in a rural area and individual motivation. In the remainder of this section, we focus on the contingent valuation questions and the measurement of motivation.

In the past there has been controversy over how to measure contingent valuations properly.<sup>15</sup> For this reason a committee of experts, appointed by the National Oceanic and Atmospheric Administration (NOAA), following the Exxon Valdes incident, was asked to produce a report on best practice for reliable contingent valuation.<sup>16</sup> The basic conclusions of the NOAA Committee can be summarized as follows: (i) use probability sampling; (ii) avoid mail surveys; (iii) interview people in a place that is related to the question analyzed in the contingent valuation survey; (iv) formulate the question in a specific and realistic context; and (v) use closed-end questions or a variant thereof. In writing our instruments we follow NOAA recommendations as close as possible. First, although the schools are selected by convenience sampling, the students in each school were selected randomly. Second, the questionnaires were administered in the schools, and were filled out in the presence of members of the team. Third, the contingent valuation question was specific and the context was realistic. The salary of reference is the actual salary of health workers when they start their career. In addition since students are close to their graduation, it is very likely that they have already thought about the issue before participating in the survey. Finally, since the sample size is small we use a "payment card" type of question.<sup>17</sup> The question is the following: _Imagine that when you finish your studies you get two jobs as a health worker in the public sector, one in Addis Ababa and one in a rural area 500 km from Addis Ababa. Both contracts are for at least 3 years. Your monthly salary for the job in Addis Ababa would be 700 Birr. Which job would you choose if your monthly salary for the rural job would be $ amount._<sup>_18_</sup> 15 Diamond and Hausman argue that contingent valuation responses are often not consistent with economic theory. However, as pointed out by Hanemann , most of these criticisms are the consequence of an improperly designed survey.

16 The committee was co-chaired by Arrow and Solow and included Leamer, Portney, Radner and Schuman. Portney presents a complete description of the basic recommendations of the NOAA Committee.

17 Contingent valuation questions can take three basic forms: open-ended, closed-ended (also called referendum) and "payment card". The typical open-end question take the form "What is the most you would be willing to pay for ...?". However, experimental evidence has shown that this formulation has a high hypothetical bias . Closed-ended questions ask individuals for their willingness to pay a particular amount of money ( _x_ dollars). In general respondents are presented with a random value and have to answer yes or no. If there is only one question, this is called a single-bound closed-ended question. More sophisticated versions use a follow up question phrased in the same terms but offering a higher (or lower) amount depending on the answer of the individual (this is called double bound) . The "payment card" goes one step further and asks the individual to answer yes or no for a list of different amounts. 18 One Birr is approximately 0.125 USD.

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