FREC 444 Assignment 1
Non-Market Valuation

1. Pick an academic journal article about contingent valuation (suggested journals: Journal of Environmental Economics and Management or Land Economics ) from the past 15 years.  Write a short summary and review of it:
• What specific valuation procedures do the authors use?
• What are the strengths and weaknesses of this method?
• Explain how the empirical results (if any) support the validity of the method.
2. You have been introduced to conjoint analysis as an extension of conventional contingent valuation.  You have responded to a conjiont survey on preferences for farmland protection under a Purchase of Development Rights program, and you administered the survey to someone else.  Summarize the strengths and weaknesses of the conjoint  method versus conventional (referendum or open-ended) contingent valuation.

 
3. Review the SAS code, focusing on the model specification for the estimated empirical preference model for farmland protection.  How might you improve on this model?  Specify and estimate a revised model, defining new variables in the DATA step as needed.  Write up a brief justification for your modified model, and summarize its estimation results versus those of the original model.

 
4. Now that you are familiar with the basics of non-market valuation of environmental amenities, develop a proposal for your own non-market valuation study, including a draft survey questionnaire that you could use to elicit necessary valuation information from survey respondents.
• Your questionnaire should open with a neutral factual description of the environmental good you will evaluate.
• In your proposal, explain why are non-market methods (as opposed to related-market methods) appropriate for evaluating this amenity.  Justify your specific valuation approach.
• After you get your survey drafted, pre-test it on one or more acquaintances who are not students in this class.  Maybe have them "think out loud" as they do it.  Include a question at the end asking if they perceive any bias in the way your questions are framed.
• Summarize your test respondents' reactions to the draft survey in your proposal.  Did they respond as you expected?  Any perceived biases?  Did the survey elicit usable data from which you could derive an economic valuaiton of the resource you are focusing on?  If not, explain how would you revise the survey so that it generates meaningful valuation data?