UNCERTAIN RECREATION QUALITY AND CONTINGENCY CONTRACTING: IMPLICATIONS FOR WILDLIFE VALUATION AND QUESTIONNAIRES DESIGN (ARIZONA).

Theoretical arguments have been advanced which support the proposition that the expected value of consumer surplus underestimates benefits accruing to the users of natural environments when the recreation quality is uncertain. In particular, an uncertainty premium should be added to the expected value of consumer surplus to fully reflect user benefits, a premium known as option value. The results of this research suggest that the concept of option value is a peripheral concern in the valuation of natural environments. The correctly specified uncertainty premium is derived and a questionnaire methodology is developed to estimate this premium for the case of wildlife resources in Cave Creek, Arizona.

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