Inadequate Standards in the Valuation of Public Goods and Ecosystem Services: Why Economists, Environmental Scientists and Policymakers Should Care

Abstract

Surveys of stated willingness to pay (WTP) are increasingly used to assess the value of public goods and ecosystem services. However, the currently dominant survey protocols and practices are inadequate. This is most evident from robust findings that the valuations are heavily influenced by the response options or response scales used in the valuation questions. The widely accepted survey guidelines do not require the validity tests and reporting standards that would be needed to make the uncertainty of the results transparent. The increasing use of inadequate survey results by policymakers threatens to undermine trust in environmental valuation, environmental policies, and political institutions. The objective of this paper is to explain the relevant issues and the available alternatives in survey-based valuation to a wider audience of non-specialized economists, environmental scientists, and policymakers.