Limited information, the possibility of rational choice and the contingent valuation method

The contingent valuation method (CVM) for assessing non‐use values has undergone significant criticism recently on various fronts. In this paper, the author analyses the notion that imposing reasonable bounds on the rationality of agents might undermine the basis for any method that attempts to elicit non‐use values on environmental goods from individuals, including CVM. The model of bounded rationality applied is that of Gans (1996). On the basis of that model, it is argued that in complex and unfamiliar situations one would not expect individuals to be able to express their true preferences. Following this line, the author discusses the possibilities for using experts for valuation as well as for providing information for decision making on the preservation of public resources.