The effects of embedding questions on contingent valuation estimates with different amounts of information

The measurement of environment values is a difficult question for psychologists and economists. One method of determining such values, Contingent Valuation (CV) Method, asks people to put a dollar value on a specific resource. A number of studies by Kahneman and Knetsch (1992) argue that values produced by the CV method change dramatically depending on how the question is embedded and are thus meaningless. However, the Kahneman and Knetsch survey may not have given enough information to elicit reasonable valuations. The present study asked 1001 residents of Sault Ste Marie to put a value on three different resources. Under conditions of high information, the embedding effect was minimized, while under conditions of low information, CV values fluctuated widely. If, as this study suggests, people are capable of giving potentially reasonable values under conditions of sufficient information, CV method may be a valid method of measuring values which psychologist could use.