Behavior-Based Environmental Valuations
Behavior-Based Environmental Valuations
No offense intended, but my guesss is that if
the fraction of US GDP to be devoted to dental care was decided by experts
on dental health (read, "dentists"), it would be higher than if ordinary
citizens could meaningfully be polled as to the importance of improved dental
health relative to other uses of their own money.
Similarly, while environmental experts have useful information as to the
value of environmental projects, whether it be cleaning up after an oil spill,
preserving a wetlands, or foregoing natural resource extraction so as to preserve
the habitat of an endangered species, I am typical in believing that there
is a role to play in budgeting for environmental policies by information as
to the value of environmental projects to consumers, taxpayers, outdoorsmen,
and parents.
Information as to how people evaluate many projects
arises from market prices. The value of a Toyota Prius or a fitness
club contract is well estimated by the price paid. Market prices are
almost no help in estimating the value to indivuals of environmental or other
public projects. The standard approach is called the Contingent Valuation
method, or CVM. It is a survey method, asking respondents how much they
would pay to preserve a wetlands, or whether they would
be willing to pay $X to clean up after an oil spill. The principal problem
with the CVM and other survey methods is that the answers do not associate
with any real financial commitments, and are thus overstated by some unknown
degree of hypothetical bias. (A page on problems of CVM is here.)
Recent developments in value-eliciting laboratory methodologies and in auction
theory
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