The Contingent Valuation of Natural Parks

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The Contingent Valuation of Natural Parks

Assessing the Warmglow Propensity Factor

9781840649451 Edward Elgar Publishing
Paulo A.L.D. Nunes, Global Manager and Coordinator, Ecosystems Economics Unit, United Nations Environment Programme, Kenya
Publication Date: 2002 ISBN: 978 1 84064 945 1 Extent: 288 pp
The contingent valuation technique for measuring the economic value of environmental goods and services has becoming 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.

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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.
Critical Acclaim
‘Paulo Nunes provides a detailed and innovative book outlining a contingent valuation (CV) study investigating warm glow. . . This is a very detailed account of a state-of-the-art application of the CV method. If you are embarking on your first CV study as a PhD student or otherwise, then this excellent book may be invaluable.’
– Neil Powe, Environment and Planning B: Planning and Design

‘Paulo Nunes provides an innovative and insightful study that puts forward a method for detecting and correcting warmglow effects in contingent valuation. While readers are being taken on this hunt for warmglow, they are treated to a thorough explanation of how a CVM instrument is designed, refined, implemented and statistically tested for robustness using parametric and non-parametric approaches. The survey instrument provided in the appendix is an added bonus for those wanting to implement his warmglow detection and correction method. It is simply “unbelievable” how much information is packed into this volume. It is a good read and contains sections that will be useful for those designing their first CVM survey, as well as veterans interested in trying out the author’s method for detecting and correcting for warmglow.’
– John B. Loomis, Colorado State University, US
Contents
Contents: Preface Part I: Economic Valuation, Warmglow and Preference Modelling 1. Values, Valuation Methods and Contingent Valuation: An Overview 2. Evaluating CV Measurement Validity: Separating the Light from the Heat 3. Modelling Consumer Preferences Part II: Survey Design and Implementation 4. Preliminary Design Research 5. Structure of the Final Survey Instrument 6. Survey Execution Part III: Analysis of the Survey Results 7. Descriptive Analysis of the Survey Responses 8. Non-parametric Testing Procedures of the Stated WTP Responses 9. A Univariate Estimation of the Stated WTP Responses 10. Operationalization of Consumer Motivations 11. The Valuation Function 12. Conclusions Part IV: Appendices and Bibliographic A. Derivation of Comparative Static Results B. Comprehensive Index C. The Survey Instrument: Questionnaire and Visual Aid D. Public Opinion with Respect to Government Policy Issues E. Information Context: Multivariate Regression Analysis F. Factor Analysis G. Warmglow Payment Vehicle Cross Effect: Estimation Results Bibliography Index

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