Économie et Statistique n° 357-358 Employment - Social Transfers - Pensions - Industry - Environmental Goods Evaluation
The singularity of the contingent valuation method
Ever-growing fears for the environment have led the public authorities to undertake increasingly extensive policies to protect natural assets. However, the non-market nature of environmental goods can make the economic valuation of a public action in this field com-plicated. Economists deal with this problem by using a specific valuation instrument called the contingent valuation method when there is no market to indirectly reveal preferences. This valuation method is based on a survey during which the aim is to assess the amount that each person would be willing to pay, i.e. the willing-ness to pay, to protect and restore an environmental good. The singularity of this method in economic analysis is shown by the theoretical explanations and the practical ways of applying the method. It has two shortcomings : valuation based on the private worth of objects in the public sphere and obtaining information on economic players' preferences by means of surveys, i.e. talking, rather than by observing actions on the markets. Nevertheless, this singularity could generate significant advances in applied public economics, placing consumer-citizen duality and the use of surveys in economic analysis centre stage.