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Allowing for Zeros in Dichotomous-Choice Contingent-Valuation Models

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  • Werner, Megan
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    Abstract

    Dichotomous-choice contingent-valuation data are modeled using a mixture distribution. The standard parametric survival model is modified such that respondents in the lowest willingness-to-pay category may have either zero willingness to pay or a small positive willingness to pay. In comparison to the standard model, the mixture model leads to a dramatic reduction in estimates of mean willingness to pay. Covariates such as income are found to be more significant in determining the positive portion of the distribution of willingness to pay.

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    Bibliographic Info

    Article provided by American Statistical Association in its journal Journal of Business and Economic Statistics.

    Volume (Year): 17 (1999)
    Issue (Month): 4 (October)
    Pages: 479-86

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    Handle: RePEc:bes:jnlbes:v:17:y:1999:i:4:p:479-86

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    Cited by:
    1. Colombo, Sergio & Hanley, Nicholas & Kristrom, Bengt & Watson, Fiona, 2008. "Accounting for Negative, Zero and Positive Willingness to Pay for Landscape Change in a National Park," Stirling Economics Discussion Papers 2008-10, University of Stirling, Division of Economics.
    2. Johannes Diederich & Timo Goeschl, 2014. "Willingness to Pay for Voluntary Climate Action and Its Determinants: Field-Experimental Evidence," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(3), pages 405-429, March.
    3. Madureira, Lívia & Nunes, Luis C. & Borges, José G. & Falcão, André O., 2011. "Assessing forest management strategies using a contingent valuation approach and advanced visualisation techniques: A Portuguese case study," Journal of Forest Economics, Elsevier, vol. 17(4), pages 399-414.
    4. Carson, Richard T & Mitchell, Robert Cameron, 2000. "Public Preferences Towards Environmental Risks: The Case of Trihalomethanes," University of California at San Diego, Economics Working Paper Series qt12t5g549, Department of Economics, UC San Diego.
    5. Carson, Richard T. & Hanemann, W. Michael, 2006. "Contingent Valuation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 17, pages 821-936 Elsevier.
    6. Alok Bohara & Joe Kerkvliet & Robert Berrens, 2001. "Addressing Negative Willingness to Pay in Dichotomous Choice Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 173-195, November.
    7. Pere Riera & Raúl Brey & Guillermo Gándara, 2008. "Bid design for non-parametric contingent valuation with a single bounded dichotomous choice format," Hacienda Pública Española, IEF, vol. 186(3), pages 43-60, October.
    8. Swait, Joffre, 2009. "Choice models based on mixed discrete/continuous PDFs," Transportation Research Part B: Methodological, Elsevier, vol. 43(7), pages 766-783, August.
    9. Liu, Jin-Tan & Tsou, Meng-Wen & Hammitt, James K., 2009. "Willingness to pay for weight-control treatment," Health Policy, Elsevier, vol. 91(2), pages 211-218, July.
    10. David L. Weimer & Aidan R. Vining & Randall K. Thomas, 2009. "Cost-benefit analysis involving addictive goods: contingent valuation to estimate willingness-to-pay for smoking cessation," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 181-202.
    11. Andersson, Henrik & Hammitt, James & Lindberg, Gunnar & Sundström, Kristian, 2011. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," LERNA Working Papers 11.20.354, LERNA, University of Toulouse.
    12. Elisabetta Strazzera & Margarita Genius & Riccardo Scarpa & George Hutchinson, 2003. "The Effect of Protest Votes on the Estimates of WTP for Use Values of Recreational Sites," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(4), pages 461-476, August.
    13. Jean-Claude Thill & Chunhua Wang, 2011. "Understanding Willingness to Support Higher Taxes for Urban Transportation Services: The Case of an American City," ERSA conference papers ersa11p1449, European Regional Science Association.
    14. Arana, Jorge E. & Leon, Carmelo J., 2005. "Flexible mixture distribution modeling of dichotomous choice contingent valuation with heterogenity," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 170-188, July.
    15. Berrens, Robert P. & Bohara, Alok K. & Jenkins-Smith, Hank C. & Silva, Carol L. & Weimer, David L., 2004. "Information and effort in contingent valuation surveys: application to global climate change using national internet samples," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 331-363, March.
    16. Álvarez Díaz, Marcos & González Gómez, Manuel & Saavedra González, Ángeles & De Uña Álvarez, Jacobo, 2010. "On dichotomous choice contingent valuation data analysis: Semiparametric methods and Genetic Programming," Journal of Forest Economics, Elsevier, vol. 16(2), pages 145-156, April.
    17. Laura Nahuelhual-Muñoz & Maria Loureiro & John Loomis, 2004. "Addressing Heterogeneous Preferences Using Parametric Extended Spike Models," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 27(3), pages 297-311, March.
    18. Johannes Reichl & Sylvia Frühwirth-Schnatter, 2012. "A censored random coefficients model for the detection of zero willingness to pay," Quantitative Marketing and Economics, Springer, vol. 10(2), pages 259-281, June.
    19. Glenn Harrison & E. Rutström, 2009. "Expected utility theory and prospect theory: one wedding and a decent funeral," Experimental Economics, Springer, vol. 12(2), pages 133-158, June.

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