Approach And Application Of CVM In Valuing The Public Project

With the adjustment of national economy development strategy, economic evaluation of public projects concerns not only financial rewards but also improved results of social public welfare embodied in fairness and sustainability, thus it is imperative to innovate the methods of public project evaluation.Contingent valuation method is one of the most popular and effective techniques for the estimation of non-use value of public goods especially environmental goods. It can be used to estimate the value of public projects by establishing a hypothetical market, getting the willingness to pay, estimating the average WTP or WTA, and the transfer of the profits. At present, the economic evaluation of public project is mainly dominated by direct market techniques, such as CBA, but simulant market and hypothetical market methods are rarely applied, which makes the estimation of use value combined in the quantitive field. Although the non-use value of public projects is widely accepted theoretically while the economic estimation of value are ignored. The CVM can be used to acquire the willingness to pay for the public projects and services by constructing a hypothetical market, which makes up for the limitations of the traditional methods and a new perspective of economic evaluation of public projects is provided.In this thesis, First of all, based on the elaboration of traditional appraisal theory of public projects, its limations are summarized and the study trend is analyzed, then the feasibility about the application of CVM in valuing public projects is discussed by concerning the characteristics of the public projects. Secondly, the primary theory which includes the nature of CVM,basic theory,the rules of the methods,the economic theory and the research procedure is introduced. Thirdly, CVM is studied in deeper level and some statistical and operational questions about CVM are especially studied and explained, which makes CVM more operable; After that, the thesis puts forward a more suitable model for evaluating public projects based on CVM, and two kinds of methods are compared, then their advantages and limitations are summarized. At last, the thesis analyzes the case of Baoji library by CVM, and further proves that CVM is suitable, and also give suggestions to the application of CVM in the evaluation of public projects in China.