Scenario Identification and Survey Design

  • Richard T. Carson
  • Michael B. Conaway
  • W. Michael Hanemann
  • Jon A. Krosnick
  • Robert C. Mitchell
  • Stanley Presser
Part of the The Economics of Non-Market Goods and Resources book series (ENGO, volume 5)

Abstract

The COS study team undertook this research effort in order to construct a monetary measure of the total ex ante economic value for preventing a specified set of natural resource injuries. There are two standard (Hicksian) monetary welfare measures used by economists: minimum willingness to accept (WTA) compensation to voluntarily give up a good and maximum willingness to pay (WTP) to obtain a good. These measures are defined in relation to an economic agent, for us, the public. Which of these two is the appropriate measure depends on who holds the relevant property rights in a particular good. If the public wishes to prevent oil spills along the coast and the oil companies have a right to spill oil along the coast, the public must purchase from the oil companies their rights to spill oil; and therefore the maximum WTP of the public is the appropriate measure of how much the prevention of oil spills along the coast is worth to the public. But if the public has the right to an unoiled coastline that the oil companies must purchase in order to spill oil, the minimum WTA compensation of the public is the appropriate measure of how much the prevention of oil spills is worth to the public. Since oil companies do not have the right to spill oil along the coast and the public holds the property right to California’s tidelands, submerged lands, and natural resources, WTA is the appropriate measure of economic value. However, using CV to measure WTA entails design features that are difficult to implement successfully;1 hence, a choice measure based on WTP was adopted instead. The WTP measure used here represents a lower bound on the desired WTA measure.2

Keywords

Income Beach Expense Preven Barge 

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References

  1. 1.
    See Mitchell and Carson (1989) for a comprehensive discussion of this issue.Google Scholar
  2. 2.
    For a theoretical discussion of WTP as a lower bound on the desired WTA measure, see Hanemann, 1991, and Carson, Flores, and Hanemann, 1998.Google Scholar
  3. 3.
    A reproduction of the main study survey questionnaire and graphics booklet can be found in Appendix A.Google Scholar
  4. 4.
    The referendum elicitation format was recommended by the NOAA Panel (Arrow,1993, p. 4608).Google Scholar
  5. 5.
    Mitchell and Carson (1989) for an overview of the economic concepts underlying monetary measures of value.Google Scholar
  6. 6.
    Many problems with contingent valuation surveys arise because respondents are asked to make choices in implausible contexts about goods that are too vaguely defined with the result that respondents may perceive their answers as unlikely to influence either provision of or payment for the good. See Mitchell and Carson (1989) for a general discussion of CV survey design issues and Mitchell and Carson (1995) for an overview of current CV survey design issues. Carson, Groves and Machina (1999) discuss incentive issues related to survey design.Google Scholar
  7. 9.
    This mode of survey administration was recommended by the NOAA Panel (Arrow,1993, p. 4608).Google Scholar
  8. 10.
    The rationale for this sequence is discussed in Chapter 3.Google Scholar
  9. 11.
    The escort ship program described in the Exxon Valdez survey was in fact later set up in Prince William Sound, the site of the Exxon Valdez spill, and subsequently prevented a supertanker, which had lost power, from drifting into the rocks; see, e.g.,L.A. Times, March 26, 1993.Google Scholar
  10. 12.
    Vote motivation questions and scenario debriefing questions are both recommended by the NOAA Panel (Arrow et al.,1993, pp. 4608–4609).Google Scholar
  11. 13.
    This strategy was also one of the NOAA Panel’s recommendations (Arrow,1993, p. 4608).Google Scholar
  12. 14.
    These focus groups were held in San Diego, Walnut Creek, Riverside, Sacramento, and Irvine. Later, two additional focus groups were held in San Diego and San Mateo. Focus group transcripts are provided in Appendix J1.Google Scholar
  13. 15.
    In addition, respondent concerns expressed in the in-depth pretest interviews about the effect of oil spills on human health led us to add a vote reconsideration question to the pilot instrument which asked respondents how they would vote if human health was definitely not affected.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2004

Authors and Affiliations

  • Richard T. Carson
    • 1
  • Michael B. Conaway
    • 2
  • W. Michael Hanemann
    • 3
  • Jon A. Krosnick
    • 4
  • Robert C. Mitchell
    • 5
  • Stanley Presser
    • 6
  1. 1.University of CaliforniaSan DiegoUSA
  2. 2.University of AlabamaUSA
  3. 3.University of CaliforniaBerkeleyUSA
  4. 4.Ohio State UniversityUSA
  5. 5.Clark UniversityUSA
  6. 6.University of MarylandUSA

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