Scope (In)sensitivity in Elicited Valuations. Shane Frederick* and Baruch Fischhoff*
The contingent valuation method (CV) is often used to value goods that are not traded directly in markets. Measures of value elicited by this method sometimes appear inadequately sensitive to the quantity, or 'scope', of the good being offered for hypothetical sale. Critics of CV have argued that such insensitivity casts doubts on the method. Advocates of CV have either contended that such results are consistent with economic theory, or have rejected the studies finding such results for failing to familiarize respondents with the goods being evaluated or for deviating from current methodological conventions. This article offers a critical interpretation of these accounts of scope insensitivity, and discusses the unresolved theoretical issues highlighted by scope tests and other tests of economic predictions.*Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA 15213
This research was supported by the National Science Foundation, through the Center for the Integrated Assessment of Human Dimensions of Global Change at Carnegie Mellon University, and by a grant to Baruch Fischhoff from the Environmental Protection Agency.
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