Revisiting the Impact of Order Effects on Sensitivity to Scope: A Contingent Valuation of a Common‐Pool Resource

Julia Martin‐Ortega, M. Azahara Mesa‐Jurado and Julio Berbel

Journal of Agricultural Economics, 2015, vol. 66, issue 3, 705-726

Abstract: While many studies have employed stated preferences methods to estimate the value of non‐market ecosystem goods and services, contingent valuation (CV) still generates a significant amount of criticism. Besides ethical concerns, two of the key criticisms relate to insensitivity to scope and order effects. We examine the expectation that the presence of order effects in stepwise disclosure procedures affects the degree of scope sensitivity. We use data from a CV exercise asking farmers in Southern Spain to value two different levels of guarantee of water supply for irrigation in a context of water scarcity. We find that despite order effects being present, they do not affect the existence or the degree of sensitivity to scope. We conclude that, in the light of the mixed evidence found in the literature and the results of our study, it does not seem justified to ascribe order effects and their connection with sensitivity to scope to study design alone (e.g. step‐wise versus advanced disclosure, top‐down versus bottom‐up). The nature of the environmental good under valuation also matters. Our study of irrigation water as a common‐pool resource suggests that, when clear private benefits also exist, these appear to override any ‘good cause dumping effect’ that might arise from the public good component.

Date: 2015
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