Non-market valuation: the potential advantages and applications of a contingent valuation/travel cost method

The valuation of environmental resources is becoming an increasingly important part of policy formulation and evaluation. Techniques that can assess the values of environmental resources are required. Some non-market valuation techniques can value the resource in its current state and then in a hypothetical state. This means that the potential effects of a policy change can be valued in dollar terms. The problems with non-market valuation techniques are that they have many potential sources of error and uncertainty, and that they can be applied in a limited set of circumstances. This report discusses these problems and investigates a hybrid non-market valuation technique, the contingent valuation/travel cost method, that may overcome some of the problems to that other methods are subject to. The potential theoretical benefits of this method are discussed and the situations where it may perform better than other methods are investigated. Experimental designs that may prove the validity and benefits of the contingent valuation/travel cost method are discussed