An experiment on the economic value of visibility

This paper reports on the development and application of an iterative bidding technique to examine proposed visibility reductions in the Four Corners Region of the southwest United States. The iterative bidding technique is a method to elicit honest bids for “goods” not priced in formal markets. Four issues associated with direct revelation of preferences for environmental goods are explored: (1) the establishment of linkages between the physical parameters of visibility and representation of the “good” called visibility to individuals for valuation purposes; (2) a systematic test for both observed and induced biases associated with the interative bidding technique; (3) replication of the results of previous experiments; and (4) reporting of empirical divergences between compensating and equivalent surplus measures of consumer surplus.