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A consulting firm conducted a random survey of community residents, describing a planned...

Question:

A consulting firm conducted a random survey of community residents, describing a planned riverside park and then asking each respondent the question: "What is the most that you would be willing to pay to have this park built along the river?" Do you think that the monetary benets estimated from the responses are likely to be an overestimate or an underestimate? What is the source of the bias?

Contingent Valuation:

The technique used for the assessment of the resources which are not part of a market, like environmental security, corruption, or pollution is known as contingent valuation.

Answer and Explanation:

To build a park by the river, community members will either not pay any amount or will pay a nominal amount through taxes. Community members will...

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