Non-market economic valuation in developing countries: Role of participant observation method in CVM analysis

Developing countries have high proportion of black money and related corruption in the society in comparison to the developed ones. This aspect has to be kept in mind while conducting contingent valuation method (CVM) questionnaire survey (in-person) at the site whose economic valuation is being done. Participant observation method (POM) and unstructured interview schedule (UIS) are the two means, which must be used in addition to structured interview schedule during CVM studies in developing countries to arrive at a reasonable non-market economic valuation figure of an environmental amenity. It has been observed that researchers generally ignore this fact during survey for primary data collection among respondents who are quite well off, educated and belong to countries of huge parallel economy. However in the present study, we have utilized these two means during primary data collection for a CVM study and reached the conclusion that CVM has to be used with caution even among educated masses in the developing countries.