Antoine de Saint-Exupéry pinpointed the fallacy of the willingness-to-pay method when he wrote:
But I refuse to consider the fact that people are satisfied with what they have as a proof that they lack nothing. There is no absolute instinct that makes one demand something as yet unconceived. But if one makes people aware of an inner impulse that exalts them, then they will demand to know what the conditions for it are. (Quoted in The Life of the Creative Spirit, p. 355.)
How can people be made aware of an inner impulse to preserve large areas of wilderness? Then they will be willing to pay for the preservation.
Private colleges used to have (maybe still do) a way of making students aware of their latent inner impulses. The antithesis of the willingness-to-pay method, it is the inescapable shove into compulsory courses they have no interest in, and would willingly pay to avoid. I entered a small private college as a materialist. I left as an inspired transcendentalist. We engineering students had our faces rubbed in classical literature, poetry, and arts. There was no escape route. The one option was to quit and go home. Somewhere in the forced march along the path of most resistance, I discovered a far better way of living for me. The inescapable shove doesn’t exist at public universities. There, students can get out of almost everything, and everything includes the things they can’t conceive of that might be good for them.
* * *
For a brief biography of Antoine de Saint-Exupéry, click here.
Thank you for addressing this subject! I appreciate the opportunity to write a few comments.
Contingent valuation has many weaknesses, but when it is carefully applied the results can provide decision makers with a useful benchmark. Good economists know that any complete survey of costs and benefits must include the value of market goods and services, non-market goods and services whose market value can be estimated, and non-market goods and services whose market value cannot be approximated. To address the final category the economist must be willing to transcend the limits of his or her own discipline. Unfortunately, too many resist doing so.
WTP fails oftentimes not because the tool is of no value but because those who wield the tool do so carelessly, partially because they have too much faith in its power. A kitchen knife is useful, but one would not attempt eye surgery with the instrument even if trained to do eye surgery.
Inappropriate faith in WTP is one more manifestation of society's desire to limit the scope of the solutions that can be applied to any problem, and, in fact, to limit the range of problems that are discerned in the first place.
Too many have embraced a culture defined by consumption, immediate gratification, and selfishness. This culture gives its adherents a dangerous form of tunnel vision. Adherents may become incredibly skilled at dealing with SOME problems, and they may be incredibly skilled at dispensing SOME solutions. Their hubris often expands until they believe that their skills are more comprehensive than they really are. They err greatly when they fail to recognize that the world is wider than they know.
How can we broaden our vision of the problems we face and of solutions we could apply? The process has to begin with humility, a quality that includes understanding that there will always be more to learn. Having a conversation with great minds, either through exposure to literature or through personal interaction, is a necessary component.
Educational programs that do not teach humility have their place, but their focus is always constrained and may even be constraining unless accompanied by education that fosters deep humility.
Let the economists continue to use WTP, but let's help them remember that its only a beginning to complete understanding.
p.s. I am one of those economists!
Posted by: Aaron Kelson | April 12, 2006 at 01:21 PM