Valuing wilderness in Iceland: Estimation of WTA and WTP using the market stall approach to contingent valuation

This study reports an application of the contingent valuation method (CV) to estimate the environmental costs and benefits of hydro-scheme developments in an Icelandic wilderness area. Property rights for wilderness are ambiguous in Icelandic law and society. Preliminary research suggested a general view that there was no right to develop the wilderness hence it was necessary to estimate WTA compensation for people wishing to preserve the wilderness and WTP for those in favour of hydro-scheme development. A new deliberative group-based approach to contingent valuation, called the market stall (MS) approach, is applied to achieve this as it provides members of the public the opportunity to discuss and learn about the environmental change, to consult with family and friends, and to reconsider their WTP or WTA. Mean WTA was 780,107 Kr (Krona), and mean WTP for the scheme was 21,326 Kr.(1) Based on a range of validity tests MS performed well: non-response rate was low, strategic bidding was almost absent, information was found to suit individual needs, and both WTP and WTA could be explained by relevant socio-economic variables.