History
Contingent valuation surveys were first proposed in theory by S.V. Ciriacy-Wantrup (1947) as a method for eliciting market valuation of a non-market good. The first practical application of the technique was in 1963 when Davis used surveys to estimate the value hunters and tourists placed on a particular wilderness area. He compared the survey results to an estimation of value based on travel costs and found good correlation with his results.
The method rose to high prominence in the 1980s when government agencies were given the power to sue for damage to environmental resources which they were trustees over. Following Ohio v Department of the Interior, the types of damages which they were able to recover included non-use or existence values. Existence values are unable to be assessed through market pricing mechanisms so contingent valuation surveys were suggested to assess them. During this time the EPA convened an important conference with an aim to recommend guidelines for survey design. The Exxon Valdez oil spill in Prince William Sound was the first case where contingent valuation surveys were used in a quantitative assessment of damages. Use of the technique has spread from there.
Read more about this topic: Contingent Valuation
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