I participated in the NAAFE special session on "Non-market Valuation in Fisheries and Aquatic Ecosystem Research" [pdf] last week. The session included a moderated discussion of more general issues, but we ran out of time. Here are the discussion questions and the things I wanted to say.
1. Where do you see the greatest need for non-market values associated with fisheries and aquatic ecosystems and why?
One issue that is not fully addressed in fisheries management is the allocation of catch between commercial and recreational sectors. There is a need for nonmarket valuation estimates of recreational catch and a comparison to the value of commercial catch to determine the efficient sector allocation of the optimal yield.
Note that expansion of catch share programs to multiple fishing sectors might achieve the same goal.
Nonmarket valuation could also be used to estimate the passive use value of stressed fish stocks. Where the passive use value exceeds the market and nonmarket values of catch, the fishery should be shut down.
2. In your experience, how has non-market valuation been received by policy analysts and decision makers? Has your research been used in making policy decisions? If it has not been used, what are the primary barriers you see for it being used?
Policy analysts and decision makers give a wink and a nod, but little else, to non-market valuation. For years, fishery management plans in the South Atlantic contained some boilerplate language about recreational fishing values but these numbers were never used in any management decisions (other than, perhaps, justifying maintainence of the status quo allocation to the recreational sector). The barrier to its use may be the same as in any management situation, market values (i.e., impacts) trump nonmarket values (i.e., surplus).
Haab, T., J. Whitehead and T. McConnell. 2000. The economic value of marine recreational fishing in the Southeast United States: 1997 Southeast economic data analysis. Final Report for NMFS Contract No. 40WCNF802079. [link]
3. Do you see value in conducting another expert panel on stated preference methods akin to the NOAA Blue Ribbon Panel on Contingent Valuation (1993) to evaluate stated preference methodologies and establish a new set of best practices or standards for the field?
Yes. Following on Hausman's denouncement of contingent valuation, there is a need for some sort of focused effort by a cross-section of economists that sets out the benefits and costs of the various stated preference methods. There is still a lot of ignorance about the progress that has been made in contingent valuation. Non-non-market valuation economists continue to make suggestions and criticisms that have been dealt with long ago. Also, there is a need to separate the method itself from the estimation of passive use values (they are not synonomous).
Contingent valuation and choice experiments both have their uses but the assertion that choice experiments are somehow "better" is still made. This assertion has its roots in the CVM debate of the 1990s, stated preference researchers happily fled the CVM and have not looked back. Choice experiments have largely been given a pass on three issues that Hausman uses to place a nail in the coffin of CVM: hypothetical bias, scope tests and WTP vs. WTA. There are a few papers, but I know of no choice experiment literature (i.e., enough papers to determine a pattern of results) that amasses evidence to even suggest that choice experiments are immune to these issues.
Carson, Richard T., Jordan J. Louviere, A Common Nomenclature for Stated Preference Elicitation Approaches, Environmental and Resource Economics 49(4):539-559, 2011. [link]
Haab, Timothy C., Matthew G. Interis, Daniel Ryan Petrolia and John C. Whitehead, From Hopeless to Curious? Thoughts on Hausman’s “Dubious to Hopeless” Critique of Contingent Valuation, Working Papers from Department of Economics, Appalachian State University. [link]
Hanley, N., Mourato, S. and Wright, R. E. (2001), Choice Modelling Approaches: A Superior Alternative for Environmental Valuation? Journal of Economic Surveys 15:435–462. [link]
Hausman, Jerry. 2012. "Contingent Valuation: From Dubious to Hopeless." Journal of Economic Perspectives 26(4):43-56. [link]
Lew, Daniel K., Kristy Wallmo, External Tests of Scope and Embedding in Stated Preference Choice Experiments: An Application to Endangered Species Valuation, Environmental and Resource Economics
48(1):1-23, 2011. [link]
Ready, Richard C., Patricia A. Champ, and Jennifer L. Lawton, Using Respondent Uncertainty to Mitigate Hypothetical Bias in a Stated Choice Experiment 86(2):363-381, 2010. [link]