Validity and reliability of contingent valuation and life satisfaction measures of welfare: An application to the value of national Olympic success

Abstract

The contingent valuation method (CV) has long been used to estimate nonmarket values of environmental and other public goods and amenities. Recently, life satisfaction (LS) measures have been used to estimate nonmarket values. This article empirically compares CV and LS measures of welfare. We elicit willingness‐to‐pay (WTP) estimates for medals won by Canadian athletes and LS measures using Canadian survey data collected before and after the 2010 Winter Olympic Games. These data permit comparative analyses of reliability and validity of CV and LS measures. Both exhibit econometric reliability. CV and LS WTP estimates for medals increase after the Olympics. CV measures of WTP exhibit temporal reliability but LS measures of welfare lack temporal reliability and are significantly greater than CV measures.