PLANNING AND CONTINGENT VALUATION - SOME OBSERVATIONS FROM A SURVEY OF HOMEOWNERS AND ENVIRONMENTALISTS

A fundamental problem in the application of benefit-cost analysis to planning problems has been the lack of suitable methods for quantifying the value of public goods. The contingent valuation (CV) method has been institutionalized as a method for coping with this problem. This paper is about the validity of CV and issues planners encounter in applications. The results of a survey of homeowners and environmentalists are used to 1) counter critics who argue that CV estimates are inherently implausible, 2) refute the argument that respondents consciously refuse to participate in CV surveys because they object to the idea of valuing the environment, and 3) add to evidence that CV surveys can provide data useful for decision making. An example of how planners might use CV data to inform decision making is provided.