I've never chosen to write to a Senator, or Congressperson...until this morning. Here is my letter (highly paraphrasing John's letter--of course, my letter is wordier) to the Senate Environment and Public Works Committee.
I have recently read Senator Vitter's letter to the National Park Service dismissive of the use of survey methods (the contingent valuation method in particular) in benefit-cost analysis. In dismissing the method, Senator Vitter cites an article by economics Professor Jerry Hausman published in the Journal of Economic Perspectives in 2012. In choosing to selectively use Professor Hausman's critique of the contingent valuation method, Senator Vitter fails to mention that Professor Hausman's critique is one of three articles in a symposium in that issue of the journal, of which the other two articles provide much more positive assessments of the method.
The symposium in the Journal of Economic Perspectives from which Professor Hausman's critique was cherry-picked by Senator Vitter was commissioned as a twenty-year retrospective on the development of the contingent valuation method. In 1992, in the aftermath of the Exxon-Valdez oil spill, the National Oceanic and Atmospheric Administration commissioned a blue-ribbon panel of economists, including two Nobel prize winning economists, to assess the potential of the contingent valuation method to provide meaningful values for environmental goods and services. Beyond being generally supportive of the method, the NOAA panel outlined a set of best practices for the method to address many of the concerns Professor Hausman raised at the time and has raised again twenty years later.
In a published 2012 'Comprehensive Bibliography and History of the Contingent Valuation Method,' Professor Richard Carson of UC San Diego documents over 7500 academic papers and applied case studies from over 130 countries that use or discuss the contingent valuation, the vast majority of which have been published in the last 20 years. Professor Hausman's critique ignores most of this literature.
In a recent paper, published in the journal Applied Economics Policy and Perspectives (2013), Professors John Whitehead, Matt Interis, Dan Petrolia and myself conclude, "Hausman “selectively” reviewed the contingent valuation method (CVM) literature in 2012 and failed to find progress in the method during the 18 years since Diamond and Hausman argued that unquantified benefits and costs are preferred to those quantified by CVM. In this manuscript, we provide counter-arguments to Hausman's claims, not with the intent to convince the reader that the debate over CVM is settled in favor of the method, but rather to argue that the intellectual debate over CVM is ongoing, that dismissing CVM is unwarranted, and that plenty of work remains to be done for the truly curious researcher." I would be glad to provide a copy of this paper to any truly curious elected officials.
The selective use of a single publication from a vast peer-reviewed literature to defend a stance critical of the use of a method flies in the face of responsible use of academic research and will ultimately lead to bad public policy.
Sincerely,
Tim Haab
Professor and Chair
Department of Agricultural, Environmental and Development Economics
The Ohio State University
PS: For what its worth, I am a registered Republican.
I also sent a version of my letter to the House Committee on Science, Space and Technology (Subcommittee on Environment) which has jurisdiction over "all matters relating to environmental research..."
