Putting a value on injuries to natural assets: The BP oil spill

Summary:

When large-scale accidents cause catastrophic damage to natural or cultural resources, government and industry are faced with the challenge of assessing the extent of damages and the magnitude of restoration that is warranted. Although market transactions for privately owned assets provide information about how valuable they are to the people involved, the public services of natural assets are not exchanged on markets; thus, efforts to learn about people's values involve either untestable assumptions about how other things people do relate to these services or empirical estimates based on responses to stated-preference surveys. Valuation based on such surveys has been criticized because the respondents are not engaged in real transactions. Our research in the aftermath of the 2010 BP Deepwater Horizon oil spill addresses these criticisms using the first, nationally representative, stated-preference survey that tests whether responses are consistent with rational economic choices that are expected with real transactions. Our results confirm that the survey findings are consistent with economic decisions and would support investing at least $17.2 billion to prevent such injuries in the future to the Gulf of Mexico's natural resources.

...

The federal judge in an initial phase of the lawsuit involving BP determined that the best estimate of the amount of oil released was 134 million gallons, making it the largest maritime oil spill in U.S. history. On behalf of the trustees of the Gulf's natural resources and under the guidance of the lead agency for this process, the U.S. National Oceanic and Atmospheric Administration (NOAA), we estimated the monetary value of the natural resource damage from the spill, as specified by the Oil Pollution Act (OPA) of 1990. Such estimates can inform settlement negotiations between the government and the responsible parties, be entered as evidence at trial, and contribute to choosing projects to restore injured environmental resources (1). Trustees undertook a number of studies to quantify ecological impacts and economic damages caused by the spill, including what we describe here. The natural resource–damage case was settled in April 2016. The Consent Decree called for total payments of $20.8 billion, $8.8 billion of which was for natural resource damages. Decisions related to the settlement details are confidential.

Economic measures of the damages to natural resources consider the effects on use (or active use) and nonuse (or passive use) values (2). “Use values” arise when an individual derives satisfaction from using a resource (e.g., fishing or visiting a beach), either now or in the future. “Nonuse values” arise when an individual derives satisfaction from the existence of a resource, even though that individual would not visit or use it. The OPA regulation specifies that damage measures include both use and nonuse or the total economic value lost. Private claims by those engaged in commercial fishing or in operating hotels are handled separately.

After the 1989 Exxon Valdez oil spill and controversy over assessing monetary damages with stated-preference surveys, an expert panel (3) recommended criteria for conducting these studies. Research has since established ways to ask stated-choice questions that induce truthful responses and meet these proposed criteria. Subsequent criticism of stated-preference research has focused on how large the change in the average person's value should be with changes in the size of injuries to natural resources. The research we discuss here identified what can be expected on the basis of a conventional economic model of an individual's choices, with minimal assumptions. It also offers evidence that the average individual's likelihood to vote for a program to avoid injuries is causally linked to a consistent understanding of the severity of the injuries.

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The study interviewed a large random sample of American adults who were told about (i) the state of the Gulf before the 2010 accident; (ii) what caused the accident; (iii) injuries to Gulf natural resources due to the spill; (iv) a proposed program for preventing a similar accident in the future; and (v) how much their household would pay in extra taxes if the program were implemented. The program can be seen as insurance, at a specified cost, that is completely effective against a specific set of future, spill-related injuries, with respondents told that another spill will take place in the next 15 years. They were then asked to vote for or against the program, which would impose a one-time tax on their household. Each respondent was randomly assigned to one of five different tax amounts: $15, $65, $135, $265, and $435.

...

https://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

The final questionnaire was administered to a random sample of households in the contiguous United States that included at least one English-speaking adult. Face-to-face interviews were completed between October 2013 and July 2014 by nearly 150 trained interviewers. A total of 3,656 people completed the survey for a weighted response rate of 48%. A nonresponse followup (NRFU) survey involved mailing paper questionnaires to households at which no main study interview had been completed. NRFU questionnaires were received from 1492 households, representing a NRFU household response rate of 51% (see SM for details of weighting and nonresponse)....

For each injury description, support for the program declines as the tax increases, consistent with the first test for consistent decisions. For each tax amount, support for the program increases as the set of injuries increases, consistent with the second test.

https://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

The estimate for the lower-bound mean WTP for the smaller set of injuries is $136 (standard error $6.34) and for the larger set is $153 (standard error $6.87). The aggregate estimate reported at the outset—$17.2 billion—uses the WTP lower-bound estimate for the larger set of injuries ($153) multiplied by the number of households (112,647,215) represented by the sample.

...

http://science.sciencemag.org/content/356/6335/253

by Richard C. Bishop, Kevin J. Boyle, Richard T. Carson, David Chapman, W. Michael Hanemann, Barbara Kanninen, Raymond J. Kopp, Jon A. Krosnick, John List, Norman Meade, Robert Paterson, Stanley Presser, V. Kerry Smith, Roger Tourangeau, Michael Welsh, Jeffrey M. Wooldridge, Matthew DeBell, Colleen Donovan, Matthew Konopka, Nora Scherer

Science http://science.scienceag.org

Volume 356, Issue 6335;  21 Apr 2017; pages 253-254

Good parks – bad parks: the influence of perceptions of location on WTP and preference motives for urban parks

Abstract:

Urban parks generate substantial public benefits, yet explicit economic assessments of such values remain relatively rare. Surveys of willingness to pay (WTP) were undertaken to assess such values for proposed new parks. The analysis assessed how preference motives and values varied according to the location of parks. Results revealed greater altruistic motivation and higher overall values for the creation of inner city as opposed to suburban parks. Spatial decomposition revealed that, after controlling for other determinants such as incomes, values generally increase for households closer to proposed parks, but that a significant downturn in values is evident for households located very close to a proposed inner city park; a finding which echoes concerns regarding the potential for such sites to provide a focus for antisocial behaviour. While these findings provide strong overall support for provision of public parks they highlight, the importance of perceptions of location and the potential for localised dis-benefits.

...

Suveys were administered face to face at participant’s homes. This enabled us to remind respondents of their budgetary constraints as well as the existence of potential substitute sites. Participants were informed that “we are researching the value of parks to the people of Norwich” and wished to interview people about their experiences and views.... Participants were shown stock photos of a verdant English park and informed that the park once complete would look like the photograph.... They were asked in an open ended format to explain their choice and to categorise their expected usage of the park into one of four categories.... Interviewers explained that the significant costs of creating the new parks would be met through an increase in their annual council tax bill.

https://en.wikipedia.org/wiki/List_of_parks,_gardens_and_open_spaces_in_Norwich

Key results are in the table below:

 

...

The Tobit models produce very similar aggregate values for park A (Mean based = £1,130,674, Tobit based = £1,297,970) when protestors are ignored.  The inclusion of a lower bound to account for protestors in the Tobit model also resulted in similar values to the equivalent measure based aggregation (mean based = £933,302 Tobit based = 1,140,256). 

...

Results of the CV survey presented in this paper confirm previous findings that parks are highly valued public goods, with the creation of new parks in the city of Norwich having the potential to generate substantial value to residents. The low protest bid rate in the sample suggests that not only do residents have strong preferences towards the creation of new parks but that, at least in principle, they are willing to pay for increased provisioning through a familiar and realistic payment vehicle. Using an ex ante valuation allowed values and preference motives to be compared for two locations revealing significant differences in both mean WTP and its determinants.

Pick a number, but not just any number: valuation uncertainty and maximum willingness to pay

Abstract:

Empirical results suggest that contingent valuation method (CVM) respondents are uncertain of their valuations, which has led critics of the method to raise issues about its validity. Alternative approaches to resolve the problem have been proposed, involving different willingness to pay (WTP) response formats allowing respondents to explicitly express uncertainty. This paper compares differences between certain and uncertain responses for four different response formats. The results suggested that mean and median (WTP) were not significantly different for respondents who were certain about their valuations. This was generally not the case for respondents who were uncertain about their valuations. However, the median WTP was not found to be significantly different for uncertain and certain respondents. A conclusion for a standard CVM application is that the sample median WTP value could serve as a proxy measure of population maximum mean WTP when uncertainty has been removed.

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The analysis is based on data from a mail survey on outdoor recreation in southern Sweden.... Some previous studies targeted visitors to a specific recreation area with corresponding high familiarity with the good being valued . By contrast, this study targeted ‘an average visit’ to an unspecified forest area the respondent uses based on the Right of Public Access. This customary right allows people to freely roam the countryside and put up camp for one night regardless of land ownership [which] ... is not traded in any market, implying that it has the characteristics of a public good ...

http://wallpaperweb.org/wallpaper/nature/beechwood-forest-skane-sweden_19694.htm

The resulting sample would ... be expected to involve a wide range of familiarity with the good being valued....The hypothetical valuation scenario was the same for all questionnaire versions.... The ... valuation question [was] worded as follows:

Imagine that you would continue to visit and experience the forest as you normally do. You would travel the same distance to the forest and do similar activities. Consider that your expenses to visit the forest would increase, i.e. became larger than what you stated in the previous question. [which referred to the total cost related to an average forest visit, authors’ comment] How large would your total maximum cost for an average forest visit be before you would decide not to visit the forest?

The respondents were thus faced with the task of expressing their valuation as an equivalent variation (ev), i.e. the maximum WTP to avoid losing their current forest recreation.

The four response formats were open-ended (OE), interval open-ended (IOE), multiple-bounded dichotomous choice (MBDC) and what we have here chosen to call line scale (LS).... Three (OE, IOE and MBDC) of the four samples included a follow-up question on valuation certainty. Information was given that 100% probability would mean 100% acceptance of the stated amount and 0% probability would mean 0% acceptance of the stated amount, but the respondent was allowed to state any probability within those values....

...

[Responses are presented in the table below]

The OE survival curve is generally bounded by the IOE lower and upper bounds. The ranges differ substantially, as the highest reported value in the OE format was SEK 5000, whereas it was SEK 10,000 for the upper bound of the IOE format. Consequently, respondents gave considerably higher values than in the OE format when explicitly asked for their upper bound valuations in the IOE format. By weighting the responses with the reported uncertainties, the response distributions became more clustered as seen in Figure 4.

Figure 4. Survival curves for open-ended responses adjusted for valuation uncertainty.

...

Willingness to Pay for a Highland Agricultural Restriction Policy to Improve Water Quality in South Korea: Correcting Anomalous Preference in Contingent Valuation Method

Abstract: This study examines the willingness to pay (WTP) for the highland agriculture restriction policy which aims to stabilize the water quality in the Han River basin, South Korea. To estimate the WTP, we use a double-bounded contingent valuation method and a random-effects interval-data regression. We extend contingent valuation studies by dealing with the potential preference anomalies (shift, anchoring, and inconsistent response effects). The result indicates that after the preference anomalies are corrected, the statistical precision of parameter estimates is improved. After correcting the potential preference anomalies, estimated welfare gains are on average South Korean currency (KRW) 2,861 per month per household. Based on the WTP estimate, the total benefits from the land use restriction policy are around KRW 297.73 billion and the total costs are around KRW 129.44 billion. The net benefit is, thus, around KRW 168.29 billion. This study suggests several practical solutions that would be useful for the water management. First, a priority should be given to the valid compensation for the highland farmers’ expected income loss. Second, it is necessary to increase in the unit cost of the highland purchase. Third, wasted or inefficiently used costs (e.g., overinvestment in waste treatment facilities, and temporary upstream community support) should be transferred to the program associated with high mountainous agriculture field purchase. Results of our analysis support South Korean legislators and land use policy makers with useful information for the approval and operationalization of the policy.

https://en.wikipedia.org/wiki/Han_River_(Korea)

http://www.mdpi.com/2073-4441/8/11/547/htm

by Ik-Chang Choi 1, Hyun No Kim 2, Hio-Jung Shin 3,*, John Tenhunen 1 and Trung Thanh Nguyen 4

1 Bayreuth Center of Ecology and Environmental Research, University of Bayreuth, 95440 Bayreuth, Germany

2 Environmental Policy Research Group, Korea Environment Institute, 30147 Sejong, Korea

3 Department of Agricultural and Resource Economics, Kangwon National University, 24341 Chuncheon, Korea

4 Institute for Environmental Economics and Word Trade, University of Hannover, 30167 Hannover, Germany

* Correspondence: Tel.: +82-33-250-8667

Water http://www.mdpi.com/journal/water

2016, Volume 8, Issue 11; Received: 29 August 2016 / Accepted: 14 November 2016 / Published: 23 November 2016

Keywords: double-bounded contingent valuation method; willingness to pay; random-effects interval-data regression; potential preference anomalies; benefit-cost analysis

Valuing hypothetical wildfire impacts with a Kuhn–Tucker model of recreation demand

Abstract

This study uses a nonmarket valuation method to investigate the recreation values of the San Jacinto Wilderness in southern California. The analysis utilizes survey data from a stated-choice experiment involving backcountry visitors who responded to questions about hypothetical wildfire burn scenarios. Benefits of landscape preservation are derived using a Kuhn–Tucker (KT) demand system. Model results suggest that recreationists are attracted to sites with recent wildfires that can be viewed up-close. For example, recreational welfare estimates increased for sites that were partially affected by different types of wildfires, with the greatest gains being observed for the most recent wildfires. Per person mean seasonal willingness-to-pay varied from a low of $10 to a high of $48, for total gains ranging from $62,223 to $635,286. However, wildfires that cause trail closures create welfare losses. Seasonal losses per person for complete closure of particular sites range from $3 to $221, for total losses ranging from $29,600 to $2.9 million.

https://en.wikipedia.org/wiki/List_of_California_wildfires

Highlights

• Analysis uses survey data from a stated-choice experiment involving backcountry visitors.

• Recreationists are attracted to sites with recent low intensity wildfires that can be viewed up-close.

• Recreational welfare estimates increased for sites that were partially affected by different types of wildfires.

• Wildfires that cause trail closures create welfare losses.

http://www.sciencedirect.com/science/article/pii/S1389934115300319

by José J. Sánchez 1, Ken Baerenklau 2, Armando González-Cabán 1

1. USDA Forest Service, Pacific Southwest Research Station, 4955 Canyon Crest Drive, Riverside, CA 92507, USA
2. University of California, Riverside, Riverside, CA 92521, USA

Forest Policy and Economics http://www.sciencedirect.com/science/journal/13899341 via Elsevier Science Direct www.ScienceDirect.com

Volume 71, October 2016, Pages 63–70;

Keywords: Kuhn–Tucker demand system model; Forest recreation value; Hypothetical burn scenarios; Web-based survey; Nonmarket valuation

☆ This article is part of a special issue entitled “Integrating ecosystem service concepts into valuation and management decisions" published in Forest Policy and Economics 71, 2016.

Egyptian consumers' willingness to pay for carbon-labeled products: A contingent valuation analysis of socio-economic factors

Abstract

Carbon emissions from products contribute to anthropogenic climate change. Because of the growing concern over the environmental impact of production and consumption of consumer goods, carbon footprint information started to appear on labels of several products. In this paper we use both parametric and non-parametric econometric models in order to estimate Egyptian consumers' willingness to pay (WTP) for carbon-labeled products. Contingent valuation methods based on log-logistic, log-normal and Weibull regression models revealed that consumers in Egypt are willing to pay a price premium of approximately 75 Egyptian pounds (EP) for carbon-labeled products based on the single-bound dichotomous choice (SBDC) model and up to 90 EP based on the double-bound dichotomous choice (DBDC) model. From a socio-economic perspective, results have also revealed that income, age, gender, and educational level have a significant influence on the respondent's WTP. Implications of this study highlight the fact that understanding consumers' preferences for eco-friendly products may play an important role in formulating environmental policy changes to face complex problems as diverse as environmental pollution or global climate change.

http://www.sciencedirect.com/science/article/pii/S0959652616308551

by Mohamed M. Mostafa, Gulf University for Science and Technology, West Mishref, Kuwait

Received 9 January 2015, Revised 5 February 2016, Accepted 27 June 2016, Available online 4 July 2016

Journal of Cleaner Production via Elsevier Science Direct www.ScienceDirect.com

Volume 135, 1; November, 2016; Pages 821–828

Keywords: Carbon-labeled products; Contingent valuation methods; Willingness to pay; Egypt

The value of wetlands in Quebec: a comparison between contingent valuation and choice experiment

Abstract:

This study aims to evaluate the non-market values of ecosystem services generated by wetlands in southern Quebec. To accomplish this, we evaluated the value of wetland services related to (1) habitat for biodiversity, (2) flood control, (3) water quality and (4) climate regulation. Two non-market valuation methods are proposed, contingent valuation and choice experiment. Our study aims to measure both the population's willingness to pay (WTP) for wetland preservation and restoration and to understand which environmental attributes and socioeconomic characteristics motivate people's responses. We also compared the results of the two methods. Our conclusion suggests that the two methods provide statistically convergent WTP values, both in total value and in relative importance for different attributes involved. Our result also confirms the coefficient equivalence between the estimation models using the data from the two methods.

...

Wetlands are among the most important and productive natural systems on the planet. Canada hosts 25% of the planet’s wetlands (127 million hectares; Environnement Canada 2004). In urban areas, however, their extent has been reduced by 80% 98% over the last two centuries because of drainage, filling or direct destruction (Environment Canada 1991).....

...

This study evaluates the value of four services provided by wetlands ... via two non-market valuation methods, CV [Contingent Valuation] and CE [Choice Experiment].

...

In this study, we used two non-market valuation methods (CV and CE) to estimate the social benefit generated from improving wetlands in Quebec through preservation and restoration. Our results show that the WTP per year per household varies from $447 (CE) to $465 (CV), depending on methods. This mean WTP value can also be affected by respondents’ socioeconomic characteristic such as age (¡), income (C), education (C), gender (male > female), etc. Our conclusion suggests that the two methods provide statistically convergent WTP values, both in total value and in relative importance of different attributes involved. Using the method proposed by Swait and Louviere (1993), our result also confirms the coefficient equivalence between the estimation models using the data from the two methods. These conclusions suggest a fairly robust and consistent equivalence between CV and CE and provide an interesting contrast with the study of Christie and Azevedo (2009), which suggested that the WTP reported by repeated CV data to be lower than that reported by full-set CE data, but at the same time, it provided the evidence of coefficient equivalence between the two methods.

https://en.wikipedia.org/wiki/Portal:Wetlands/Selected_picture#/media/File:Laguna01.jpg

We can also compare our WTP value to that reported by previous Canadian studies that evaluated the similar wetland-related ecological services. Pattison, Boxall, and Adamowicz (2011) based on a scenario aiming at restoring the wetlands in Manitoba to 100% of 1968 level, reported a range of $319- $375 for annual per household WTP which englobes five attributes: water quality, flood control, soil erosion, wildlife habitat, carbon capture and storage.13 Lantz et al. (2013), based on a scenario of over 40% increase in wetland area in southern Ontario, reported a WTP per year per household varying from $264 to $273 for the improvement of four attributes: water quality, flood control, wildlife habitat and carbon storage.

Finally, Dias (2011) reported a range of WTP varying between $240 and $375 per annual per household, but their study only considered three attributes, including riparian buffer width, wildlife habitat and water quality. Clearly, the composition of ecological service attributes proposed in our paper is very similar to that of Pattison, Boxall, and Adamowicz (2011), it is therefore logic to see our reported WTP per year per household to be closest to this study, with the WTP values reported by Pattison, Boxall, and Adamowicz (2011) falling well into the 95% confidence interval of our WTP estimate.

Multiplying the per household per year payment with the number of the household in Quebec (i.e. 3,325,584), we can obtain the total yearly value of the ES generated by the restored wetlands in Quebec as being equal to 1.49 1.55 billion dollars for 400,000 hectares or approximately $3,725- $3,866 per hectare per year. This result is comparable with values obtained through benefit transfer approaches for the wetlands in Quebec, such as Dupras, Alam, and Rev eret (2015), $5,284 -$5,463/ha/year for five ES,16 and Dupras and Alam (2015), $4593/ha/year for seven ES, both for the region of Montreal, or He et al. (2015), $4702 and $9080/ha/year for the average value of the wetland located in the drainage basins of Yamaska and Becancour rivers based on a metaanalysis and detailed geographical information.

Welfare effects of mining externalities: a combined travel cost and contingent behaviour study

Abstract:

This paper applied the combination of travel cost method and contingent behaviour method to estimate the change in the recreational use value of the tourism site as a result of the adjacent mine implementation. The externalities considered were the visibility of the mine to the highest peaks of the area, traffic and noise effects, impacts on endangered aquatic species, and impacts on recreational possibilities. The data, containing five observations from each respondent, were analysed with the negative binomial count data model. The results show the sensitivity of visitors to the geographical scope and magnitude of mining externalities and to the visibility of the mine to the highest peaks. Moreover, the number of intended visits to the area correlates with gender, age, and recreational activities. Compared to an average visitor of the site, anglers, paddlers, and overnight hikers were subject to larger losses in welfare. Alternative scenarios on future mining externalities correspond to 29%–86% reductions in annual number of trips, corresponding to an annual welfare loss of 196–577€ for an average tourist.

https://en.wikipedia.org/wiki/Rukatunturi
http://www.tandfonline.com/doi/full/10.1080/21606544.2015.1107511 

by Anna-Kaisa Kosenius & Paula Horne both of Pellervo Economic Research PTT, Eerikinkatu 28A, FI-00180 Helsinki, Finland

Journal of Environmental Economics and Policy http://www.tandfonline.com/loi/teep20#.VtMnMdCzDC8

Publishing online: November 7, 2015

Keywords: Contingent behaviour, travel cost method, mining, externalities, national parks, recreation, nature-based tourism,  environmental valuation
An earlier version of the paper is currently available free of charge at http://www.webmeets.com/files/papers/eaere/2015/750/eaere2015%20mining%20externalities.pdf

How Much Are Floridians Willing to Pay for Protecting Sea Turtles from Sea Level Rise?

Abstract:

Sea level rise (SLR) is posing a great inundation risk to coastal areas. Some coastal nesting species, including sea turtle species, have experienced diminished habitat from SLR. Contingent valuation method (CVM) was used in an effort to assess the economic loss impacts of SLR on sea turtle nesting habitats for Florida coasts; and to elicit values of willingness to pay (WTP) of Central Florida residents to implement certain mitigation strategies, which would protect Florida’s east coast sea turtle nesting areas. Using the open-ended and dichotomous choice CVM, we sampled residents of two Florida communities: Cocoa Beach and Oviedo. We estimated the WTP of households from these two cities to protect sea turtle habitat to be between $42 and $57 per year for 5 years. Additionally, we attempted to assess the impact of the both the respondents’ demographics and their perception toward various situations on their WTP value. Findings include a negative correlation between the age of a respondent and the probability of an individual willing to pay the hypothetical WTP amount. We found that WTP of an individual was not dependent on prior knowledge of the effects of SLR on sea turtle habitat. The greatest indicators of whether or not an individual was willing to pay to protect sea turtle habitat were the respondents’ perception regarding the trustworthiness and efficiency of the party which will implement the conservation measures and their confidence in the conservation methods used. Respondents who perceive sea turtles having an effect on their life were also more likely to pay.

http://www.an1mal.org/2013/05/25/in-the-us-52-sea-turtles-converge-on-florida-sand-and-swim-free/

http://link.springer.com/article/10.1007/s00267-015-0590-1

by Ahmed Hamed, Kaveh Madani , Betsy Von Holle, James Wright, J. Walter Milon and Matthew Bossick
Environmental Management via Springer www.Springer.com
Volume 57, Issue 1; January 2016; pages 176-188; First online: 30 August 2015

Keywords: Sea level rise Sea turtle Ecosystem service valuation Contingent valuation Florida

Economic Valuation of the Philippine’s Caramoan Beachscape

Abstract:
This study determined the tourists’ willingness to pay (WTP) for the conservation of Caramoan beachscape in Camarines Sur, Philippines, as inputs in establishing the appropriate payment for environmental services for the sustainable development of ecotourism and coastal resource management of the area. The study employed the contingent valuation method (CVM) using four analytical models.

https://www.rare.org/campaign/siruma-camarines-sur-philippines-sustainable-fisheries 

Based on the results, majority of the Caramoan tourists are younger, adventurous, without familial obligations, and highly educated and earn a relatively high income. One half of the visitors are willing to pay to promote the sustainability of the beachscapes. The visitors’ WTP in the general model was estimated to be PHP 897. The average monthly visitors were estimated to be 1,000 tourists per month. Using these data, the total economic value of conserving the beachscapes in Caramoan was estimated to be PHP 10.76 million annually. Bid amount, age, and income were the only factors that consistently correlated with WTP in all of the analytical models. This indicates that younger visitors and those who have higher income are more likely to be willing to pay for conservation.

The estimated economic value of conserving the Caramoan beachscape justifies the relevance of investing public funds to pursue sustainable beachscape ecotourism development in Caramoan. This study is an attempt to contextualize PES for beachscape. It highlighted the priority concerns for sustainable source of fund for conservation and harmonized institutional arrangements for beachscape tourism and coastal resource management. It supported the potential of implementing PES within a community-based coastal resource management framework under a marine fishery reserve-sanctuary setting comanaged by the community and the Caramoan LGU or within a natural protected area framework managed by the Caramoan Natural Park Protected Area Management Board.

http://link.springer.com/chapter/10.1007/978-981-10-0141-3_2

by Raul G. Bradecina
Chapter in book Marine and Coastal Ecosystem Valuation, Institutions, and Policy in Southeast Asia
February 4, 2016 pages 17-30

Keywords: Beachscape valuation Coastal resource management Payment for environmental services Caramoan

Performance Evaluation of Extreme Bicycle Scenarios

http://dx.doi.org/10.1016/j.sbspro.2014.01.084

Abstract:

This present work evaluates the performance of extreme bike scenarios for partners-cities of the Central Europe project “BICY”. With extreme bike scenarios we mean that a city has implemented the best possible conditions for cycling. Our analyses confirm that approximately half of all urban trips are less than five km and could be done by bike. Some cities in the Netherlands have shown that bike mode shares of 40% and higher can be achieved. The question is how much cycling infrastructure and investments are required to convert a city into a top cycling city and what would be the benefits?

For the purpose of establishing a quantitative relation between infrastructure investments, increase in cycling and effects on the environment and health, we reduce the cycling conditions to the presence of cycling infrastructure. It is shown that such a reduction is a conservative assumption as promotion, mobility management and education are low cost measures to increase bike mode share even without expanding the cycling network. The health benefits have been calculated using the HEAT framework developed by the World Health Organization. This is a standard to determine the costs of lives saved due to reduced mortality as a consequence of more physical exercise.

Gathering official data and detailed information from mobility surveys in 13 central European cities with low to medium-high cycling levels, we have estimated the potential bike share with an average of approximately 50%, the required cycling infrastructure necessary to reach the potential between 30 and 370 km of exclusive bikeways and cycling infrastructure costs between 10-60Million. The expected benefits/cost ratios have been found between 1.2 and 15, average 5.7. However, analyses of current stated preferences show that the share of persons willing to start cycling is far less than the potential, even if ideal cycling conditions were provided.

by Joerg Schweizer^, and Federico Rupi

Corresponding author. Tel.: +39 051 209 3338; fax: +39 051 209 3337

Procedia -  Social and Behavioral Sciences

Volume 111, 5 February 2014, Pages 508–517

Transportation: Can we do more with less resources? – 16th Meeting of the Euro Working Group on Transportation – Porto 2013

Keywords: bicycling; cost-benefit analysis; CBA; HEAT; health impact assessment; transport economics; life expectancy; transport policy

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Economic valuation of preventing beach erosion: comparing existing and non-existing beach markets with stated and revealed preferences

http://www.tandfonline.com/doi/full/10.1080/21606544.2013.863742

Abstract

Predicted climate change is likely to increase beach erosion in the future, inducing higher costs of beach maintenance. Hence, additional funds for their protection will be required. We examine the willingness to pay (WTP) of beach visitors for preventing beach erosion in the form of daily beach entrance fees in Crikvenica, Croatia, by applying the contingent valuation method. This is the first beach valuation study for this country in transition which has emerged as an important Mediterranean tourist destination. The novelty of our study is that it compares WTP estimates for an existing and a non-existing beach market. This is done by conducting a survey at the beach where an entrance fee is already levied and at the nearest open-access beach. Based on the initial (follow-up) valuation question, the stated WTP per adult per day for avoiding beach erosion equals €1.69 (€1.26) for the paid beach and €2.08 (€1.84) for the free beach. In addition, the travel cost method is employed. It reveals that consumer surpluses for visiting the paid and the free beach amount to €2.57 and €1.74, respectively.

by Ivana Logarab* & Jeroen C.J.M. van den Berghacde

Journal of Environmental Economics and Policy via Taylor and Francis www.tandfonline.com

Volume 3, Issue 1; 2014; pages 46-66; DOI: 10.1080/21606544.2013.863742; Published online: 05 Dec 2013

Keywords: contingent valuation, Croatia, entrance fees, stated and revealed preferences, travel cost method

Monetary values for risk of death from air pollution exposure: a context-dependent scenario with a control for intra-familial altruism

http://www.tandfonline.com/doi/full/10.1080/21606544.2013.863743
Abstract:

We extend the individual dynamic model of lifetime resource allocation to assess the monetary value given to the increase in survival probabilities for every member of a household induced by improved air quality. We interpret this monetary value as VPF (value of a prevented fatality), which can also be expressed as a flow of discounted VOLY (value of life years) lost, and account for potential altruism towards other household members. We use a French air pollution contingent valuation survey that provides a description of the life-length reduction implied by a change in air pollution exposure. By privatising the public commodity air pollution, we succeed in ruling out any form of altruism (towards others living today and towards future generations) except altruism towards one's family. We estimate a mean VOLY of €2001140,000, a 30% premium for VOLY in perfect health w.r.t. average expected health status, and a mean VPF of €2001 1.45 million for the respondent, all context-specific. In addition, we find an inverted U-shaped relationship between his/her age and VOLY/VPF, and significant benevolence only towards children under 18.

by Olivier Chanela and Stéphane Luchinia both of Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS, GREQAM and IDEP, Centre de la Vieille Charité, 13236 Marseille Cedex 02, France

Journal of Environmental Economics and Policy via Taylor and Francis www.tandfonline.com
Volume 3, Issue 1, 2014; pages 67-91; Published online: December 16, 2013

Keywords: value of statistical life, air pollution, value of a life year, familial altruism, contingent valuation

In the 1830s, Jeremy Bentham, the founder of utilitarianism, left instructions to be followed upon his death which led to the creation of a sort of modern-day mummy. He asked that his body be displayed to illustrate how the "horror at dissection originates in ignorance"; once so displayed and lectured about, he asked that his body parts be preserved, including his skeleton (minus his skull, which despite being mis-preserved, was displayed beneath his feet until theft required it to be stored elsewhere), which were to be dressed in the clothes he usually wore and "seated in a Chair usually occupied by me when living in the attitude in which I am sitting when engaged in thought." His body, outfitted with a wax head created because of problems preparing it as Bentham requested, is on open display in the University College Londonhttp://en.wikipedia.org/wiki/Mummy

The Contingent Valuation Debate Rages On: From Hopeless to Curious? Thoughts on Hausman’s “Dubious to Hopeless” Critique of Contingent Valuation

http://econpapers.repec.org/paper/aplwpaper/13-07.htm
Abstract: 

Hausman (2012) “selectively” reviews the CVM literature and fails to find progress over the 18 years since Diamond and Hausman (1994) argued that unquantified benefits and costs are preferred to benefits and costs quantified by CVM for policy analysis. In these comments, we provide counter-arguments to the claims made by Hausman. We provide these counterarguments not with the intent to convince the reader that the debate over contingent valuation is settled but rather to urge the community of economists to recognize that the intellectual debate over contingent valuation is still ongoing and that plenty of work remains to be done. We review the literature and argue that (1) hypothetical bias raises important research questions about the incentives guiding survey responses and preference revelation in both real and hypothetical settings that contingent valuation can help answer, (2) the WTP-WTA gap debate is far from settled and the debate raises important research questions about the future design and use of benefit cost analyses of which contingent valuation will undoubtedly be a part, and (3) CVM studies do, in fact, tend to pass a scope test and there is little support for the assertion that an adding up test is the definitive test of CVM validity.

by Timothy C. Haab 1, Matthew G. Interis 2, Daniel R. Petrolia 3 and John C. Whitehead 4

1. Ohio State University
2. Mississippi State University, petrolia@agecon.msstate.edu
3. Mississippi State University
4. Appalachian State University, whiteheadjc@appstate.edu
"From Hopeless to Curious? Thoughts on Hausman’s “Dubious to Hopeless” Critique of Contingent Valuation"

Appalachian State University Department of Economics http://econ.appstate.edu/

Working Paper No 13-07, 2013

via REPEC Research Papers in Economics www.REPEC.org

The full paper is available free of charge at http://econ.appstate.edu/RePEc/pdf/wp1307.pdf

The Hausman paper appeared in the Fall 2012 Journal of Economic Perspectives at http://www.aeaweb.org/articles.php?doi=10.1257/jep.26.4.43
Abstract:
Approximately 20 years ago, Peter Diamond and I wrote an article for this journal analyzing contingent valuation methods. At that time Peter's view was that contingent valuation was hopeless, while I was dubious but somewhat more optimistic. But 20 years later, after millions of dollars of largely government-funded research, I have concluded that Peter's earlier position was correct and that contingent valuation is hopeless. In this paper, I selectively review the contingent valuation literature, focusing on empirical results. I find that three long-standing problems continue to exist: 1) hypothetical response bias that leads contingent valuation to overstatements of value; 2) large differences between willingness to pay and willingness to accept; and 3) the embedding problem which encompasses scope problems. The problems of embedding and scope are likely to be the most intractable. Indeed, I believe that respondents to contingent valuation surveys are often not responding out of stable or well-defined preferences, but are essentially inventing their answers on the fly, in a way which makes the resulting data useless for serious analysis. Finally, I offer a case study of a prominent contingent valuation study done by recognized experts in this approach, a study that should be only minimally affected by these concerns but in which the answers of respondents to the survey are implausible and inconsistent.

by Jerry Hausman, MIT

"Contingent Valuation: From Dubious to Hopeless"
 Journal of Economic Perspectives

Volume 26, Number 4; Fall, 2012; pages 43-56.

The full paper is available  free of charge at: http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.26.4.43