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You read the results of a contingent valuation study reporting an economic value of $500 per person for a program designed to reduce water pollution
You read the results of a contingent valuation study reporting an economic value of $500 per person for a program designed to reduce water pollution by 50% in a local river. The dichotomous choice study asked how much respondents would be willing to accept for a 50% increase in water pollution. Previous estimates of the economic value of the 50% water pollution reduction reported $100 per person. The second study used a willingness to pay approach. Why might this new study report an economic value 5 times that of previous estimates?
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