Creating an interdisciplinary framework for economic valuation: A CVM application to dam removal (Ohio)

Contingent valuation (CV) is a commonly used method for estimating the value of non-market goods. This study attempted to create a more interdisciplinary framework for economic valuation, specifically for estimating the economic benefits of dam removal, and is part of an on-going research program at the Ohio State University on the economics of river restoration (Hitzhusen, 2003). The case study for this dissertation was the Ballville Dam located in Sandusky County, in northwest Ohio. A CV survey and several variants were developed to test several methodological considerations.; The first methodological issue considered was that of incentive compatibility, as it relates to both the dichotomous-choice (DC) and open-ended (OE) elicitation formats used in contingent valuation. Two versions of the CV survey were mailed to Sandusky County residents; one with a DC willingness-to-pay question (WTP) and the other with an OE willingness-to-pay question. Mean WTP for the DC survey was {dollar}50.86 and for the OE survey was {dollar}48.42.; The second part of the study examined the topic of stable versus constructive preferences. A new elicitation format, structured elicitation groups (SEG), was developed and a lab experiment using both a "mail survey" and SEG was run in order to test (1) whether preferences are being constructed during the contingent valuation elicitation process and (2) if that is the case, whether the SEG methodology accounts for such preferences. Results confirmed that the knowledge and awareness levels of SEG participants were significantly different pre-and post-survey and also suggested that SEG participants may have less difficulty with the OE WTP format.; Finally, the study estimated mean WTP as {dollar}50.86 per household in Sandusky County and {dollar}50.91 per household within a 30-mile radius of the dam. The aggregated low-bound estimates of total social benefits based on these estimates were {dollar}863,000 and {dollar}12.3 million respectively, while the estimated cost of removal was {dollar}10.2 million. By improving the techniques used to estimate the benefits of dam removal, the decision-making process with respect to dam removal can be improved and the potential for applying benefit transfer methods to these estimated benefits can also be explained.