Abstract. We report on the results of a large-scale contingent valuation (CV) study conducted after the Exxon Valdez oil spill to assess the harm caused by it. Among the issues considered are the design features of the CV survey, its administration to a national sample of U.S. households, estimation of household willingness to pay to prevent another Exxon Valdez type oil spill, and issues related to reliability and validity of the estimates obtained. Events influenced by the study’s release are also briefly discussed. Key words: natural resource damage assessment JEL classification: Q26

Contingent valuation (CV) has become one of the most widely used non-market valuation techniques. CV’s prominence is due to its flexibility and ability to estimate total value, including passive use value. Its use and the inclusion of passive use value in benefit-cost analyses and environmental litigation are the subject of a contentious debate. This paper discusses key areas of the debate over CV and the validity of passive use value. We conclude that many of the alleged problems with CV can be resolved by careful study design and implementation. We further conclude that claims that empirical CV findings are theoretically inconsistent are not generally supported by the literature. The debate over CV, however, has clarified several key issues related to nonmarket valuation and can provide useful guidance both to CV practitioners and the users of CV results.

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In a static setting, willingness to pay for an environmental improvement is equal to compensating variation. However, in a dynamic setting characterized by uncertainty, irreversibility, and the potential for learning, willingness to pay may also contain an option value. In this paper, we incorporate the dynamic nature of the value formulation process into a study using a contingent valuation method, designed to measure the value local residents assign to a north-central Iowa lake. Our results show that willingness to pay is highly sensitive to the potential for future learning. Respondents offered the opportunity to delay their purchasing decisions until more information became available were willing to pay significantly less for improved water quality than those who faced a now-or-never decision. The results suggest that welfare analysts should take care to

Contingent valuation is an economic tool used for estimating the value that a person places on environmental goods and services. It is particularly useful for estimating the values of non-market and non-use goods and services. Contingent valuation has a number of possible uses for environmental decision-making such as measuring willingness-topay for environmental changes, for risk assessment, in environmental litigation, in policy formulation, and for evaluating investments. Contingent valuation also has possibilities for evaluating watershed management options. This paper examines the uses and limitations of contingent valuation and its possible future applications in watershed management. Positive aspects of contingent valuation include its hypothetical nature and its ability to measure option, bequest, and existence values. However, among problems associated with contingent valuation are a failure to address global impacts, boundary issues, asymmetric valuation of gains and losses, contingent valuation’s hypothetical nature, strategic bidding behavior of respondents, and irrational responses. Many of these drawbacks are important considerations when using contingent valuation for watershed management decisions. Some of these shortcomings may be addressed by use of integrated decision-making, multi-criteria analysis tools, and post-survey debriefing interviews to determine respondent frame of reference. Contingent valuation has clear values to watershed management, but it also has clear limitations. If conducted correctly, in many situations it can be Duberstein is a graduate student and de Steiguer is a

Economic trend information is important to many fisheries managers. The U.S. Fish and Wildlife Service's series of National Surveys of Fishing, Hunting, and Wildlife Associated Recreation has been a source of information on wildlife-related recreation since 1955. Estimates of net economic values for recreational fishing based on contingent valuation questions have been presented for the 1980, 1985, 1991, and 1996 surveys. However, relatively little trend analysis has been performed with the contingent valuation data. The objectives of this paper are to assess trends in net economic values for bass fishing from the 1991 and 1996 surveys. Since similar survey methods have been used with the 1991 and 1996 contingent valuation data we statistically analyze these data to assess similarities and changes in effects of fishing quality and demographic change on net economic values. We find that net economic values are significantly lower in 1996 holding constant catch rates and respondent income. 2

Stockholm 2003NIER prepares analyses and forecasts of the Swedish and international economy and conducts related research. NIER is a government agency accountable to the Ministry of Finance and is financed largely by Swedish government funds. Like other government agencies, NIER has an independent status and is responsible for the assessments that it publishes. The Working Paper series consists of publications of research reports and other detailed analyses. The reports may concern macroeconomic issues related to the forecasts of the Institute, research in environmental economics in connection with the work on environmental accounting, or problems of economic and statistical methods. Some of these reports are published in final form in this series, whereas others are previous versions of articles that are subsequently published in international scholarly journals under the heading of Reprints. Reports in both of these series can be ordered free of charge. Most publications can also be downloaded directly from the NIER home page.

This report presents a preliminary analysis to determine the effect that setback levees would have along a specified reach of the Sacramento River. This was done using a three-scenario strategy such that recommendations could arise from the analysis of several setback width options. The project reach ranges from river mile 143, just south of Colusa, to river mile 84, near the Sutter and Yolo bypasses. Three setback scenarios were analyzed, and the inter-levee distance was 3000ft, 6000ft, and 9000ft, respectively. Each scenario was analyzed in terms of hydrology, ecology, and economics. The floodplain inundation depth and the change in channel velocity were determined for each scenario at several cross sections using a number of standard flood recurrence intervals. An overview of river meandering processes was given in order to help explain the potential ecological benefits of setback levees. The change in riparian habitat was predicted by comparing the study reach to ecologically similar reaches having a wider interlevee distance. To determine the effect of setback levees on riparian biota, the habitat requirements of indicator bird species were examined. In addition, changes