Week 5 - Contingent Valuation

It is important to note that contingent valuation should be used on issues that are more local in nature and do not need to rely on science for policy decision making. Some issues that would benefit from both cost-benefit analysis and contingent valuation are recreational opportunities in rivers or streams, biodiversity restoration and appraisal of brownfields. Contingent valuation can be used to understand the view of the public on each of the issues at hand. For example, the public may see recreational opportunities in their local river very differently from those who are proposing the recreation. They may also be able to bring a new vision of the area to the project. Biodiversity restoration can also have advantages when using contingent valuation. The public may be able to bring light to the loss of biodiversity at the local level.

Contingent Valuation should not be used with issues in which extreme scientific research is needed. One example is the issue regarding damage control of industrial pollution in lakes or streams. For this particular issue, science must be involved to accurately access the extremity of the problem and its’ possible health implications. The public’s view, although important, could not accurately understand the public health implications of the pollution. Contingent Valuation in this case could do more harm than good. An example broader in scope is global warming. Again, in this example, science takes precedence in the decision making platform. Because the cause and effects of global warming are not well defined, it would be difficult for the public to create their own opinions in the issue. In both of these examples, we must rely on science to bear the weight and reliance of the environmental issue.