Senator Vitter (R-LA) has read Hausman (2012) and the news is not good:
Today, U.S. Sen. David Vitter (R-La.), top Republican on the Environment and Public Works Committee, sent a letter to Jonathan B. Jarvis, Director of the National Park Service (NPS), regarding the NPS's intention to use a controversial survey method in order to assign a monetary value to increased "visibility" at national parks and wilderness areas. Instead of actual scientific data, the results from the public opinion survey would be used in cost-benefit analyses by the U.S. Environmental Protection Agency (EPA) in future rulemaking under the Clean Air Act (CAA), including the regional haze rule.
"This survey is just a ploy that won't benefit park goers – it only benefits the EPA's ability to make more rules," said Vitter. "The survey could ask if people want the sky to be more blue when they go to a park, and how much they would be willing to pay for that. The surveyed person can answer $100, or some arbitrary amount they'd hypothetically be willing to pay, but could not even have any intention of visiting the park. This method doesn't make sense and obviously lacks credibility and scientific value, and it could lead to significantly more control over air rules for the EPA."
The willingness-to-pay survey is based on what people would say they would do in a hypothetical situation, as opposed to what they actually do in practice. According to economists cited in the letter, these types of surveys frequently yield inflated and inaccurate values.
Hausman (2012) is cited in footnote 2 of the letter. Here is what I said in a letter to Sen. Vitter:
Senator Vitter:
I have read your letter to the NPS director about the use of the contingent valuation method and would like to try to make you aware of some other research on the issue. Hausman (2012) was written as part of a three article symposium in the Journal of Economic Perspectives. The other two papers are much more supportive of the ability of the contingent valuation method to accurately measure economic values that the public may hold. In response to Hausman, Tim Haab, Matt Interis, Dan Petrolia and myself wrote a response that pointed out that Hausman (2012) ignores much of the scientific literature concerning the method.
This is our summary: Hausman “selectively” reviewed the contingent valuation method (CVM) literature in 2012 and failed to find progress in the method during the 18 years since Diamond and Hausman argued that unquantified benefits and costs are preferred to those quantified by CVM. In this manuscript, we provide counter-arguments to Hausman's claims, not with the intent to convince the reader that the debate over CVM is settled in favor of the method, but rather to argue that the intellectual debate over CVM is ongoing, that dismissing CVM is unwarranted, and that plenty of work remains to be done for the truly curious researcher."
The paper was published in Applied Economic Perspectives and Policy. I would be happy to send you a copy of this paper if you think it might be helpful.
Sincerely,
John C. Whitehead
Department of Economics
Appalachian State University
You can send your own letter here: http://www.vitter.senate.gov/contact/email-senator-vitter and here http://www.epw.senate.gov/public/index.cfm?FuseAction=ContactUs.ContactForm.
Hat tip: Robert Joshi via the twitter
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