In 1989, Robert Cameron Mitchell and Richard T. Carson published a comprehensive review of the contingent valuation method, a technique used to value public goods through surveys. The book, "Using Surveys to Value Public Goods: The Contingent Valuation Method," is praised for its detailed analysis of the differences between direct and indirect methods of valuing public goods, as well as between data based on observed market behavior and hypothetical markets. The authors provide clear definitions of (quasi) public and (quasi) private goods, club goods, and use versus non-use benefits.
Mitchell and Carson advocate for a property rights approach in valuing public goods that require continuous expenditures. They argue that willingness to pay correctly measures Hicksian compensating variation for both increases and decreases in provision. They recommend a referendum format with open-ended elicitation to reduce hypothetical bias. The open-ended method is preferred over closed-ended methods because it avoids starting point bias, even though it is not incentive-compatible.
The authors criticize the book for not comparing (quasi) private, club, and (quasi) public goods with common property resources and for not clearly distinguishing between (quasi) private and (quasi) public goods in the evidence cited. They also question the relevance of results from (quasi) private or club goods in the context of public goods valuation.
Mitchell and Carson's argument that starting point bias is the main source of systematic errors in contingent valuation is challenged. The authors distinguish between divisible and indivisible public goods but fail to clarify how they differentiate between these concepts. The theoretical discussion of systematic errors is considered incomplete, as it does not integrate cases where public goods are perceived as contingent on aggregate bids.
Despite the popularity of referendum surveys, Mitchell and Carson's recommendation for an open-ended design contrasts with recent recommendations for iterative, closed-ended formats. Their suggestion to measure welfare effects using willingness to pay for avoiding decreases differs from other recommendations that use willingness to accept compensation.
The long-term impact of the book may depend on whether their views on property rights and starting point bias are supported by future theoretical and empirical work. The book is a significant contribution to the literature on contingent valuation methods.In 1989, Robert Cameron Mitchell and Richard T. Carson published a comprehensive review of the contingent valuation method, a technique used to value public goods through surveys. The book, "Using Surveys to Value Public Goods: The Contingent Valuation Method," is praised for its detailed analysis of the differences between direct and indirect methods of valuing public goods, as well as between data based on observed market behavior and hypothetical markets. The authors provide clear definitions of (quasi) public and (quasi) private goods, club goods, and use versus non-use benefits.
Mitchell and Carson advocate for a property rights approach in valuing public goods that require continuous expenditures. They argue that willingness to pay correctly measures Hicksian compensating variation for both increases and decreases in provision. They recommend a referendum format with open-ended elicitation to reduce hypothetical bias. The open-ended method is preferred over closed-ended methods because it avoids starting point bias, even though it is not incentive-compatible.
The authors criticize the book for not comparing (quasi) private, club, and (quasi) public goods with common property resources and for not clearly distinguishing between (quasi) private and (quasi) public goods in the evidence cited. They also question the relevance of results from (quasi) private or club goods in the context of public goods valuation.
Mitchell and Carson's argument that starting point bias is the main source of systematic errors in contingent valuation is challenged. The authors distinguish between divisible and indivisible public goods but fail to clarify how they differentiate between these concepts. The theoretical discussion of systematic errors is considered incomplete, as it does not integrate cases where public goods are perceived as contingent on aggregate bids.
Despite the popularity of referendum surveys, Mitchell and Carson's recommendation for an open-ended design contrasts with recent recommendations for iterative, closed-ended formats. Their suggestion to measure welfare effects using willingness to pay for avoiding decreases differs from other recommendations that use willingness to accept compensation.
The long-term impact of the book may depend on whether their views on property rights and starting point bias are supported by future theoretical and empirical work. The book is a significant contribution to the literature on contingent valuation methods.