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Article: Comments on "Contingent Valuation: Not an Appropriate Valuation Tool".(Letters to the editor)(Letter to the editor)
- Article from:
- Appraisal Journal
- Article date:
- June 22, 2006
- Author:
CopyrightCOPYRIGHT 2006 The Appraisal Institute. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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I agree with the argument made in "Contingent Valuation: Not an Appropriate Valuation Tool" by Albert R. Wilson (Winter 2006) on the misuse of contingent valuation to value detrimental conditions in real estate. There are a few points the author touches on that could use some amplification.
First, the argument can be made that willingness to pay (WTP) for X represents the lower-bound value and willingness to accept (WTA) payment to give up X represents the upper-bound value. In real estate markets, the analogy could be the intersection of the bid and offer curves, that is, what a buyer is willing to offer and what a seller is willing to sell for. In the market ...