Valuing wilderness preservation in Iceland using WTP and WTA : an investigation into data collection modes
This study reports an application of the Contingent Valuation method (CV) to estimate the non-market costs and benefits of hydro scheme developments in an Icelandic wilderness area. A deliberative group-based approach, called Market Stall (MS), is compared to a control group consisting of conventional in-person interviews, in order to investigate flaws of CV, such as poor validity, high non-response rates to the elicitation question and protest responses. A careful exploration into perceived property rights led to the use of willingness to accept (WTA) in compensation for wilderness loss and willingness to pay (WTP) for hydro scheme related benefits. Furthermore, a novel approach to participant behaviour observation and debriefing questions provided insights into the shortcomings of conventional data collection modes, in terms of encouraging motivation, standardised information sets and time pressure, as well as a useful supplement to validity testing. The study suggests that public preferences for the preservation of the wilderness area (status quo) outweigh preferences for non-market hydro scheme benefits. Mean WTA accounts for 780.107 kr (MS estimates) and 86,328 kr (control group estimates), while mean WTP totals 21,326 kr (MS estimates) and 6,377 kr (control estimates). According to this study, MS is better suited for preference construction over complex environmental goods: estimates have more explanatory power, the non-response rate to the elicitation question is lower, and respondents are more engaged. A further finding provides evidence that individuals have differing information requirements, and hence standardised information sets may not be suitable in CV. However, according to the debriefing questions, MS adjusted information to individual needs better than interviews. Although previous research has avoided using WTA due to high mental demands, protesting and strategic bidding, the questionnaire design used in this study resulted in both MS and interview respondents reporting valid WTA bids.