Is it well applicable to use the Contingent choice experiment to evaluate consumers preference?
What are the application procedure and benefit?
Dear Elegbede,
Let me begin by thanking you for asking this question. Contingent Valuation Method (CV) is a stated preference method that asks a random sample of respondents for their Willingness to pay (WTP) or Willingness to Accept (WTA) Compensation for a clearly defined good. It basically involves the direct elicitation of how much an individual is willing to pay for a given good or service.
Design of CVM study
Before you design a CVM study,there are fundamental questions that you need to ask yourself such as:
1) What change in environmental quality should respondents be asked to value, and
how should this change be described to them?
2) What type of interview format should be used in the survey (i.e. face to face,
telephone, or mail)?
3) What type of questions (elicitation procedure) should be used to elicit
respondents’ valuation of the change in environmental quality?
4) Exactly how should respondents be told that they would have to pay for the
change in environmental quality?
5) How can we increase our confidence that respondents in the contingent valuation survey are actually valuing the specific change in environmental quality describe and not some other environmental quality change, and furthermore, that the values found are correct?
Hypothetical market
Usually, respondents are presented with hypothetical markets. Such hypothetical market must have the following components:
1) The good or service itself
2) The institutional context in which the good/service will be provided
3) The financing of the bid vehicle.
Elicitation
In terms of elicitation, start by explicitly stating the purpose of the CVM in the survey tool. The context should the realistic as possible. You may start by eliciting the respondents attitude to general issues concerning the good followed by the good in question before presenting the hypothetical market and finally eliciting WTP. For more information, find the attached training manual developed by Mburu et al.
I hope this helps a bit.
Regards,
Dennis O. Olila
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