.................... method puts direct question to individuals to determine how much they might willing to pay for environmental resources.
Contingent valuation method
Environmental goods such as clean air, wetlands or scenic landscapes are rarely traded in markets, so economists use non-market valuation techniques to estimate their worth. These techniques fall into stated-preference methods, which ask people directly, and revealed-preference methods, which infer value from observed behaviour.
The contingent valuation method is the main stated-preference technique. Through surveys it presents respondents with a hypothetical scenario and asks directly how much they would be willing to pay for an environmental improvement, or willing to accept for a loss. The answer is ‘contingent’ on the hypothetical market described.
The travel cost method infers the value of a recreational site from what visitors spend to reach it. Hedonic pricing infers value from price differences in related markets, for example higher house prices near parks. The preventive expenditure method uses what people spend to avoid environmental damage. All three are indirect, revealed-preference approaches and do not ask direct questions.
Contingent valuation method option is correct.
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