Some Empirical Evidence on Embedding Effects in Contingent Valuation of Forest Protection

We test for an embedding effect on a geographically distributed public good and the extent to which improvements in the CVM design reduce the occurrence and magnitude of embedding effects in valuation. Using both open-ended and dichotomous choice CVM for protection of forests in all of southeastern Australia and two smaller portions of that area, we find the occurrence of embedding effects in only one of the two levels. When embedding effects were present, there was a reduction in value much smaller than that found by Kahneman and Knetsch.