Essays in environmental economics: Investigating non-use values, the WTA-WTP disparity, and the validity of the contingent valuation method

The purpose of this research is to evaluate the current methodology for valuing non-market goods, especially natural resources. The contingent valuation method (CVM) has been used extensively in recent years to obtain total value estimates of natural resource damages for use, for example, in litigation. Contingent valuation is the most common method used by economists to obtain non-use values. The incorporation of non-use values into damage assessments has become a controversial issue in both the legal and economic professions.;The first purpose of this paper is to establish the existence of non-use values. A laboratory experiment was conducted to discover if preserving a life form is valued by individuals. The commodity chosen for use in the experiment, a common houseplant, embodies many attributes associated with non-use values.;A second matter of interest discussed in this research is the observed disparity between measures of value based on willingness to pay as opposed to willingness to accept. A theory is developed to explain how the disparity may arise when non-use values are present in a commodity. The model is based on standard neoclassical utility theory, but also supports Prospect theory (Kahneman and Tversky, 1979).;Third, the validity of the contingent valuation method when non-use values are present is tested by comparing hypothetical responses obtained using CV methodology to actual laboratory behavior. Finally, the future use of CV methodology to obtain non-use values for inclusion in benefit-cost analysis is discussed.