Contingent Valuation Methodology: An economic assessment or a political measure? An empirical investigation of Sagoff’s hypothesis

Many mainstream neo-classical economists interpret responses to Contingent Valuation (CV) methodologies as being an unbiased estimate of economic and personal preferences regarding an environmental change. Sagoff offers an alternative interpretation, claiming that environmental assessments primarily reflect citizen not personal concerns. The current study assesses Sagoff’s assumptions and the neo-classical assumptions by outlining an economic behavioural model and a citizen behavioural model. These behaviour models then are examined using a probit-based structural equation modelling procedure that is able to investigate a complicated set of relationships between the variables. Of particular interest is whether a measure of the tendency to engage in political action mediates the relationship between independent variables and the tendency to offer a positive Willingness-To-Pay (WTP) bid. The models were investigated using a sample of 385 UK residents who participated in a CV study which requested a one-off payment to a trust fund established specifically for a wetland recreation project. The relationship between environmental ethic and WTP bidding behaviour was fully mediated by the political action measure, which suggests that these participants were primarily motivated by citizen motives. The relationship between education category, residential location and environmental beliefs was partially mediated, suggesting these variables have a political and non-political influence on WTP bidding behaviour. Age category only had a direct influence on WTP bidding behaviour. It is concluded that motives underlying CV responses are complicated, reflecting both citizen and personal motives. The implications for practitioner’s measuring environmental values are discussed.