Contingent value


Contingent valuation addresses identifying values for goods not typically traded on markets, known as non-market goods. These include high environmental quality, life years, and good health. To establish appropriate values - the relative value of these goods to those goods that are traded on markets - there are a number of methods to estimate value. These include hedonic pricing, contingent valuation, and the travel cost method.



AP interactive decision tree - click any node to select it

Contingent valuation addresses identifying values for goods not typically traded on markets, known as non-market goods. These include high environmental quality, life years, and good health. To establish appropriate values - the relative value of these goods to those goods that are traded on markets - there are a number of methods to estimate value. These include hedonic pricing, contingent valuation, and the travel cost method. A full description goes beyond the scope of this guidance. An example of the hedonic pricing method would be examine the extent to which workers in higher risk jobs are paid more than workers in comparable jobs of lower risk; from this is, it is possible to impute a value to that risk. An example of contingent valuation would be to ask people how much they would be willing to pay to protect a rare bird species; from this it is possible to impute a value to that species' existence. An example of the travel cost method would be to survey visitors to a national park about where they came from and how much they are willing to pay for visiting the park and the calculating the value of the park as the consumer surplus.

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Valuation


This section is based on the UNEP PROVIA guidance document


Criteria checklist

1. You want to assess vulnerability.
2. Your focus is on impacts.
3. Monetary values are important.
4. Public decision.
5. Outcome attributes do not have prices.