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The Provision Point Mechanism and Scenario Rejection in Contingent Valuation

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  • Groothuis, Peter A.
  • Whitehead, John C.

Abstract

The provision point mechanism mitigates free-riding behavior in economic experiments. In two contingent valuation method surveys, we implement the provision point design. We ask respondents for their perceptions about the success of the provision point mechanism. We find that respondents who believe that the provision point would not be met are more likely to say no to a contingent valuation dichotomous choice question. The scenario rejection that arises may result in biased willingness-to-pay estimates.

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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 38 (2009)
Issue (Month): 2 (October)
Pages:

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Handle: RePEc:ags:arerjl:55542

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Keywords: provision point mechanism; contingent valuation; willingness to pay; public goods; Environmental Economics and Policy;

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  14. Patricia Champ & Richard Bishop, 2001. "Donation Payment Mechanisms and Contingent Valuation: An Empirical Study of Hypothetical Bias," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(4), pages 383-402, August.
  15. Rondeau, Daniel & D. Schulze, William & Poe, Gregory L., 1999. "Voluntary revelation of the demand for public goods using a provision point mechanism," Journal of Public Economics, Elsevier, vol. 72(3), pages 455-470, June.
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