Modelling the Non-market Environmental Costs and Benefits of Biodiversity Projects Using Contingent Valuation Data

Douglas Macmillan (), Elizabeth Duff and David Elston

Environmental & Resource Economics, 2001, vol. 18, issue 4, 410 pages

Abstract: CV studies rarely ask willingness to accept (WTA)questions, yet there are a range of environmentalprojects where there are likely to be potential losersas well as gainers. This paper presents evidence fromsix biodiversity projects that the inclusion ofcontingent compensation payments from thoserespondents who preferred the status quo cansubstantially reduce net project benefits, even whenthe proportion of losers is relatively small. Astatistical model for estimating the mean welfaremeasure from dichotomous choice data which allows forboth positive WTP, zero WTP, and WTA is described. Asmany environmental projects are likely to create bothgainers and losers, we recommend that CV analysts giveserious consideration to the collection and analysisof WTA data otherwise they risk generating biasedestimates of project benefits. Copyright Kluwer Academic Publishers 2001

Keywords: biodiversity; CV; non-market costs; willingness to accept; willingness to pay (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1023/A:1011169413639

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