The Case for Diminishing Marginal Existence Values

Abstract

This study addresses the debate over sensitivity of existence values measured by contingent valuation to scope tests. We reconcile much of the debate within one theoretical model. If marginal WTP for existence goods is diminishing, then a study that tested for sensitivity to scope over a range for which marginal WTP is high would be more likely to detect sensitivity to scope than a study that focused on a range for which marginal WTP is much lower. An empirical model demonstrates this point for existence value of remote wilderness parks. These results have significant implications for future contingent valuation work.