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Abstract
The sources of preference uncertainty in contingent valuation (CV) studies have rarely been
investigated from a theoretical standpoint. This paper proposes a holistic theoretical framework
of preference uncertainty that combines microeconomic theory with the theories of cognitive
psychology. Empirical testing of the proposed theoretical model was carried out in Australia in
the context of a national ‘Carbon Pollution Reduction Scheme (CPRS)’ to be introduced in 2010.
Two separate ordered probit models for a certainty score associated with CV ‘Yes’ and ‘No’
responses were estimated. The results of the estimated regression models provide evidence
supporting the hypotheses drawn from the theoretical model.