FAO’s scientific contributions

At the international level, the multiple roles of agriculture are receiving increasing attention. Namely, agriculture is more than just its primary function, that of production of food, fibre and other commodities; it also produces both positive and negative secondary functions, or externalities. Not only are these secondary functions an issue in developed countries, they are important in developing countries. However, as these secondary functions tend not be to priced in markets, their values are unknown, and hence, not available for benefit-cost analysis of the impact of agricultural policies. The contingent valuation technique (CVM) is a survey technique that is the primary economic tool for estimating the values of nonmarketed goods. While the vast majority of applications of this technique have been formulated with the developed country context in mind, it is possible to apply them in developing countries. This report surveys applications of CVM to date in developing countries, and discusses issues of relevance to successful implementation of this technique in these countries. This report can be used by FAO and its Member countries for guiding the work of practitioners who have a leading or technical contribution role in the design of CVM surveys. Furthermore, this report is meant to orient the work of experienced professionals with a general or technically specialized competence, towards the major steps in identification of the valuation issues, survey design, and empirical methods necessary for CVM to value the nonmarketed goods.