Monday, October 23, 2017

Determining Value - Willingness to Pay

In our readings this week for my Environmental Philosophy course, we finally have an author who seems to accept the idea that value requires a valuer. When T. J. Kasperbauer talks about the value of a species continuing to exist or, more importantly, the value of bringing a species back from extinction, he talks about existence value – the interest that a person may have in its existence regardless of its usefulness to him or the pleasure of experiencing it.

The philosophical literature on the value of species tends to focus on intrinsic value, which is typically understood to mean ‘non-instrumental value’, or the value that a species has apart from how it is used or experienced by human beings (McShane, 2007; O’Neill, Holland, & Light, 2008). That species have intrinsic value is typically taken to be a metaphysical thesis: a claim about the nature of the world. However, I will focus on what I take to be the psychological equivalent of attributing intrinsic value to species. This is called existence value.

Existence value is the value people attribute to a species merely for its existence. When studied by psychologists and economists, this is usually understood as the value attributed to a species regardless of how the species might be used (what is called ‘nonuse value’) and regardless of whether people ever have or ever will encounter the species

The existence value of something, then, is the value that something has because somebody, somewhere, wants it to exist. Kasperbauer recognizes that we can want something not only because it is useful, or because it is pleasing to experience. We can want something to exist for its own sake – simply as one of the things we want. Yet, it has this value in virtue of the fact that somebody wants it. If nobody wanted something to exist, then its existence loses (at least this type) of value.

Unfortunately, Kasperbauer goes from here to discuss ways of determining the existence value of things by methods that are dubious. One of these methods are “willingness to pay” surveys. These ask people to report what they are willing to pay for something to continue to exist, and determines the value of its existence from these surveys.

We can raise questions about whether people give an honest answer. Since one will not actually pay for the good, an agent may exaggerate his interests in order to urge those who are doing to the survey to get somebody else (e.g., taxpayers) to pay more.

Setting aside these questions of honesty, there is reason to doubt that even an honest answer is a clear indicator of value. A person's answer may be far from accurate, even if honest, because of how much the person can afford to pay, false beliefs about what is true of the thing being evaluated, and false believes about the consequences of what is evaluating. In addition, there is the questionable relationship between what a person is willing to pay for and what others are obligated to provide.

The Marginal Value of Money

Consider the following case:

After a hurricane, a survivor who had stored some bottled water in case of just such an emergency is approached by two people who want some fresh, clean water. One of them is a wealthy aristocrat who would like to use fresh water to shampoo his dog – rather than the contaminated water in a nearby lake. The other is a poor woman with a sick child. The seller decides to sell the water to the highest bidder. The aristocrat offers $20 for the water. The woman with the sick child does not even have $20 to offer.

We are lead to draw from the fact that the aristocrat paid the higher price and got the bottled water that he valued shampooing his dog more than the mother valued providing clean water for her sick child. Yet, this is nonsense. We cannot infer the values of these two states of affairs to the two agents from their “willingness to pay” when those who are being asked have significantly different amounts of wealth. For some people, $20 is a drop in the bucket. They could drop $20 from their pocket without ever missing it or caring. To others, it is food, clean water, or basic medical care.

The person with the large bank account might be willing to pay $10,000 for the water to use to shampoo his dog. This does not imply that he values shampooing his dog more than the mother values helping her sick child.

The Problem of False Beliefs

Another problem with deriving value from this type of test is that it assumes that all of those who answer this question have perfect knowledge. They must not only know everything that is true about that on which they are being asked to name a price, but they must know all of its relevant relationships to other things.

Kasperbauer was looking at the value of bringing the American Passenger Pigeon back from extinction. In suggesting that this might have some “existence value”, he looked at surveys used to determine the value that people placed on preserving peregrine falcons. These surveys also asked people why they valued this policy as they did.

One of the answers that those who took they survey gave, according to Kasperbauer “all endangered species has a right to existence.” This may well be what the person giving this answer believes. However, whether or not actual real-world value is being realized depends on whether this is true. The metaphysical existence of “rights to existence” is questionable at best, and Kasperbauer at least assumes there is no right. However, if there is no right, then there is no value. Paying for this is like paying for a Picasso forgery while claiming that one’s reason for doing so was so that one could own a genuine Picasso painting.

There is a difference between the value something has given an agent's actual interests, and the value that he thinks it has based on inaccurate or incomplete beliefs.

Who Pays?

I am willing to pay $200 for a new Surface Pro computer. Does this mean that the government has a moral permission to tax other people to provide me with a surface pro? I might have an interest in the survival of the Siberian tiger, or the American bison, or the clown fish. Does this imply that the government has a right to tax other people to secure the continued survival of my favorite species?

There are things that it is reasonable to expect the government to provide for people. While there are disputes, there is a reputable view that holds that this includes security from foreign and domestic threats (national defense and crime prevention) and public goods that might not otherwise be provided such as education or clean air for breathing and water for drinking. There are things that people should pay for themselves out of their own pocket such as tickets to the next Star Wars movie or a new car. And there are things that people should buy for themselves with some help from the government because it also produces a social good, such as collision insurance or renewable energy.

Knowing how much people are willing to pay for something – knowing how much they value it relative to their other values – does not answer the question of whether the state should be the agency responsible for collecting the money and buying that particular good or service.

Moral Weight

Not everything a person may be willing to pay for us something he has a right to. A “willingness to pay” to kill one’s spouse and be free of a marriage while keeping all the property does not make the activity morally legitimate. Nor is a willingness to pay to hunt human prey.

The issues being raised here do not seem to be the types of issues that raise these types of concerns, but they could approach such issues. If one is being asked about a willingness to pay for something that requires native people to give up cultural practices, the values involved might well step outside of the boundaries properly covered by willingness to pay.

In short, willingness to pay is morally limited to that which is morally permissible, and does not apply to what is morally obligatory or prohibited.

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