Abstract
Many contingent valuation experiments use commodity prices as the payment vehicle. In this note it is shown, in general, that this approach does not allow the investigator to extract the respondent's willingness to pay. However, it is also shown how the valuation question can be formulated so as to yield a commodity price payment vehicle which is equivalent to a lump sum payment.
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The idea for this paper came while teaching the Royal Economic Society Easter School in Birmingham (March/April 1995). I am grateful to my students for stimulating discussions and comments on the subject. Kerry Smith provided me with (as always) insightful comments on an
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Johansson, PO. Commodity prices as payment vehicles in valuation experiments. Environmental and Resource Economics 8, 247–254 (1996). https://doi.org/10.1007/BF00357366
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DOI: https://doi.org/10.1007/BF00357366