Cameron, T. A., and J. Quiggin (1994) “Estimation Using Contingent Valuation Data From a Dichotomous Choice With Follow-Up Questionnaire,” Journal of Environmental Economics and Management, 27 (3), 218-234.
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Ryan, M. and J. Ratcliffe (2000). “Some issues in the application of closed-ended willingness to pay studies to valuing health goods: an application to antenatal care in Scotland.” Applied Economics 32(5): 643-651.
Limited resources coupled with unlimited demands means that decisions have to be made concerning the allocation of scarce health care resources. The economic instrument of willingness to pay (WTP) is one instrument that can be used to help this decision-making process. Recommendations from the environmental economics literature suggest that the closed end (CE) WTP approach should be used. This approach is just beginning to be used to value health goods. This paper addresses the sensitivity of the closed-ended WTP approach to three issues: the design of the bid vector; the upper and lower limits of integration; and the method of analysis. These are discussed with reference to a study looking at the value of alternative models of ante-natal care in Scotland. The results are discussed and conclusions made concerning the use of the CE WTP instrument for valuing health goods.
Scarpa, R., S. M. Chilton, et al. (2000). “Valuing the recreational benefits from the creation of nature reserves in Irish forests.” Ecological Economics 33(2): 237-250.
Data from a large-scale contingent valuation study are used to investigate the effects of forest attributes on willingness to pay for forest recreation in Ireland. In particular, the presence of a nature reserve in the forest is found to significantly increase the visitors' willingness to pay. A random utility model is used to estimate the welfare change associated with the creation of nature reserves in all the Irish forests currently without one. The yearly impact on visitors' economic welfare of new nature reserves approaches half a million pounds per annum, exclusive of non-recreational values. (C) 2000 Elsevier Science B.V. All rights reserved.
Slothuus, U., M. L. Larsen, et al. (2000). “Willingness to pay for arthritis symptom alleviation - Comparison of closed-ended questions with and without follow-up.” International Journal of Technology Assessment in Health Care 16(1): 60-72.
Objective: To compare two methods of measuring willingness to pay (WTP): closed-ended questions with and without follow-up. Methods: A measurement experiment based on dichotomous choice contingent valuation survey data is reported. Marginal WTP estimates for alleviation of rheumatoid arthritis symptoms resulting from treatment with a novel anti-rheumatic agent, cA2 (TNF-alpha blockade), were calculated. Monte Carlo simulations were undertaken to evaluate the methods with respect to their statistical power. Results: The estimated marginal WTP values using closed-ended questions with and without followup were DKK 637 (US $91) and DKK 1,268 (US $181), respectively. A Wilcoxon's signed-rank test showed that the difference of DKK 631 was significant. Moreover, including a follow-up question increases the precision of the result. Monte Carlo simulations showed that trade-offs between power (i.e., the probability of a correct rejection of a false null hypothesis), efficiency, and size may exist in the two models. Conclusions: There was a significant difference between the WTP estimates when using closed-ended questions with and without follow-up, When choosing between the models, however, power, efficiency, and size could be used as selection criteria.
Bockstael, N. E. (1999). “Valuing the benefits of microbial food safety risk reduction: Discussion.” American Journal of Agricultural Economics 81(5): 1200-1204.
Van der Pol, M. and J. Cairns (1999). “Individual time preferences for own health: an application of a dichotomous choice question with follow-up.” Applied Economics Letters 6(10): 649-654.
This paper explores the use of the dichotomous choice question with follow-up to examine intertemporal preferences for non- fatal changes in own health. Maximum likelihood estimation by censored logistic regression is used to analyse the data collected from the general public. The results show that the average estimated implied discount rate is equal to 0.073 for the full sample and 0.106 for respondents who have positive implied discount rates in the open-ended questions which were also contained in the questionnaire. The implied discount rates vary from 0.024 to 0.166 depending on the age of the respondent and the period of delay offered (5 or 13 years).
Reaves, D. W., R. A. Kramer, et al. (1999). “Does question format matter? Valuing an endangered species.” Environmental & Resource Economics 14(3): 365-383.
A three-way treatment design is used to compare contingent valuation response formats. Respondents are asked to value an endangered species (the red-cockaded woodpecker) and the restoration of its habitat following a natural disaster. For three question formats (open-ended, payment card, and double- bounded dichotomous choice), differences in survey response rates, item non-response rates, and protest bids are examined. Bootstrap techniques are used to compare means across formats and to explore differences in willingness to pay (WTP) distribution functions. Convergent validity is found in a comparison of mean WTP values, although some differences are apparent in the cumulative distribution functions. Differences across formats are also identified in item non-response rates and proportion of protest bids. Overall, the payment card format exhibits desirable properties relative to the other two formats.
Huhtala, A. (1999) “How much do money, inconvenience and pollution matter? Analysing households' demand for large-scale recycling and incineration,” Journal of Environmental Management, 55 (1), 27-38.
Dwindling landfill space and environmental problems with old landfills have forced municipalities to search for new methods to handle solid wastes. The contingent valuation method is used to study households' choice between two alternative waste disposal services, large-scale recycling and incineration, which differ in convenience and air pollution effects. The present study seeks to evaluate how intense people's preferences are in monetary terms. To capture the benefits of waste management, the willingness-to-pay (WTP) estimates are then included in the comparison of disposal options. The motivation is that if only costs are compared and environmental impacts are neglected in evaluating public provision of waste disposal services choices which are unfavourable from a social point of view may be made. (C) 1999 Academic Press.
Poor, P. J. (1999) “The value of additional central flyway wetlands: The case of Nebraska's Rainwater Basin wetlands,” Journal of Agricultural and Resource Economics, 24 (1), 253-265.
Waterfowl habitat is a biological resource which is neither bought nor sold in the traditional market sense. Nebraska, which is situated near the center of the North American Central Flyway, contains unique wetland habitat. Recognizing this, resource managers working in Nebraska promote regulatory protection of such areas. This study found that Nebraskans positively value their state's Rainwater Basin wetland region in that they are willing to pay to have it maintained and expanded. In addition, this study demonstrates how this value was estimated and illustrates how such a value can assist in policy decisions regarding habitat acquisition programs.
O'Conor, R. M., M. Johannesson, and P. O. Johansson (1999) “Stated preferences, real behaviour and anchoring: Some empirical evidence,” Environmental & Resource Economics, 13 (2), 235-248.
We compare different contingent valuation question formats with each other and with observed behaviour for a non-monetary estimation task, the expected number of kilometers travelled by automobile. Open-ended questions, open-ended follow-up questions, dichotomous choice (DC) questions, and double-bound DC questions are included. The single and double-bound DC questions result in an estimated mean about twice as high as the actual value and the open-ended mean. The DC question overestimation seems to be due to an anchoring effect leading to "yea-saying" behaviour. Our results about the difference between DC questions and open-ended questions is consistent with the pattern observed in contingent valuations studies of the willingness to pay. Our results indicates that DC questions seem to be associated with a general overestimation problem that is present even for simple non-monetary estimation tasks.
Daniere, A. G., and L. M. Takahashi (1999) “Environmental behavior in Bangkok, Thailand: A portrait of attitudes, values, and behavior,” Economic Development and Cultural Change, 47 (3), 525-557.
McLeod, D. M., and O. Bergland (1999) “Willingness-to-pay estimates using the double-bounded dichotomous-choice contingent valuation format: A test for validity and precision in a Bayesian framework,” Land Economics, 75 (1), 115-125.
The Double-Bounded Dichotomous-Choice (DB-DC) Contingent Valuation format is thought to yield more precise welfare estimates. Questions remain about its validity. The initial bid may represent information with which respondents update their willingness to pay. A Bayesian model of respondent decision making is estimated for two data sets. The results indicate updating or shifts in respondent willingness to pay between iterated valuations. Nonparametric resting of the welfare estimates reveals that the model incorporating updating yields different values fram the standard model The expected increases in the precision of the DB-DC welfare estimates are lost when updating occurs. (JEL Q26).
Hammitt, J. K., and J. D. Graham (1999) “Willingness to pay for health protection: Inadequate sensitivity to probability?,” Journal of Risk and Uncertainty, 18 (1), 33-62.
Efficient investments in health protection require valid estimates of the public's willingness to forgo consumption for diminished probabilities of death, injury, and disease. Stated valuations of risk reduction are not valid measures of economic preference if the valuations are insensitive to probability variation. This article reviews the existing literature on CV studies of reductions in health risk and finds that most studies are poorly designed to assess the sensitivity of stated valuations to changes in risk magnitude. Replication of a recent study published in this journal by Johannesson et al. (1997) demonstrates how serious the problem of insensitivity can be, even for a study that reports plausible results. New empirical results are presented from telephone surveys designed to provide internal and external tests of how WTP responds to size of risk reduction. The effect of variations in instrument design on estimated sensitivity to magnitude is examined. Overall, estimated WTP for risk reduction is inadequately sensitive to the difference in probability, that is, the magnitude of the difference in WTP for different reductions in risk is typically smaller than suggested by standard economic theory. Additional research to improve methods for communicating changes in risk is needed, and future studies of stated WTP to reduce risk should include rigorous validity checks.
Cameron, T. A., and J. Quiggin (1998) “Estimation using contingent valuation data from a "dichotomous choice with follow-up" questionnaire: Reply,” Journal of Environmental Economics and Management, 35 (2), 195-199.
Our original article proposed that the two yes-no willingness- to-pay (WTP) responses produced by this survey format should be viewed as a pair of jointly distributed (correlated) discrete random variables. The comparison model-the "conventional" approach to estimation using these types of data-contained a programming error. Correction alters the results from the comparison model, but our original claim-that estimation by conventional methods can produce misleading inferences if ours is the appropriate specification-still stands. This is especially true if negative TNTP is precluded when E[WTP] is calculated. (C) 1998 Academic Press.
Cai, Y. X., I. Deilami, and K. Train (1998) “Customer retention in a competitive power market: Analysis of a 'double-bounded plus follow-ups' questionnaire,” Energy Journal, 19 (2), 191-215.
A model is developed and estimated that forecasts the share of an electric utility's customers who would switch to a competitor under various price discounts and service attributes (reliability, renewable power, energy conservation assistance, and customer service.) The method builds upon previous double- bounded dichotomous choice procedures, extended to account for the multi-attribute nature of electric power service.
Donaldson, C., et al. (1998) “Limited dependent variables in willingness to pay studies: applications in health care,” Applied Economics, 30 (5), 667-677.
The appropriate technique for econometric analysis of WTP (willingness to pay) data is an issue which has not been addressed in many studies of WTP for health and health care. This paper argues that, whether an open-ended question or a payment scale approach is adopted, the way in which WTP is recorded means that limited dependent variable models are more appropriate than standard regression analysis, Data from an open ended question on WTP for maternity care contain a large proportion of zeros and the evidence suggests that a two-part specification performs better than OLS or a standard Tobit model. If the payment scale method is adopted, our argument suggests that grouped data regression is an appropriate econometric technique. In practice, with data from a study in Northern Norway, the results from OLS and grouped data regression are broadly similar.
Haab, T. C. (1998) “Estimation using contingent valuation data from a "dichotomous choice with follow-up" questionnaire: A comment,” Journal of Environmental Economics and Management, 35 (2), 190-194.
Cameron and Quiggin [J. Environ. Econom. Management 27, 218-234 (1994)] provide evidence against the use of the standard interval data model and in favor of the more general bivariate probit model. An apparent miscalculation in the estimation process overstates the poor performance of the interval data model for the application reported by Cameron and Quiggin, when the miscalculation is corrected: the data reported by Cameron and Quiggin provide results consistent with Alberini's [J. Environ. Econom. Management 29, 169-180 (1995)] finding that interval-data models provide robust estimates of mean willingness to pay from dichotomous choice with follow-up contingent valuation questions. (C) 1998 Academic Press.
Bosch, J. L., et al. (1998) “Estimating general-population utilities using one binary-gamble question per respondent,” Medical Decision Making, 18 (4), 381-390.
This study used a single binary-gamble question per health state per respondent to obtain societal preferences for the health states intermittent claudication and major amputation and compare those with Health Utilities Indices obtained from patients, to test the feasibility of this method, and to investigate whether the utility depends on the presentation of a vignette as generic vs disease-specific. A random sample of the general U.S. population (n = 1,003) was randomly divided into ten subgroups. In telephone interviews, subjects answered one binary-gamble question in a standard-gamble format for each of two health states. The risks of death varied across subgroups but not between health states. Mean utility was estimated by the area above the proportional distribution of responses indicating acceptance of the gamble. The method is based on the binary-choice method used in contingent-valuation studies of willingness to pay. The health states were alternatively described by generic and disease-specific vignettes in two subsamples. The results suggest that the binary-gamble question can be used to obtain societal preferences for health states, and that disease-specific descriptions yield lower utilities compared with generic descriptions of health states.
Welsh, M. P., and G. L. Poe (1998) “Elicitation effects in contingent valuation: Comparisons to a multiple bounded discrete choice approach,” Journal of Environmental Economics and Management, 36 (2), 170-185.
This paper develops a multiple bounded discrete choice elicitation technique that allows respondents to express their level of voting certainty for a wide range of referendum thresholds. The paper concludes with the results of an empirical study comparing values obtained from a multiple bounded model with values derived from three standard contingent valuation elicitation formats: dichotomous choice, payment card, and open-ended. The multiple bounded discrete choice format covers the range of values associated with the other three predominantly used elicitation methods. Moreover, alternative parameterizations of the multiple bounded discrete choice model correspond to these standard elicitation techniques. (C) 1998 Academic Press.
Rollins, K., and A. Lyke (1998) “The case for diminishing marginal existence values,” Journal of Environmental Economics and Management, 36 (3), 324-344.
This study addresses the debate over sensitivity of existence values measured by contingent valuation to scope tests. We reconcile much of the debate within one theoretical model. If marginal WTP for existence goods is diminishing, then a study that tested for sensitivity to scope over a range for which marginal WTP is high would be more likely to detect sensitivity to scope than a study that focused on a range for which marginal WTP is much lower. An empirical model demonstrates this point for existence value of remote wilderness parks. These results have significant implications for future contingent valuation work. (C) 1998 Academic Press.
Riddel, M., and J. Loomis (1998) “Joint estimation of multiple CVM scenarios under a double bounded questioning format,” Environmental & Resource Economics, 12 (1), 77-98.
Contingent valuation surveys frequently ask the same respondent for willingness to pay (WTP) for either different programs or different levels of provision of a single program. When multiple scenarios are considered by the respondent, the errors in the estimates of WTP are likely to be correlated across scenarios. Failing to account for correlation may lead to erroneous inferences concerning differences in WTP. This paper presents a technique that can be used to jointly estimate WTP for multiple scenarios proposed within a survey when the double bounded questioning format is used. Monte Carlo simulations are employed to show that estimates derived from the joint model provide lower parameter variances as well as tighter confidence intervals surrounding WTP. The model is used to estimate WTP values for data collected in telephone interviews of California residents concerning WTP for fire reduction programs in Oregon and California. Variance properties of these estimates are shown to be similar to those estimated using simulated data.
Leon, C. J., and F. J. Vazquez-Polo (1998) “A Bayesian approach to double bounded contingent valuation,” Environmental & Resource Economics, 11 (2), 197-215.
In this paper we propose a Bayesian approach to model double bounded contingent valuation data. The double bounded elicitation method is interpreted as a two tier iterated process in which the subject is allowed to have a second thought about his/her valuation for the environmental good. Prior information is modelled from the answers to the first dichotomous choice question. The model is Quasi-Bayesian (Q-B) in that the prior distribution refers to mean willingness to pay while the likelihood function refers to the proportions of a multinomial distribution. This model is applied to empirical data from a contingent valuation survey involving the valuation expressed by European tourists for access to natural areas in the Canary Islands. Results show that point estimate of consumer surplus computed with the Q-B model does not differ substantially from single bounded model estimation. In addition, double bounded seems to be quite robust to the choice of the prior model of willingness to pay responses. Comparison with open ended suggests that the Q-B model might be useful to control for strategic response and starting point biases.
Loomis, J., et al. (1998) “Paired comparison estimates of willingness to accept versus contingent valuation estimates of willingness to pay,” Journal of Economic Behavior & Organization, 35 (4), 501-515.
Estimating empirical measures of an individual's willingness to accept that are consistent with conventional economic theory, has proven difficult. The method of paired comparison offers a promising approach to estimate willingness to accept. This method involves having individuals make binary choices between receiving a particular good or a sum of money. Willingness to accept can be inferred from the ranking of dollar amounts and the good of interest. Using the paired comparison approach, mean (median) willingness to accept for a private good is estimated at $59($52). Contingent valuation estimate of willingness to pay for the same good yields a mean (median) of $28($28). While these estimates are statistically different, the ratio of willingness to accept to willingness to pay is less than in most previous studies and closer to ratios found in actual cash experiments. Published by Elsevier Science B.V.
Kling, C. L. (1997) “The gains from combining travel cost and contingent valuation data to value nonmarket goods,” Land Economics, 73 (3), 428-439.
This paper provides a critical assessment of the improvements in precision and bias to welfare measures from combining contingent valuation and travel cost data. Simulation experiments are performed using a variation of the model first suggested by Cameron (1992a) with a focus an identifying likely lower bounds on these gains. fn addition to examining single- bounded contingent valuation as a component of the combined model, this paper investigates additional gains that may accrue from employing a double-bounded variant of contingent valuation. Sizable gains in both bias and precision are found in the simulation experiments. The results suggest that additional investigation into these models is warranted.
Ryan, M., J. Ratcliffe, and J. Tucker (1997) “Using willingness to pay to value alternative models of antenatal care,” Social Science & Medicine, 44 (3), 371-380.
Recent years have seen the development of different models of antenatal care, especially for low risk women. More specifically, there has been a move for more general practitioner and midwifery involvement in such care. Given the current changes that are taking place in the provision of antenatal care, it is becoming increasingly important to carry out economic evaluations of alternative models of care. This paper applies the economic instrument of willingness to pay to assess the benefits of two alternative forms of antenatal care: general practitioner/midwife routine led care versus obstetrician led care. The results suggest a willingness to pay of pound 2500 for antenatal care, with no significant difference between the types of care provided. It is concluded that before firm policy conclusions can be reached, further studies should be undertaken to address methodological issues around the willingness to pay technique. Copyright (C) 1997 Elsevier Science Ltd.
Loomis, J., and E. Ekstrand (1997) “Economic benefits of critical habitat for the Mexican spotted owl: A scope test using a multiple-bounded contingent valuation survey,” Journal of Agricultural and Resource Economics, 22 (2), 356-366.
A split-sample design is used to test for a difference between mean willingness to pay (WTP) for protecting the Mexican spotted owl versus protecting 62 threatened/endangered species which includes the Mexican spotted owl. The multiple-bounded contingent valuation method is used in a mail survey of U.S. residents. The mean WTP amounts are statistically different at the 0.1 confidence level indicating the multiple-bounded mail survey passes the scope test. The range of estimated benefits of preserving the 4.6 million acres of critical habitat for the Mexican spotted owl substantially outweighs the costs of the recovery effort.
Loomis, J. B., and A. GonzalezCaban (1997) “How certain are visitors of their economic values of river recreation: An evaluation using repeated questioning and revealed preference,” Water Resources Research, 33 (5), 1187-1193.
We test the robustness of visitor dichotomous choice willingness to pay (WTP) for maintaining instream flow by challenging respondent's affirmative answers. This is followed by rephrasing the per trip WTP question into an annual dichotomous choice WTP question and reasking the question. About 5% of visitors revised their ''yes'' answer to ''no.'' Estimated WTP changed from $12.81 per trip to $11.96 per trip. Using the method of convolutions, this is an insignificant difference. To further evaluate the robustness of contingent valuation method estimated WTP, these values are compared to WTP derived from the revealed preference travel cost model of the same visitors. No statistical difference was found.
Alberini, A., B. Kanninen, and R. T. Carson (1997) “Modeling response incentive effects in dichotomous choice contingent valuation data,” Land Economics, 73 (3), 309-324.
This paper introduces model specifications that can be used to explain response incentive effects that might occur with discrete response contingent valuation data when follow-up responses are collected. The models allow for possible random response shocks, structural shifts in willingness to pay between payment questions and heteroskedasticity between and within responses. Three well-known contingent valuation survey datasets that include follow-up payment questions are used to empirically test the models.
Loomis, J. B. (1997) “Panel estimators to combine revealed and stated preference dichotomous choice data,” Journal of Agricultural and Resource Economics, 22 (2), 233-245.
Combining stated and revealed preference data often involves multiple responses from the same individual. Panel estimators are appropriate to jointly model the decision to actually visit at current trip costs, the intention to visit at hypothetically higher trip costs, and the intention to visit at proposed quality levels. To incorporate data on all three choices, the random effects probit model is used to estimate the economic value of changes in instream flow. This model illustrates how the complementarity of revealed and stated preference data allows including of instream flow as a covariate in the model and calculating value under alternative flow regimes.
Carson, R. T., et al. (1997) “Temporal reliability of estimates from contingent valuation,” Land Economics, 73 (2), 151-163.
In 1992 the National Oceanic and Atmospheric Administration (NOAA) convened a panel of prominent social scientists to assess the reliability of natural resource damage estimates derived from contingent valuation (CV). The panel recommended that ''time dependent measurement noise should be reduced by averaging across independently drawn samples taken at different points in time.'' In this paper we examine the temporal reliability of CV estimates. Our findings, using a CV instrument designed to measure willingness to pay for a program to protect prince William Sound, Alaska, from future oil spills, exhibited no significant sensitivity to the timing of the interviews.
Tiller, K. H., P. M. Jakus, and W. M. Park (1997) “Household willingness to pay for dropoff recycling,” Journal of Agricultural and Resource Economics, 22 (2), 310-320.
Increased landfilling costs and state-mandated reductions in municipal solid waste (MSW) disposal have combined to increase interest in recycling as an MSW management option. Most benefit-cost analyses, however, focus solely on urban curbside recycling programs and/or fail to include the benefits which accrue to households from the opportunity to recycle. This study focuses on the economic feasibility of dropoff recycling in rural areas, presenting estimates of household willingness to pay (WTP) for dropoff recycling in a rural/suburban area of Tennessee. Using contingent valuation, the most conservative mean household WTP is near $4.00 per household per month.
Poe, G. L., M. P. Welsh, and P. A. Champ (1997) “Measuring the difference in mean willingness to pay when dichotomous choice contingent valuation responses are not independent,” Land Economics, 73 (2), 255-267.
Dichotomous choice contingent valuation surveys frequently elicit multiple values in a single questionnaire. If individual responses are correlated across scenarios, the standard approach of estimating willingness to pay (WTP) functions independently for each scenario may result in biased estimates of the significance of the difference in mean WTP values. This paper applies an alternative bivariate probit approach that explicitly accounts for correlation across errors in the estimation of WTP and mean WTP. Using data from three separate dichotomous choice contingent valuation studies, this correlation is demonstrated to have an effect on the significance level of mean WTP difference tests.
Bennett, R., and D. Larson (1996) “Contingent valuation of the perceived benefits of farm animal welfare legislation: An exploratory survey,” Journal of Agricultural Economics, 47 (2), 224-235.
There has been increasing policy debate about farm animal welfare and the need for further legislation in the UK, European Union and more recently, the USA. However, there is a need for information on the extent to which citizens would wish to support legislative developments intended to improve the welfare of farm animals. The paper described a survey which explores the application of contingent valuation to animal welfare issues by eliciting people's willingness to pay to support specific farm animal welfare legislation. The findings suggest that contingent valuation may be applied to such animal welfare issues but that studies need to formally address the associated problems of embeddedness, purchase of moral satisfaction and failure of respondents to adequately consider substitute and complementary goods, and their potential effect of overstating willingness to pay.
Herriges, J. A., and J. F. Shogren (1996) “Starting point bias in dichotomous choice valuation with follow-up questioning,” Journal of Environmental Economics and Management, 30 (1), 112-131.
Follow-up questions are frequently used to improve the efficiency of dichotomous choice contingent valuation questionnaires. However, a number of authors (e.g., [12, 16]) have noted a significant difference between the WTP distributions implied by initial and follow-up question responses. This paper investigates starting point bias as one explanation for the phenomenon. We develop a model of starting point bias in the context of dichotomous choice questioning with follow-up, using a Monte Carlo simulation to illustrate the potential bias imparted to WTP estimates. An application is provided based on data from a CV study in northcentral Iowa. (C) 1996 Academic Press, Inc.
Blamey, R., M. Common, and J. Quiggin (1995) “Respondents to contingent valuation surveys: Consumers or citizens?,” Australian Journal of Agricultural Economics, 39 (3), 263-288.
The fundamental assumption of the contingent valuation method (CVM) is that responses to CV questionnaires may be interpreted as expressions of consumer preferences. The consumer preference interpretation has been challenged in recent papers arguing that willingness to pay for wildlife preservation is generated, at least in part, by ethical concerns, rather than by a view that wildlife preservation will yield any benefit to individual respondents. Some further evidence bearing upon these questions is derived from a study of forest management in Australia undertaken by the Resource Assessment Commission (RAC). The evidence supports the interpretation that respondents are acting primarily as citizens.
Alberini, A. (1995) “Efficiency Vs Bias of Willingness-to-Pay Estimates - Bivariate and Interval-Data Models,” Journal of Environmental Economics and Management, 29 (2), 169-180.
Dichotomous choice contingent valuation (CV) surveys with follow-ups attempt to obtain more precise information about the respondents' willingness to pay for environmental quality while preserving the desirable properties of the referendum CV method. This paper compares the associated interval-data and the recently proposed bivariate models of willingness to pay (WTP). Monte Carlo simulations show that the interval-data estimates of mean or median WTP can be surprisingly robust to departures from the true, bivariate model, and that the interval-data model is often superior to the bivariate model in terms of the mean square error of the estimates. Two empirical examples that confirm and disprove this finding, respectively, are reported. (C) 1995 Academic Press, Inc.
Alberini, A. (1995) “Optimal Designs For Discrete-Choice Contingent Valuation Surveys - Single-Bound, Double-Bound, and Bivariate Models,” Journal of Environmental Economics and Management, 28 (3), 287-306.
This paper finds the designs for discrete-choice contingent valuation surveys which maximize the precision of a statistic of interest about the public's willingness to pay (WTP) for a change in the environmental quality, such as median WTP. An optimization problem is set up, in which the efficiency of the estimate of median WTP (or a related concept) is the objective function to optimize with respect to the survey design (i.e., the set of bids offered to the respondents). In deriving the optimal designs, we consider alternative econometric models, such as the basic ''single-bound'' model that uses the responses to the first payment question, the traditional interval-data (or ''double-bound'') model for surveys with a follow-up payment question, and the recently proposed bivariate binary response model. Simulations are carried out to compare the alternative design principles and assess their performances with respect to the statistic of primary interest, median WTP, and other welfare measures, such as mean WTP. Other designs that are constructed ad hoc are also examined. (C) 1995 Academic Press, Inc.
Kanninen, B. J., and M. S. Khawaja (1995) “Measuring Goodness-of-Fit For the Double-Bounded Logit Model,” American Journal of Agricultural Economics, 77 (4), 885-890.
The traditional approaches of measuring goodness of fit are shown to be inappropriate in the case of the double-bounded legit model. An alternate approach called the ''sequential classification procedure'' is presented as a possible alternative to the standard tests. The double-bounded legit model is reviewed along with the standard goodness-of-fit measures. The sequential classification procedure and its features are presented in the context of an empirical example.
Carson, R. T., L. Wilks, and D. Imber (1994) “Valuing the Preservation of Australia Kakadu Conservation Zone,” Oxford Economic Papers-New Series, 46 , 727-749.
The Australian Resource Assessment Commission conducted a large contingent valuation study to estimate the economic benefits of preserving Kakadu Conservation Zone (KCZ) by incorporating it into Kakadu National Park rather than allowing mining in it. Different subsamples were presented, with scenarios representing the environmentalist (major) and mining industry (minor) views of the impacts. Willingness to pay to prevent the major impact scenario was twice as high as for the minor impact scenario. For both scenarios, benefit-cost analysis indicates that preservation should be chosen over mining. A valuation function to predict the willingness to pay responses is estimated.
Horowitz, J. (1994) “Preferences For Pesticide Regulation,” American Journal of Agricultural Economics, 76 (3), 396-406.
I look at consumer preferences for pesticide regulation. The analysis is based on a random telephone survey of households. There is a distinct preference for pesticide regulation over an alternative risk reduction proposal (auto exhaust regulation) when both regulations are hypothesized to cost the same and save the same number of lives. Such preference has a surprisingly broad demographic base. However, when the potential numbers of lives saved are different under the two programs, almost 71% of the subjects preferred the regulation that saved the most lives regardless of the risk source.