"Ask a Silly Question...": Contingent Valuation of Natural Resource Damages. (1992). Harvard Law Review, 105, 8, 1981-2000.

This article evaluates contingent valuation as a method of estimating the value lost by natural resource damages, ultimately concluding that the method fails to measure non-use (passive) values. The article begins by summarizing the different use values a natural resources may have including bequest, options, use and non-use (or what we call direct and passive use). A breif history of CVs can be found within the article, notably including the first legal sanction of CVs as a method of estimating damages inflicted upon natural resources in 1986. Despite this, the authors suggest that it should be removed from the list of suitable methods as that it is subject to several forms of bias and comes at great cost to the evaluating administration.

Notable Arguments Against the Contigent Valuation Method:
  • "[T]here is no cost to being wrong, and therefor no incentive to undertake the mental effort to be accurate".
  • There is no evidence that people have established preexisting values for non-market resources.
  • If a respondent is unfamiliar with the resource in question, a CV "may create the nonuse value it purports to measure".
  • CVM results are not consistant across various studies
  • CVs actually are measuring "symbolic" bias, or the respondents willingness to pay for a "good cause"
  • For such little reliability, CVs come at great administrative cost.
  • The upward bias of CV results impose undue costs on the perpetrator of damages.