This is a from a chapter in a book edited by Bruno Frey and David Iselin titled Economic Ideas You Should Forget:
Contingent Valuation, Willingness to Pay, and Willingness to Accept
Abstract. Contingent valuation (CV) and its two arms, or deadly weapons, willingness to pay (WTP) and willingness to accept (WTA), are survey methods that are supposed to measure the value of nonmarket goods and are mainly used by cultural and environmental economists. WTP roughly consists of asking consumers (or producers) how much they are willing to pay to avoid a negative or to accept a positive outcome; WTA goes for compensation and asks how much an agent would like to be paid to accept a negative outcome or to forego a positive one. The two methods lead to different results, although in theory, they should not, which is not the worst that could happen.
Date: 10 March 2017
Of course, theory doesn't predict WTP = WTA for non-market goods but I shouldn't criticize since I haven't read the chapter.
There is a great list of chapters at the book link but some things are missing. If I was asked to contribute I would add (in no particular order):
- Free markets can fix environmental problems
- Discrete choice experiments don't suffer from hypothetical bias
- The adding up test demonstrates the adequacy/inadequacy of scope effects
- There is no difficulty with the travel cost method
- Cutting taxes increases government revenue
That's enough for now (and citations available upon request). What did I miss?