SUBSTITUTION EFFECTS IN CVM VALUES

There is increasing recognition that statistical estimates of the aver age willingness to pay for environmental programs may be biased by the failure of respondents, or of the statistical methodology, to conside r the effect of substitute programs and goods. We design and implement a CVM survey that estimates the impact of substitution effects on the willingness to pay for an environmental program. We find a statistica lly significant impact and suggest that the set of potential substitut es is very large.