How can we value an environmental asset that very few have visited or heard of? Lessons learned from applying contingent and inferred valuation in an Australian wetlands case study

Irrigators’ willingness to pay for the adoption of soil moisture monitoring tools in South-Eastern Africa

“…The CLAD model is an estimation approach that uses median values instead of mean values. Estimates based on CLAD are robust to non-homoscedastic error terms (Powell, 1984) and outliers (Gregg & Wheeler, 2018). Given the performance (coefficients) and test statistics (e.g.…”

“…CV, contingent behaviour, choice modelling, conjoint analysis) attempt to estimate the monetary value of non-tradable items by presenting a simulation-based imaginary market with survey questionnaires. Their ability to capture some non-use and indirect values of public resources (Arrow et al, 1993) is the main benefit of these approaches, but their estimates are highly vulnerable to bias (Gregg & Wheeler, 2018;Willis, 2014).…”

“…Although CV is a well-known valuation technique and has been used for decades, it is subject to a growing number of shortcomings (Champ & Bishop, 2001;Mitchell & Carson, 1981). Among others, hypothetical, strategic and instrumental bias have been extensively discussed in the literature (Gregg & Wheeler, 2018;Mitchell & Carson, 1981). Hypothetical bias occurs when the stated WTP in hypothetical markets does not match WTP values in regular markets, which involve practical transactions between market players (Champ & Bishop, 2001).…”

“…Certainty scale, inferred valuation, consequential design and cheap talk are some approaches widely employed to deal with hypothetical bias (Carson & Groves, 2007;Cummings & Taylor, 1999;Gregg & Wheeler, 2018;Li & Mattsson, 1995;Lusk & Norwood, 2009). The certainty scale is a post-preference question used to alleviate potential bias in resource valuation (Li & Mattsson, 1995).…”

“…'Cheap talk' design refers to a pre-survey interaction between the investigator and the respondents with the aim of reducing the bias associated with the constructed imaginary market (Cummings & Taylor, 1999). Median estimation and logarithmic transformation have also been used to reduce hypothetical bias (Gregg & Wheeler, 2018).…”