Contingent Valuation Methodologies in Environmental Economics

Contingent valuation is a survey-based approach that elicits individuals’ willingness to pay for non-market environmental goods and services by presenting hypothetical scenarios. Originating in the 1960s, it has become a cornerstone of environmental economics for placing monetary values on biodiversity conservation, pollution reductions, cultural heritage restoration and ecosystem services. Respondents are typically asked whether they would pay a specified sum for a defined improvement or to avoid a defined degradation; responses can then be aggregated to estimate total economic value. Methodological advances over recent decades have addressed strategic bias, hypothetical bias and embedding effects through refined question formats, cheap-talk scripts, split-sample designs and follow-up certainty questions. Both single-bound and double-bound dichotomous choice formats are common, alongside payment cards and open-ended questions. Robust statistical treatment of zero bids and protest responses—often via spike or hurdle models—ensures credible welfare estimates. Contingent valuation studies now inform cost–benefit analyses worldwide, guiding policy on climate adaptation, natural resource management, and cultural heritage preservation by translating ecological and social benefits into metrics commensurate with market-based decision-making.

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Contingent Valuation Methodologies in Environmental Economics publication trend

The graph below shows the total number of articles in contingent valuation methodologies in environmental economics across all publications each year (not limited to Nature Index journals).

Technical terms

Contingent Valuation (CV): A stated-preference survey method for eliciting economic values for non-market environmental goods by posing hypothetical scenarios to respondents.

Willingness to Pay (WTP): The maximum amount an individual is prepared to pay for a specified environmental improvement or to avoid degradation.

Dichotomous Choice Format: A survey design in which respondents are presented with a yes/no question about paying a given amount, often used to simulate a referendum.

Spike Model: A statistical approach that accounts for a spike of zero bids in contingent valuation data by modelling zeros separately from positive willingness-to-pay responses.

References

1. Estimating environmental and cultural/heritage damages of a tailings dam failure: The case of the Fundão dam in Brazil. Journal of Environmental Economics and Management (2023).
2. Economic Valuation of Reducing Submerged Marine Debris in South Korea. Applied Sciences (2020).
3. Public Perspective on Increasing the Numbers of an Endangered Species, Loggerhead Turtles in South Korea: A Contingent Valuation. Sustainability (2020).