NRI Papers
No.39   December 1, 2001
  Identifying the Value of Public Services by the Contingent Valuation Method (CVM)  
Keita KAWAGOE and Nao FUKUNAGA
        Under the financial straits that continue to plague the Japanese economy, it has become important to scientifically identify the value of public services in order to examine the validity of public investment. The Contingent Valuation Method (CVM) is a technique that quantifies the value of services that are unlikely to assume a market format-such as the natural environment and scenery-by using the amount that individual consumers are willing to pay.
    Jointly with Professor Noboru Hidano, Department of Social Engineering, Tokyo Institute of Technology and with the full cooperation of the city of Kawasaki, NRI (Nomura Research Institute, Ltd.) conducted surveys to identify the value of public services by means of CVM in an attempt to quantify the value of software-like public services whose quantification has so far been considered difficult, such as emergency services and consumer consulting. Through the dissemination of this technique and the improvement of its accuracy in the future, the value of public services as quantified by CVM is expected to be utilized in various venues as an internal management index within administrative organizations and as a tool to explain public services to the public.
Contents
I Importance of Quantifying the Value of Public Services
1 Changes in the Environment Surrounding Public Management
2 Increasing Importance of Quantifying the Value of Public Services
3 Techniques to Measure the Benefits of Public Services
4 What is CVM?
II Actual CVM Applications in the City of Kawasaki
1 Flow of CVM Surveys
2 Technical Matters to Consider in CVM Surveys
3 Estimating Public Service Values Under a Model Case
4 Comparison with Actual Public Service Costs
III CVM Utilization Methods and Future Tasks
1 Expected CVM Utilization
2 Future Tasks

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