Contingent Valuation

Contingent valuation is a survey-based method of determining the economic value of a nonmarket resource. It is used to estimate the value of resources and goods not typically traded in the economic markets. It is most commonly related to natural and environmental resources.

Contingent valuation is employed to assess environmental resources, goods, and services. Government agencies apply the technique to estimate use and nonuse values of environmental resources that it oversees and manages, and to make decisions regarding environmental policy and lawsuits, and to assess damages. For example, the government employed this methodology to estimate the environmental damage of the Exxon Valdez oil spill in 1989. Businesses use this technique to estimate cost-benefit values on environmental projects.