value environmental and other nonmarket goods and services by asking individuals about their values using survey methods. These procedures are different from the `revealed-preference' methods that economists have historically employed to estimate economic values. Why depart from well-established revealed-preference procedures and apply a `stated-preference' method like CVM? For nonmarket goods and services, revealed-preference methods have two shortcomings that those applying CVM hope to avoid. First, revealed-preference methods involve econometric problems that have yet to be fully overcome. The second shortcoming of revealed-preference methods is that such methods, when applied to environmental amenities, are likely to be only partial measures of value. Given the tremendous interest that exists in economic values and the limitations of revealed-preference methods, it is not surprising that interest in CVM has grown rapidly. Environmental Resource Valuation reviews the application of CVM and compares American experiences in nonmarket evaluation with those in other countries.

Fifteen papers written by scholars examining the relative merits of contingent valuation analysis of environmental resources and suggesting a research agenda to improve estimates. Central to the discussions is how economic valuation is obtained through survey measurements, and how practitioners must address the need for a broad perspective in valuation research, support replications studies, define the relationship between survey structure and survey responses, and promote better internal and external validity testing. Annotation copyright by Book News, Inc., Portland, OR

Agriculture, in addition to producing food, hides and fibre, also provides many other goods and services not priced in the market. These include environmental outputs such as rural amenities and disamenities, but also social and cultural functions. The economic value of these non-market goods and services of agriculture can be assessed by estimating how much purchasing power people would be willing to give up to acquire those outputs if they were forced to make a choice. The contingent valuation method (CVM) is one of the most widely used methodologies developed for the measurement of the value of non-market goods.

Allocation of natural resources has become a prominent concern at the local, state, and federal level. Competing uses for increasingly scarce resources are requiring that the relative values of those uses be investigated. Although many types of value are important in decision making, this book is concerned with the economic value of natural resources. Economic values for certain natural resources are readily observable in markets. For others, however, market prices are not available, and estimates of value must be made through nonmarket valuation techniques. The progress that has been made in improving the theory, methods, and applications of these techniques has been remarkable. Along with the progress, however, come new problems that must be addressed. The chapters presented in this volume are a collection of examples of both progress and problems.

Just as individuals have preferences regarding the various goods and services they purchase every day, so they also hold preferences regrding public goods such as hose provided by the naural environment. However, unlike provate goods, environmental goods often cannot be valued by direct reference o any market price. Thsi amkes economic analysis of the costs and benefits of environmental change problematic. Over the past few decades a number of methods have developed to address this problem by attempting to value environmental preferences. Principal among hese has been the contingent valuation (CV) method which uses surveys to ask individuals how much they would be willing to pay or willing to accept in compensation for gains and losses of environmental goods. The period from the mid-1980s to the present day has seen a m,assive expansion in use of the CV method. From its originalroots int eh USA, through Europe and the developed world, the method has now reached worldwide application with a substantial proportion of current studies being undertaken in developing countries where environmental services are often the dominating determinant of everyday living standards. The method has simultaneously moved from the realm of pure academic speculation into the sphere of instiutional decision analysis. However, the past decade also witness a developing critique of the CV method with a number of commentators questioning the underlying validity of its dervied valuations. This volume, therefore, reflects a time of heated debate, as wellas from commentators who see it as an interesting experimental tool regardless of the question of absolute validity of estimates. The book embraces the theoritical, methodologicl, empirical, and institutional aspects of the current debate. It covers US, European , and developing country applications, and the institutional frameworks within which CV studies are applied.

This is a practical book with clear descriptions of the most commonly used nonmarket methods. The first chapters of the book provide the context and theoretical foundation of nonmarket valuation along with a discussion of data collection procedures. The middle chapters describe the major stated- and revealed-preference valuation methods. For each method, the steps involved in implementation are laid out and carefully explained with supporting references from the published literature. The final chapters of the book examine the relevance of experimentation to economic valuation, the transfer of existing nonmarket values to new settings, and assessments of the reliability and validity of nonmarket values. The book is relevant to individuals in many professions at all career levels. Professionals in government agencies, attorneys involved with natural resource damage assessments, graduate students, and others will appreciate the thorough descriptions of how to design, implement, and analyze a nonmarket valuation study.