9 - Constructing Markets

Summary

As economists took up the task of measuring the demand for environmental services not traded in markets, some chose to substituted survey-based methods known as contingent valuation (CV). Doing so, they could not help but find themselves in the uncomfortable position of self-evidently constructing their observations rather than merely observing them. Apparent anomalies between the constructs and the predictions for economic man led to a fierce debate over the merits of contingent valuation--a debate that hinged on the question of whether economic theory was being applied or tested.