The Contingent Valuation of Natural Parks

The contingent valuation technique for measuring the economic value of environmental goods and services has become increasingly popular in recent years and has many advantages over other revealed or stated preference methods. It has been criticised, however, for being inconsistent with economic theory by reflecting altruistic motives and moral obligations. This book examines the role of the 'warmglow' effect (the pleasure derived from giving to good causes or being concerned about the environment) in contingent valuation studies and examines whether warmglow is an underlying force in CV responses.The author argues that if the empirical evidence suggests that warmglow is important, then its magnitude needs to be assessed in the valuation function. The ultimate goal is to disentangle the warmglow effect from the original 'willingness-to-pay' mean estimates and compute a dry estimate, free from any warmglow. The author conducts a CV application in a Portuguese natural park to test the validity of this approach. He tests the premise that the financial contribution by itself constitutes a source of well-being to the respondent and also discusses whether the warm glow component should or should not be included when formulating benefit-cost analysis and environmental policy. This innovative book will be essential reading to all students and scholars of the economics of environmental valuation.