Comments on Chapman et al. (2009): Inadequate Response to Scope while Passing the Scope Test

25 January 2012
By Dr. Kenneth Train

In contingent valuation studies that pass the scope test, the specification of the environmental goods usually does not permit an evaluation of the magnitude of response to scope -- just its direction. A study by Chapman et al. (2009) is the only exception that the author of this paper, NERA Vice President Dr. Kenneth Train, has been able to find. In that study, the magnitude of the response is inadequate under straightforward methods of comparison and cannot be explained by diminishing marginal utility or substitution. Moreover, the survey responses evidence an actual violation of scope, as the estimated willingness to pay is lower for a greater amount of environmental benefits. The implication of these findings is that a CV study can pass the standard scope test while providing implausible results for response to changes in scope.