Contingent Valuation

Contingent valuation (CV) is a survey-based method to derive monetary values for the benefits of goods that are not available for purchase in the market. It specifies a hypothetical market whereupon the provision of the good is contingent on the respondent's maximum willingness to pay (WTP) for it (or, in a minority of cases, the minimum compensation they are willing to accept to be deprived of it). A hypothetical market is the construction, specification, and presentation of the imagined scenario on which respondents value the nonmarketed good. Individual values are aggregated to arrive at an overall societal value of the good. This value can then be compared with the societal cost of providing the good, in a cost-benefit analysis.

Why the Interest?

Interest in CV reflects dissatisfaction ...

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