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Preference uncertainty in contingent valuation

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  • Akter, Sonia
  • Bennett, Jeff
  • Akhter, Sanzida

Abstract

In this paper, the results of empirical studies that applied two widely used methods - numerical certainty scale (NCS) and polychotmous choice (PC) - for estimating preference uncertainty adjusted willingness to pay (WTP) in contingent valuation (CV), are summarized. For this review, a number of conclusions are reached. First, there is a lack of consensus about which method is more appropriate for measuring preference uncertainty. Second, although preference uncertainty information has been found useful in detecting the incidence of hypothetical bias in CV studies, a consensus about a standard certainty threshold (or treatment mechanism) at which hypothetical behaviour converges to real behaviour is yet to emerge. Third, insufficient empirical evidence exists about the causal relationship between preference uncertainty scores and the theoretically expected explanatory variables. Finally, the preference uncertainty adjusted PC and NCS models fail to provide a consistent and more efficient welfare estimate compared to the conventional dichotomous choice certainty model.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 67 (2008)
Issue (Month): 3 (October)
Pages: 345-351

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Handle: RePEc:eee:ecolec:v:67:y:2008:i:3:p:345-351

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Preference uncertainty Contingent valuation Polychotomous choice Numerical certainty scale;

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Cited by:
  1. Whittington, Dale & Pagiola, Stefano, 2011. "Using contingent valuation in the design of payments for environmental services mechanisms: a review and assessment," MPRA Paper 32730, University Library of Munich, Germany.
  2. Kräussl, Roman & Lucas, André & Siegmann, Arjen, 2010. "Risk aversion under preference uncertainty," CFS Working Paper Series 2010/24, Center for Financial Studies (CFS).
  3. Voltaire, Louinord & Pirrone, Claudio & Bailly, Denis, 2013. "Dealing with preference uncertainty in contingent willingness to pay for a nature protection program: A new approach," Ecological Economics, Elsevier, vol. 88(C), pages 76-85.
  4. Aguilar, Francisco X. & Daniel, Marissa “Jo†& Cai, Zhen, 0. "Family-forest Owners’ Willingness to Harvest Sawlogs and Woody Biomass: The Effect of Price on Social Availability," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association.
  5. Lyssenko, Nikita & Martinez-Espineira, Roberto, 2009. "Respondent uncertainty in contingent valuation: the case of whale conservation in Newfoundland and Labrador," MPRA Paper 21969, University Library of Munich, Germany.
  6. Mimako Kobayashi & Klaus Moeltner & Kimberly Rollins, 2010. "Latent Thresholds Analysis of Choice Data with Multiple Bids and Response Options," Working Papers 10-001, University of Nevada, Reno, Department of Economics;University of Nevada, Reno , Department of Resource Economics.
  7. Roman Kraeussl & Andre Lucas & Arjen Siegmann, 2010. "Risk Aversion under Preference Uncertainty," Tinbergen Institute Discussion Papers 10-117/2/DSF 4, Tinbergen Institute.
  8. Akter, Sonia & Bennett, Jeffrey W., 2009. "A cognitive psychological approach of analyzing preference uncertainty in contingent valuation," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47938, Australian Agricultural and Resource Economics Society.
  9. Blasch, Julia & Farsi, Mehdi, 2012. "Retail demand for voluntary carbon offsets – a choice experiment among Swiss consumers," MPRA Paper 41259, University Library of Munich, Germany.
  10. Lyssenko, Nikita & Martinez-Espineira, Roberto, 2009. "`Been there done that': Disentangling option value effects from user heterogeneity when valuing natural resources with a use component," MPRA Paper 21976, University Library of Munich, Germany, revised 08 Apr 2010.
  11. Akter, Sonia & Brouwer, Roy & Brander, Luke & van Beukering, Pieter, 2009. "Respondent uncertainty in a contingent market for carbon offsets," Ecological Economics, Elsevier, vol. 68(6), pages 1858-1863, April.

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