Paper Abstract
11. Sameer H. Doshi, Making the Sale on Contingent Valuation, 8/2007; subsequently published in Tulane Environmental Law Journal, Vol. 21, Issue 2, Summer 2008, 295-340.
Abstract: Scholarship and jurisprudence have not seriously considered the question of whether the contingent valuation (CV) technique of monetizing preferences for non-tradeable public goods is consistent with the Daubert standards for scientific evidence. The greatest difficulty is in establishing that CV is testable and has measurable error rates; this problem is consonant with criticisms that economists have leveled at the CV method more generally. Additionally, the “state of the art” of contingent valuation practice has recommended the use of the willingness-to-pay question format for CV, rather than willingness-to-accept. This is misplaced in many cases, particularly in calculating damages in environmental tort cases. The article shows why a willingness-to-accept question format is more desirable on theoretical and practical grounds, and how microeconomic theory may be used to construct an operational test of the fit between CV estimates of willingness-to-accept and actual revealed valuations – thus satisfying the Daubert requirements. Finally, the article discusses how CV evidence should be treated in actual litigation, considering the superiority of the willingness-to-accept format.