Valuation of Rural Environmental Improvements using Contingent Valuation Methodology: a Case Study of the Marston Vale Community Forest Project

Abstract

This study derives a valuation for Marston Vale Community Forest using contingent valuation methodology and examines the validity of the result. Marston Vale Community Forest in Bedfordshire is part of an initiative launched in July 1989 by the Countryside Commission and the Forestry Commission to create 12 new "Community Forests" close to some of the major conurbations in England and Wales. These forests will offer the potential of much closer and more regular contact with the natural world to people with largely urban lifestyles. Contingent valuation methodology is a technique that aims to place a value on non-marketable goods such as environmental quality through personal interview or postal questionnaires designed to derive expressions of a willingness to pay from individuals. One hundred personal interview questionnaires conducted between 4 km and 6 km from the designated boundary of the Community Forest are analysed. A mean individual willingness to pay £6·00 per year is extrapolated to the population living within 6 km of the Community Forest. A total annual willingness to pay of £768 000 is derived, giving a net present value over a 50-year planning period of £10·6 m. This total represents between £1656 and £2208 per hectare of the area to be planted with trees. Individual expressions of willingness to pay are subjected to statistical tests of construct validity. The results compare well with most British studies but fall well short of those achieved in some American work. Further development of contingent valuation methodology is required in the U.K. and some suggestions are made. In particular, expected levels of use and the definition of the target population need to be subjected to more rigorous tests of validity. However, it is concluded that the technique has the potential to provide valid assessments of the value of future environmental improvements and to enable environmental considerations to be taken into account more effectively in decision making.