Question

1. In 4-5 sentences, please discuss the circumstances in which you might use the contingent valuation method to value non-marketed goods and services and how the method is implemented. (about 200-250 words)

Answer 1

It also includes the bequest value, the satisfaction of preserving the natural environment for future generations. The contingent valuation method is applied through conducting a survey in which people are directly asked how much they would be willing to pay (WTP) for a (change in) specific environmental service.

Non-market value. Definition: Most environmental goods and services, such as clean air and water, and healthy fish and wildlife populations, are not traded in markets. Their economic value -how much people would be willing to pay for them- is not revealed in market prices

The travel-cost method (TCM) is used for calculating economic values of environmental goods. Unlike the contingent valuation method, TCM can only estimate use value of an environmental good or service. It is mainly applied for determining economic values of sites that are used for recreation, such as national parks.