Option price estimates for water quality improvements: A contingent valuation study for the monongahela river☆

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Abstract

We present the findings from a contingent valuation survey designed to estimate the option price bids for the improved recreation resulting from enhanced water quality in the Pennsylvania portion of the Monongahela River. The findings are based on a survey design that used professional interviewers to conduct personal interviews determined from a representative sample of 393 households. In addition, the research suggests that protest bids and outliers be viewed similarly. Accordingly, a new technique for identifying outlying responses is proposed. The findings suggest that the question format affects the option price estimates and that criteria for determining the final sample of responses can have an important influence on contingent valuation results.

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    ☆

    Two anonymous reviewers contributed constructive comments on an earlier draft of this paper. Matthew McGivney provided research assistance while Hall Ashmore lent editorial guidance. This research was supported by the U.S. Environmental Protection Agency under Contract 68-01-5838. Desvousges also received support from a Research Triangle Institute Professional Development Award. The views expressed in the paper are those of the authors, not their respective institutions.

    ∗

    Present address: Department of Economics and Business, North Carolina State University, Box 8109, Raleigh, NC 27695-8109.

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