Must Contingent Valuation Surveys Cost So Much?

Abstract

In 1989 the ExxonValdezran aground and spilled 11 million gallons of oil in Alaska. Great controversy has surrounded the assessment of monetary damages for this oil spill. The source of this controversy has been the use of hypothetical contingent valuation surveys to assess damages to individual households and the aggregation of these survey values over all households in the United States. The assessment prepared for the state of Alaska is reported to have cost several million dollars to undertake. We show thatconsiderableeconomy can be effected in the elicitation of such survey responses. Our approach is to use a cheaper “convenience sample” to generate a statistical model of behavioral responses to the valuation questions and then to use sample averages of population characteristics to predict the behavior of the population. Thus we use a model of the behavior of students to predict the behavior of all of the adult citizens of the United States. We find that we can obtain essentially the same damage estimates as a more expensive “probability sample” of the entire nation.