Question

5. Some critics of the contingent valuation method- for example (Diamond and Hausman 1993 or Hausman (2012)- have argued that contingent valuation is hopeless and we would be better off assembling a panel of experts to determine natural resource damage assessments and to evaluate specific projects. What problems, if any, do you see with this suggestion of using experts to determine estimates for nonuse values? (If you are stuck see Haab et al, 2013)

Answer 1

Contingent valuation is a survey based method for the valuation of non-market resources, such as environmental preservation. On the other hand, we can also assess by assembling a panel of experts to determine natural resource damage assessments. Using experts is a good technique but it has got its own shortcomings as explained :

1. It is always difficult to find the experts with required knowledge and expertise to guide.

2. As experts are not aware of the market pulse well being not in direct contact, so the result might be biased which is not there in case of contingent valuation method as the respondents on whom the survey is conducted are in direct touch with the market.

3. In case of experts method, the result might be biased sometimes due to human intervention.