Contingent valuation: A practical alternative when prices aren’t available

A person may be willing to make an economic tradeoff to assure that a wilder-ness area or scenic resource is protected even if neither that person nor (perhaps) anyone else will actually visit this area. This tradeoff is commonly labeled “passive use value, ” although it is also known by other names including “existence value ” and “stewardship value. ” As Krutilla (1967) explained in his classic American Economic Review piece, “Conservation Reconsidered, ” passive use is not generally revealed by choices in the marketplace, unlike many local public goods which are either capitalized into property values or which require the consumption of complementary private goods to enjoy. Passive use represents the quintessen-tial pure public good in that exclusion is not possible, nor even desirable, because enjoyment is nonrivalrous. The concept of passive use has played an increasingly important role in economic thinking concerning the value of public goods, and particularly, those involving environmental and natural resource amenities where passive and direct use values are often thought to coexist (Freeman 2003). In Carson, Flores, and Mitchell (1999), my coauthors and I provide a detailed overview of passive use value. Without market information, other strategies must be considered to develop measures of economic tradeoffs that involve passive use value. For example, passive values can be captured through a single-issue referendum, but popular votes on ballot propositions that relate to these types of concerns are nonexistent at the national level and infrequent at the state or local level. However, more than a half-century ago, early studies of public goods like Bowen (1943) and Ciriacy-Wantrup (1947) drew the implication that, when the ballot box is not available, deman