Environmental Economics: My review of the BP-funded book critical of the contingent valuation method is online

September 27, 2018

My review of the BP-funded book critical of the contingent valuation method is online

Here is a link from 2017 with some background: BP has funded a book critical of the CVM. In that post I boasted that my review would be forthcoming in 2018. That boast was a commitment mechanism. I don't know if it would have worked unless Marit Kragt had not invited me to review the book for the Australian Journal of Agricultural and Resource Economics (thanks for the invitation!). Here is the link: https://doi.org/10.1111/1467-8489.12280.

Here are two other reviews:

Ute Barbara Thiermann. Journal of Environmental Assessment Policy and Management, https://doi.org/10.1142/S1464333217800035
Silvia Ferrini and Kerry R. Turner, Journal of Economics, https://link.springer.com/article/10.1007%2Fs00712-018-0606-4

I knew the second review was out but I refrained from reading it until today. Ferrini and Turner point out a major concern:

In total, the book presents 11 chapters co-authored by 21 researchers. The majority of the authors (16) are established consultants, and with the exception of chapter 6 by McFadden, all chapters are partially funded by BP Exploration & Production Inc., as reported in the book acknowledgement. The book’s strength lies in the clarity and simplicity of the argumentation presented, with many chapters that do not get bogged down in details and technicalities. However, the reader might worry that BP sponsorship influenced the authors’ objectivity in testing SP failures. The authors are professional researchers and experienced consultants and readers might wonder whether researchers’ expectation (or preference) in poor results impact studies lay out [sic?]. Economists can easily spot a potential moral hazard here!

It concludes like this:

The key meritocratic conclusion that this book suggests is that ‘experts’ are the best judge of many environmental damages and the general public is often not capable of expressing a meaningful value. However, SP valuation economists do not seem to have a place in the ‘experts’ set.

The book is open access here: https://www.elgaronline.com/view/9781786434685.xml

Posted by John Whitehead on September 27, 2018 at 09:40 AM in Book Reviews, Contingent valuation, Deepwater Horizon blowout | Permalink

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Here are two other reviews:

Ute Barbara Thiermann. Journal of Environmental Assessment Policy and Management, https://doi.org/10.1142/S1464333217800035
Silvia Ferrini and Kerry R. Turner, Journal of Economics, https://link.springer.com/article/10.1007%2Fs00712-018-0606-4

I knew the second review was out but I refrained from reading it until today. Ferrini and Turner point out a major concern:

In total, the book presents 11 chapters co-authored by 21 researchers. The majority of the authors (16) are established consultants, and with the exception of chapter 6 by McFadden, all chapters are partially funded by BP Exploration & Production Inc., as reported in the book acknowledgement. The book’s strength lies in the clarity and simplicity of the argumentation presented, with many chapters that do not get bogged down in details and technicalities. However, the reader might worry that BP sponsorship influenced the authors’ objectivity in testing SP failures. The authors are professional researchers and experienced consultants and readers might wonder whether researchers’ expectation (or preference) in poor results impact studies lay out [sic?]. Economists can easily spot a potential moral hazard here!

It concludes like this:

The key meritocratic conclusion that this book suggests is that ‘experts’ are the best judge of many environmental damages and the general public is often not capable of expressing a meaningful value. However, SP valuation economists do not seem to have a place in the ‘experts’ set.

The book is open access here: https://www.elgaronline.com/view/9781786434685.xml