ABSTRACT
Contingent valuation (CV) is a survey-based methodology for eliciting the values people place on goods, services, and amenities (Boyle, 2003).1 Although CV was used mainly in the field of environmental economics in the early years of its existence, today it has a broad range of applications in several areas, for example:
Medical and health care research Health economics is one of the few areas in which surveys have been used for the purpose of evaluating economic policies since the early years of CV development (Carson and Hanemann, 2005), and there are a wide variety of applications of CV in this field:
• WTP/WTA for treatment of illnesses (Zethraeus, 1998; Dranitsaris et al., 2000; Haefeli et al., 2008)
Lieu et
• WTP for health insurance (Dong et al., 2003; Ying et al., 2007; GustafssonWright et al., 2009)
• Disutility of queues for surgery (Bishai and Lang, 2000) • WTP/WTA for informal care (van den Berg et al., 2005; de Meijer et al., 2010)
• Quality improvements in public healthcare facilities (Weaver et al., 1996) Food research In the food research field, the use of CV surveys includes assessing WTP for food products that may be introduced into the market and new food products only available to a small subset of consumers. For example:
• Genetically modified food (Li et al., 2002; Grimsrud et al., 2004; Lusk, 2003; Curtis and Moeltner, 2006)
• Low-pesticide or pesticide-free food (Fu et al., 1999; Boccaletti and Nardella, 2000; Cranfield and Magnusson, 2003)
• Eco-friendly food (Loureiro et al., 2002; Loureiro, 2003; Kimura et al., 2010) • Food labeling (Lusk and Fox, 2002; Loureiro et al., 2006; Tonsor and Shupp, 2009; Tonsor and Wolf, 2011)
Culture In the field of cultural economics, values of cultural facilities, cultural activities, and historic ruins that include“non-use value,”have been estimated by CV. For example:
• Theatre and museums (Martin, 1994; Hansen, 1997; Sanz et al., 2003; Bedate et al., 2009)
• Public libraries (Harless and Allen, 1999; Aabø, 2005; Delaney and O’Toole, 2006)
• Performing arts companies (Evans, 1999) • Public cultural programs (Santagata and Signorello, 2000) • Cultural heritage conservation (Lockwood et al., 1996; Pollicino and Maddison, 2001; Whitehead and Finney, 2003; del Saz Salazar and Marques, 2005)
Risk CV has frequently been used in the context of risk analysis to measure the value of risk reduction in various situations and to estimate the value of statistical life (VSL). For example:
• Job-related fatal accidents (Gerking et al., 1988) • Transportation (McDaniels, 1992; Persson et al., 2001; Carlsson et al., 2004; Hultkrantz et al., 2006; Bhattacharya et al., 2007)
• Crime (Ludwig and Cook, 2001; Atkinson et al., 2005) • Reduction in mortality (Krupnick et al., 2002)
There are many “elicitation formats” in CV. In the early years of CV, the bidding game and open-ended format were widely used. In the bidding
what willingness-to-pay (WTP) is; e.g., “What is the most you would be willing to pay for · · · ?”With these formats, “the survey responses yield a direct measure of WTP which requires little or no further analysis” (Hanemann and Kanninen, 1999). After the epoch-making work of Bishop and Heberlein (1979), however, the single-bounded dichotomous choice (SBDC) format, and later, the double-bounded dichotomous choice (DBDC) format became popular. Unlike the earlier formats, binary or interval data are associated with these formats. To obtain a WTP value from these responses, some kind of statistical model is needed. The accompanying package DCchoice (Nakatani, 2014) provides parametric and nonparametric estimation of SBDC and DBDC CV data.
